CERTIFICATE OF NOTIFICATION
filed by
THE SOUTHERN DEVELOPMENT AND INVESTMENT GROUP, INC.
Pursuant to order of the Securities and Exchange Commission dated January 25,
1995, in the matter of File No. 70-8173.
--------------------------
The Southern Development and Investment Group, Inc. (Southern Development)
pursuant to Rule 24, hereby provides the following information as required by
the above-mentioned order:
(a) Statement of Income
<TABLE>
<CAPTION>
SOUTHERN DEVELOPMENT
INCOME STATEMENT (unaudited)
SIX MONTHS ENDED
JUNE 1995
<S> <C>
REVENUE
Revenue $7,655,228
Interest Income 42,167
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TOTAL SALES 7,697,395
EXPENSES
Salaries and Wages 1,614,274
Rent 102,441
Depreciation/Amortization 74,164
Office Supplies and expenses 500,974
Outside Services Employed 2,607,864
Alabama Power Company 217,409
Georgia Power Company 1,874,171
Gulf Power Company 52,428
Mississippi Power Company 18,059
Southern Company Services 3,012,392
Maintenance 41,186
Miscellaneous General 161,237
Insurance 826
Taxes Other than Income 5,593
---------------
TOTAL EXPENSES 10,283,018
NET INCOME (LOSS) BEFORE TAX (2,585,623)
Benefit for Income Taxes 904,816
NET INCOME (LOSS) AFTER TAXES $(1,680,807)
</TABLE>
<PAGE>
(b) Balance Sheet
<TABLE>
<CAPTION>
SOUTHERN DEVELOPMENT
BALANCE SHEET (unaudited)
June 30, 1995
JUNE 30,
ASSETS 1995
<S> <C>
Cash and temporary investments $ 55,480
Accounts Receivable:
Associated companies 1,783,765
Customers and others, less allowance
for doubtful accounts 5,435,564
Costs and estimated earnings in excess
of billings on contracts 3,294,497
Prepaids and other 22,352
Materials and supplies 98,141
---------------
Total current assets 10,689,799
Investments-Envirotech 1,966,890
Office furniture, fixtures, equipment, and
leasehold improvements 1,225,448
Less accumulated depreciation and amortization (488,188)
Net property and equipment 737,260
Intangible and other assets, net 165,420
TOTAL ASSETS $13,559,369
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable:
Associated companies $ 1,197,151
Other 5,568,106
Billings in excess of costs and estimated
earnings on contracts 1,900,290
Other accrued liabilities 926,388
Total current liabilities 9,591,935
Noncurrent deferred income taxes 161,111
Total liabilities 9,753,046
Common Stock, par value $1; 500 shares authorized
and outstanding 500
Additional paid-in capital 5,486,630
Retained earnings (1,680,807)
Total stockholders' equity 3,806,323
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,559,369
</TABLE>
(c) Cash Flow Statement
<TABLE>
<CAPTION>
SOUTHERN DEVELOPMENT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
SIX MONTHS ENDED
JUNE, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net Loss $(1,680,807)
-----------
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation/amortization 74,164
Changes in operating assets and liabilities:
Accounts Receivable (7,199,093)
Costs and estimated earnings in excess of billings
on contracts (3,294,497)
Deferred income taxes 255,367
Prepaids and other assets (90,290)
Accounts payable and other accrued liabilities 7,597,755
Billings in excess of costs and estimated earnings
on contracts 1,900,290
-----------
Total adjustments (756,304)
------------
Net cash used in operating activities (2,437,111)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Project Investment (1,966,890)
Purchase of property and equipment, net (807,417)
------------
Total cash flows from investing activities (2,774,307)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional capital transfers 2,429,202
Additional capital contributions 280,000
------------
Total cash flows from financing activities 2,709,202
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INCREASE (DECREASE) IN CASH AND TEMPORARY
INVESTMENTS (2,502,216)
CASH AND TEMPORARY INVESTMENTS AT BEGINNING
OF YEAR 2,557,696
CASH AND TEMPORARY INVESTMENTS AT END OF PERIOD $ 55,480
============
</TABLE>
<PAGE>
(a) A narrative of activities undertaken during the previous quarter (second
quarter, 1995) in each of the following areas:
(i) Prototype Energy Management System
Southern Development has continued market research and product
development with respect to evaluation of interactive energy management
technologies and has begun discussions with respect to the acquisition of
communications capacity for the required communications system and has explored
possible pilot projects in suburban Atlanta, and at two locations in Alabama.
(ii) Energy Management and Efficiency Services
Southern Development has continued product development and has engaged
in market research with respect to required energy management and efficiency
services and projects, but has not engaged in any such project on a commercial
basis.
(iii) POWERcall(tm)
Southern Development has continued to work on the development of a
business plan for the commercialization of POWERcall(tm). In the interim, it is
conducting a pilot project in Birmingham, Alabama which provides power
monitoring to approximately 200 Alabama Power Company customers and a combined
power monitoring and home security monitoring to approximately 525 Alabama Power
employees and retirees.
(iv) Research and Development
Southern Development continued to focus research and development on
services which can be offered to improve customer satisfaction with the core
electric utility business, including the following: prototype energy management,
energy management and efficiency services, power monitoring and home security,
home monitoring automation, and energy storage.
