SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3526
A. Full title of the plan:
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
THE SOUTHERN COMPANY
270 Peachtree Street, NW
Atlanta, Georgia 30303
<PAGE>
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
FORM 11-K
DECEMBER 31, 1996
TABLE OF CONTENTS
<S> <C>
Page No.
Exhibit 3
Report of Independent Public Accountants 4
Statement of Net Assets Available for Benefits, With Fund Information--
December 31, 1996 5
Statement of Net Assets Available for Benefits, With Fund Information--
December 31, 1995 7
Statement of Changes in Net Assets Available for Benefits, With Fund Information--
for the year ended December 31, 1996 9
Statement of Changes in Net Assets Available for Benefits, With Fund Information--
for the year ended December 31, 1995 11
Notes to Financial Statements and Schedules 13
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1996 19
Schedule II - Item 27d - Schedule of Reportable Transactions--for the year ended
December 31, 1996 23
Signature 24
Consent of Independent Public Accountants 25
</TABLE>
2
<PAGE>
EXHIBITS
A - Amended and Restated Plan Document for The Southern Company
Employee Savings Plan effective July 3, 1995 and First and Second
Amendments thereto. (Designated in Form 10-K for the year ended
December 31, 1995, File No. 1-3526 as Exhibit 10(a) 63.)
B - The consent of Arthur Andersen LLP is contained herein at page
25.
3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Savings Plan Committee of
The Southern Company Employee Savings Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information of THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
(the "Plan") as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for benefits, with fund information for the
years then ended. These financial statements and the schedules referred to below
are the responsibility of the Savings Plan Committee in its capacity as
administrator of the Plan (the "Administrator"). Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investments purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and the statements of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Andersen Andersen LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
May 30, 1997
4
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page 1 of 2
Fund Information (Note 1)
-----------------------------------------------------------------------
Participant Directed Portion
-----------------------------------------------------------------------
Retirement
Preservation Fully Managed Equity Index Core Fixed Special Value
Total Fund Fund Fund Income Fund Fund
-------------- ------------- ------------- ------------ ----------- -------------
ASSETS:
Cash $ - $ - $ - $ - $ - $ -
-------------- ------------ ------------ ----------- ---------- ----------
Investments, at fair value
(Schedule I and Notes 2 and 3):
Temporary investments 10,115,361 277,437 6,671,270 2,408,217 686,872 -
Treasury securities 14,705,317 - 13,099,220 - 1,606,097 -
U.S. Government Agency securities 3,233,429 - 1,953,740 - 1,279,689
Corporate bonds 42,247,646 - 41,764,326 - 483,320 -
Corporate medium term notes 7,867,880 - 7,867,880 - - -
Common stock--excluding common
stock of The Southern Company 77,382,575 - 77,382,575 - - -
Common stock--The Southern Company 1,502,343,127 - - - - -
Common/collective trusts 230,730,754 106,339,384 - 124,391,370 - -
Registered investment companies 42,834,688 - - - - 18,964,289
Loans due from participants 85,694,959 - - - - -
-------------- ------------ ------------ ------------ ---------- -----------
Total investments 2,017,155,736 106,616,821 148,739,011 126,799,587 4,055,978 18,964,289
-------------- ------------ ------------ ------------ ----------- -----------
Receivables:
Company contributions 1,719,106 - - - - -
Participant contributions 2,910,385 226,833 330,785 419,135 12,577 87,057
Interest and dividends 1,246,663 - 1,246,663 - - -
Receivable for securities sold 3,883,182 161,262 109,654 185,040 11,048 35,214
-------------- ------------ ------------ ------------ ---------- -----------
Total receivables 9,759,336 388,095 1,687,102 604,175 23,625 122,271
-------------- ------------ ------------ ------------ ---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $2,026,915,072 $107,004,916 $150,426,113 $127,403,762 $4,079,603 $19,086,560
============== ============ ============ ============ ========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
5
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Page 2 of 2
