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
SOUTHERN DEVELOPMENT & INVESTMENT GROUP
INCOME STATEMENT
QUARTER-TO-DATE
ENDING
MARCH 1995
REVENUE
Revenue $3,703,965
Interest Income 31,563
----------
TOTAL SALES 3,735,528
EXPENSES
Salaries and Wages 771,902
Rent 49,576
Depreciation/Amortization 34,030
Office Supplies and expenses 242,610
Outside Services Employed 1,208,001
Alabama Power Company 116,447
Georgia Power Company 660,003
Gulf Power Company 52,428
Mississippi Power Company 12,983
Southern Company Services 1,432,754
Maintenance 16,977
Miscellaneous General 64,192
Insurance 600
Taxes Other than Income 2,938
----------
TOTAL EXPENSES 4,665,441
----------
NET INCOME BEFORE TAX (929,913)
Benefit for Income Taxes 325,469
----------
NET INCOME AFTER TAXES $ (604,444)
==========
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(b) Balance Sheet
SOUTHERN DEVELOPMENT & INVESTMENT GROUP
BALANCE SHEET (unaudited)
MARCH 31, 1995
ASSETS MARCH
1995
- ------ -----
CURRENT ASSETS:
Cash and temporary investments $ 1,858,497
Accounts Receivable:
Associated companies 1,427,719
Customers and others, less allowance
for doubtful accounts 3,489,525
Costs and estimated earnings in excess
of billings on contracts 2,816,796
Prepaids and other 39,301
-----------
Total current assets 9,631,838
PROPERTY AND EQUIPMENT:
Office furniture, fixtures, equipment, and
leasehold improvements 1,389,131
Less accumulated depreciation and amortization (450,751)
-----------
Property and equipment, net 938,380
OTHER ASSETS:
Noncurrent deferred income taxes 1,053,851
Intangible and other assets, net 106,169
-----------
Total other assets 1,160,020
-----------
TOTAL ASSETS $11,730,238
===========
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LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable:
Associated companies $ 806,049
Other 2,670,780
Billings in excess of costs and estimated
earnings on contracts 1,837,980
Other accrued liabilities 748,584
-----------
Total current liabilities 6,063,393
OTHER LIABILITIES:
Noncurrent deferred income taxes 1,032,906
-----------
Total other liabilities 1,032,906
STOCKHOLDER'S EQUITY
Common Stock, par value $1; 500 shares
authorized and outstanding 500
Additional paid-in-capital 5,237,883
Retained Earnings (604,444)
-----------
4,633,939
-----------
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $11,730,238
===========
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(c) Cash Flow Statement
SOUTHERN DEVELOPMENT & INVESTMENT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTER ENDED MARCH 31, 1995
1ST QUARTER
1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ($604,444)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation/Amortization 34,030
Changes in operating assets and liabilities:
Accounts Receivable (4,897,008)
Costs and estimated earnings in excess of billings
on contracts (2,816,796)
Deferred income taxes 166,148
Prepaids and other current assets (39,302)
Accounts payable and other accrued liabilities 4,131,145
Billings in excess of costs and estimated earnings on
contracts 1,837,980
----------
Total adjustments (1,583,803)
----------
Net cash used in operating activities (2,188,247)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (971,407)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional Capital Transfers 2,460,455
Additional Capital Contributions 0
----------
INCREASE (DECREASE) IN CASH AND TEMPORARY (699,199)
INVESTMENTS
CASH AND TEMPORARY INVESTMENTS AT BEGINNING
OF YEAR 2,557,696
----------
CASH AND TEMPORARY INVESTMENTS AT END OF QUARTER $1,858,497
==========
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(a) A narrative report of activities undertaken during the previous quarter
(first quarter, 1995) in each of the following areas:
(i) Prototype Energy Management System
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
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)
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 customers and a combined power
monitoring and home security monitoring to approximately 400 Alabama Power
employees and retirees.
(iv) Research and Development
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
Development evaluated a variety of such projects and with the
exception of a potential energy storage project which is still under
consideration, Development elected not to participate. In addition, Development
elected not to participate in proposed biomass generation projects under
consideration due to a lack of qualified fuel.
(vi) Technical Consulting Services
Development continued to provide the technical consulting services
formerly provided by SEI, including engineering services, transformer testing
and repair, environmental testing, and procurement inventory management and
joint procurement services.
(vii) Licensing of Intellectual Property
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. Development also continued
Enerlink product development and activities relating to the licensing of
Enerlink and the servicing of such license contracts.
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(viii) Any other activities not identified
No activity.
(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 Development's
business activities comparing--
(i) the amount of the Commission's authorization for such business
activity;
(ii) the amount of Development's budget for such business activity;
(iii) the actual investment expended on such business activity.
<TABLE>
<CAPTION>
COMMISSION'S 1995 1ST QUARTER SDIG PROJECT
BUSINESS LINES AUTHORIZATION BUDGET INVESTMENT NAME
<S> <C> <C> <C>
Prototype Energy Management System $175 million $7.21 million $0.00 IEM + Telecommunications
Energy Management and Efficiency Serv $40 million $.50 million $0.00 Energy Services
POWERcall (tm) $20 million $1.49 million $0.00 Home Security
Research and Development Activities $20 million $5.46 million $0.00 New Projects + flywheel
Energy and Resource Recovery Faciliti $10 million $0.00 $0.00
Technical Consulting Services $5 million $0.00 $0.00 consulting franchises
Licensing of Intellectual Property $5 million $.74 million $0.00 info systems + enerlink+
good cents
------------ -------------- -----
TOTAL $275 million $15.40 million $0.00
============ ============== =====
</TABLE>
Note: All of the activities of Development during the first quarter of 1995 were
funded from retained earnings, past capital contributions made in prior years
under previous orders, and internally generated funds derived from activities
such as the licensing of intellectual property and the provision of technical
consulting services. No additional investment by Southern Company to fund the
operations of Development was required during the first quarter of 1995.
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(c) A description of any services received by 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 NUMBER OF TYPE OF
OPERATING COMPANY OF SERVICE PERSONNEL PERSONNEL
<S> <C> <C> <C>
Alabama Power Company $116,447 N/A Chemists
- -Tech. Consulting for Environmental Matters Instructor
Georgia Power Company $660,003 N/A Skilled Techs,
- -Technical Consulting and Repair of Equipment Engineers
Gulf Power Company $52,428 1 Marketing
- -Mkt. Res. re. Interactive Energy Mngt.
Mississippi Power Company $12,983 14 Mechanics
- -Repair of Equipment
Southern Company Services $1,432,754 160 Engineering, Procurement
- -Prof. & Tech. Services including: Finance, Accounting, Marketing,
Mkt. Res., Inf. Resource, Telecommunications, Information Resource
Accounting and Engineering Services.
</TABLE>
* N/A - not available
** These employees recorded atotal of 17,563 hours for the quarter
which is the equivalent of 34 fill time employees.
(d) A description of any services rendered by Development to any associate
company within the Southern System. 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.
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(e) A description of customer financing provided by or through 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.
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 Development.
None.
(g) Amounts and forms of currently effective indemnifications of, and sureties
on, bonds or other obligations issued on behalf of Development.
None.
(h) Amounts and forms of guarantees of, and similar provisions and arrangements
concerning, performance and undertaking of other obligations by Development.
None.
(i) Amounts and forms of indemnifications of, and sureties on, bonds or other
obligations issued on behalf of 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 May 15, 1995 THE SOUTHERN DEVELOPMENT AND INVESTMENT GROUP, INC.
By Tommy Chisholm
Tommy Chisholm
Secretary
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