(v) Energy and Resource Recovery Facilities
Southern Development evaluated a variety of such projects and with the
exception of a potential energy storage project which is still under
consideration, Southern Development elected not to participate. In addition,
Southern Development elected not to participate in proposed biomass generation
projects under consideration due to a lack of qualified fuel.
(vi) Technical Consulting Services
Southern Development continued to provide the technical consulting
services formerly provided by Southern Electric International, Inc., including
engineering services, transformer testing and repair, environmental testing, and
procurement inventory management and joint procurement services.
(vii) Licensing of Intellectual Property
Southern Development continued to provide support for the Good Cents
program, including activities related to the Good Cents Environmental Home
Program and the Residential Building Energy Program, including technical support
and training with respect to Good Cents programs. Southern Development also
continued Enerlink product development and activities relating to the licensing
of Enerlink and the servicing of such license contracts.
<PAGE>
(b) A project-by-project table, covering both the previous quarter and the time
period that has elapsed since the date of this order, for each of Southern
Development's business activities comparing--
(i) the amount of the Commission's authorization for such business
activity;
(ii) the amount of Southern Development's budget for such business
activity;
(iii) the actual investment expended on such business activity.
<TABLE>
<CAPTION>
COMMISSION'S 1995 2ND QUARTER INVESTMENT
BUSINESS LINES AUTHORIZATION BUDGET INVESTMENT # SINCE INCEPTION#
<S> <C> <C> <C> <C>
Prototype Energy $175 million $7.21 million $.10 million $.10 million
Management System
Energy Management and $40 million $.50 million $.01 million $.01 million
Efficiency Services
POWERcall (tm) $20 million $1.49 million $.02 million $.02 million
Research and Development $20 million $5.46 million $.05 million $.05 million
Activities
Energy and Resource $10 million $0.00 $0.00 $0.00
Recovery Facilities
Technical Consulting $5 million $0.00 $0.00 $0.00
Services
Licensing of $5 million $.74 million $.10 million $.10 million
Intellectual Property
# - Reflects capital contributions to Southern Development by The Southern
Company, and does not include investments made from cash internally generated by
Southern Development.
</TABLE>
<PAGE>
(c) A description of any services received by Southern Development from Southern
Company Services and from each of the Southern Operating Companies. This
description should contain the dollar value of the services by company and the
number and type of personnel used to render the services.
<TABLE>
<CAPTION>
DOLLAR VALUE OF SERVICE NUMBER OF PERSONNEL TYPE OF PERSONNEL
OPERATING COMPANY
<S> <C> <C> <C>
Alabama Power Company 100,962 N/A* Chemists
-Technical Consulting for Instructors
Environmental Matters
Georgia Power Company 1,214,168 52 Skilled Technicians,
-Technical Consulting and Repair Engineers
of Equipment
Gulf Power Company 0 0 Marketing
-Market Research re.
Interactive Energy Management
Mississippi Power Company 5,076 18 Mechanics,
-Repair of Equipment Administrative
Southern Company Services, Inc. 1,579,638 201 ** Engineering,
-Professional & Technical Procurement,
Services including: Finance, Accounting, Marketing,
Market Research, Information Information Resource
Resource, Telecommunications,
Accounting, and Engineering
Services
* N/A - Not available
** These employees recorded a total of 16,059 hours for the quarter which is the equivalent of 31 full
time employees.
</TABLE>
<PAGE>
(d) A description of any services rendered by Southern Development to any
associate company within the Southern System. Southern Development will include
a statement as to whether the services were at cost.
1. Support of Operating Companies Good Cents Program.
2. Technical support and training for Residential Building Energy
Program (RBEP) software package.
3. Services associated with developing, deploying and maintaining
information based products that facilitate the delivery of competitive pricing
options to large accounts. These software products include customer energy use
analysis systems, enhanced energy use analysis products for account executives
to augment their customer service role, billing system systems for billing large
accounts and rate analysis products for use by rate departments for designing,
developing and administering new rates. The services include design, development
of new software solutions as well as adaptation of existing software programs
related to the above applications.
All services were at cost, except that intellectual property licensed to
affiliate companies was for no charge except for the cost of making the property
or a copy thereof available, and except for the cost of making required
modifications.
(e) A description of customer financing provided by or through Southern
Development, including--
(i) the amount of such financing by type of energy conservation and
efficiency equipment; (ii) the accumulative amount of financing
outstanding by customer classification; (iii) bad debt write-off
incurred during the quarter; (iv) disclosure of the material terms and
conditions applying to such financing.
Southern Development has no customer financing.
(f) Amounts and forms of currently effective guarantees of, and similar
provisions and arrangements concerning, performance and undertaking of other
obligations by Southern Development.
None.
(g) Amounts and forms of currently effective indemnifications of, and sureties
on, bonds or other obligations issued on behalf of Southern Development.
None.
(h) Amounts and forms of guarantees of, and similar provisions and arrangements
concerning, performance and undertaking of other obligations by Southern
Development.
None.
(i) Amounts and forms of indemnifications of, and sureties on, bonds or other
obligations issued on behalf of Southern Development.
None.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this certificate to the signed
on its behalf by the undersigned thereunto duly authorized.
Dated August 14, 1995 THE SOUTHERN DEVELOPMENT AND INVESTMENT GROUP, INC.
BY /s/ Tommy Chisholm
Tommy Chisholm
Secretary