<S> <C> <C> <C> <C> <C>
Fund Information (Note 1)
------------------------------------------------------------------------------------
Non-Participant
Participant Directed Portion Directed Portion
----------------------------------------------------------------- -----------------
Global International Participants' The Southern Company Stock
Allocation Fund Equity Fund Loan Fund Fund
--------------- ------------ ------------- -------------------------------
ASSETS:
Cash $ - $ - $ - $ - $ -
----------- ----------- ------------ ------------- -------------
Investments, at fair value (Schedule I
and Notes 2 and 3):
Temporary investments - - - 58,704 12,861
Treasury securities - - - - -
U.S. Government Agency securities - - - - -
Corporate bonds - - - - -
Corporate medium term notes - - - - -
Common stock--excluding common
stock of The Southern Company - - - - -
Common stock--The Southern Company - - - 701,330,711 801,012,416
Common/collective trusts - - - - -
Registered investment companies 19,536,790 4,333,609 - - -
Loans due from participants - - 85,694,959 - -
----------- ----------- ------------ ------------- -------------
Total investments 19,536,790 4,333,609 85,694,959 701,389,415 801,025,277
----------- ----------- ------------ ------------- -------------
Receivables:
Company contributions - - - - 1,719,106
Participant contributions 89,522 23,465 - 1,721,011 -
Interest and dividends - - - - -
Receivable for securities sold 29,082 3,915 - 3,347,967 -
----------- ----------- ------------ ------------- -------------
Total receivables 118,604 27,380 - 5,068,978 1,719,106
----------- ----------- ------------ ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $19,655,394 $4,360,989 $85,694,959 $706,458,393 $802,744,383
=========== ========== =========== ============ ============
The accompanying notes are an integral part of this statement.
</TABLE>
6
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page 1 of 2
Fund Information (Note 1)
---------------------------------------------------------------------
Participant Directed Portion
---------------------------------------------------------------------
Retirement
Preservation Fully Managed Equity Index Core Fixed Special Value
Total Fund Fund Fund Income Fund Fund
-------------- ------------- ------------- ------------- ----------- -----------
ASSETS:
Cash $ 487,655 $ 24,767 $ 31,765 $ 20,408 $ 381 $ -
-------------- ------------- ------------ ----------- ----------- --------
Investments, at fair value
(Schedule I and Notes 2 and 3):
Temporary investments 3,714,290 182,521 234,408 150,398 306,100 -
Treasury securities 22,259,990 - 21,324,149 - 935,841 -
U. S. Government Agency securities 14,036,000 - 14,036,000 - - -
Corporate bonds 42,847,517 - 42,447,865 - 399,652 -
Common stock--excluding common
stock of The Southern Company 60,123,400 - 60,123,400 - - -
Common stock--The Southern Company 1,674,952,587 - - - - -
Common/collective trusts 197,436,229 108,267,348 - 89,168,881 - -
Registered investment companies 12,206,266 - - - - 5,276,559
Loans due from participants 86,855,919 - - - - -
-------------- ------------- ------------ ----------- ---------- ----------
Total investments 2,114,432,198 108,449,869 138,165,822 89,319,279 1,641,593 5,276,559
-------------- ------------- ------------ ----------- ----------- ----------
Receivables:
Company contributions 1,778,109 - - - - -
Participant contributions 2,968,214 258,088 371,656 370,387 9,474 31,376
Interest and dividends 1,143,875 - 1,117,600 - 26,275 -
Receivable for securities sold 2,073,337 222,818 54,063 69,702 - -
-------------- ------------- ------------ ----------- ----------- ----------
Total receivables 7,963,535 480,906 1,543,319 440,089 35,749 31,376
-------------- ------------- ------------ ----------- ----------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $2,122,883,388 $108,955,542 $139,740,906 $89,779,776 $1,677,723 $5,307,935
============== ============ ============ =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
7
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Page 2 of 2
Fund Information (Note 1)
--------------------------------------------------------------------------------
Non-Participant
Participant Directed Portion Directed Portion
------------------------------------------------------------ -----------------
Global International Participants' The Southern Company Stock
Allocation Fund Equity Fund Loan Fund Fund
--------------- ------------- ------------- -----------------------------
ASSETS:
Cash $ - $ - $ - $ 205,046 $ 205,288
----------- ----------- ------------ ------------- -------------
Investments, at fair value (Schedule I and
Notes 2 and 3):
Temporary investments - - - 1,328,004 1,512,859
Treasury securities - - - - -
U. S. Government Agency securities - - - - -
Corporate bonds - - - - -
Common stock--excluding common
stock of The Southern Company - - - - -
Common stock--The Southern Company - - - 775,349,606 899,602,981
Common/collective trusts - - - - -
Registered investment companies 5,217,404 1,712,303 - - -
Loans due from participants - - 86,855,919 - -
----------- ----------- ------------ ------------- -------------
Total investments 5,217,404 1,712,303 86,855,919 776,677,610 901,115,840
----------- ----------- ------------ ------------- -------------
Receivables:
Company contributions - - - - 1,778,109
Participant contributions 28,319 8,749 - 1,890,165 -
Interest and dividends - - - - -
Receivable for securities sold - - - 1,726,754 -
----------- ----------- ------------ ------------- -------------
Total receivables 28,319 8,749 - 3,616,919 1,778,109
----------- ----------- ------------ ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $5,245,723 $1,721,052 $86,855,919 $780,499,575 $903,099,237
========== ========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
8
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page 1 of 2
Fund Information (Note 1)
----------------------------------------------------------------------------
Participant Directed Portion
----------------------------------------------------------------------------
Retirement
Preservation Fully Managed Equity Index Core Fixed Special
Total Fund Fund Fund Income Fund Value Fund
--------- ------------ --------------- ------------ ----------- ----------
INVESTMENT INCOME:
Interest and dividends $105,260,838 $ 7,085,768 $ 291,406 $ 234,951 $ 4,468 $2,632,231
Net appreciation (depreciation) in
fair value of investments (Note 3) (116,244,094) - 18,576,678 22,053,603 88,311 22,976
-------------- ------------ ------------ ------------- --------- -----------
Net investment income (10,983,256) 7,085,768 18,868,084 22,288,554 92,779 2,655,207
CONTRIBUTIONS (Note 4):
Participants' 71,430,176 5,747,851 8,570,923 9,653,318 289,135 1,505,934
Company 42,936,464 - - - - -
DISTRIBUTIONS TO PARTICIPANTS (199,351,700) (17,762,715) (8,747,135) (5,254,057) 329,533 (451,513)
NEW LOANS ISSUED - (2,690,770) (3,248,513) (2,359,668) (49,814) (292,552)
LOAN PRINCIPAL PAYMENTS - 2,142,700 3,188,427 3,285,699 73,765 398,488
NET INTERFUND TRANSFERS - 3,526,540 (7,946,579) 10,010,140 1,666,482 9,963,061
-------------- ------------ ------------ ----------- --------- -----------
CHANGE IN NET ASSETS AVAILABLE
FOR BENEFITS DURING YEAR (95,968,316) (1,950,626) 10,685,207 37,623,986 2,401,880 13,778,625
NET ASSETS AVAILABLE FOR
BENEFITS AT DECEMBER 31, 1995 2,122,883,388 108,955,542 139,740,906 89,779,776 1,677,723 5,307,935
-------------- ------------ ------------ ------------- --------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS AT DECEMBER 31, 1996 $2,026,915,072 $107,004,916 $150,426,113 $ 127,403,762 $4,079,603 $19,086,560
============== ============ ============ ============= ========== ===========
</TABLE>
9
The accompanying notes are an integral part of this statement.
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page 2 of 2
Fund Information (Note 1)
-----------------------------------------------------------------------------------------
Non-Participant
Participant Directed Portion Directed Portion
----------------------------------------------------------------------- ----------------
Global Allocation International Participants' The Southern Company
Fund Equity Fund Loan Fund Stock Fund
----------------- ------------ -------------- --------------------
INVESTMENT INCOME:
Interest and dividends $ 1,725,447 $ 209,558 $ 6,092,198 $43,200,739 $ 43,784,072
Net appreciation (depreciation)
in fair value of investments (Note 3) 152,486 (29,812) - (84,347,604) (72,760,732)
----------- ---------- ----------- ------------ ------------
Net investment income 1,877,933 179,746 6,092,198 (41,146,865) (28,976,660)
CONTRIBUTIONS (Note 4):
Participants' 1,513,525 471,863 - 43,677,627 -
Company - - - - 42,936,464
DISTRIBUTIONS TO PARTICIPANTS (574,988) (25,913) (2,825,140) (47,101,754) (116,938,018)
NEW LOANS ISSUED (292,433) (100,043) 34,751,106 (25,717,313) -
LOAN PRINCIPAL PAYMENTS 452,153 144,379 (33,072,657) 23,387,046 -
NET INTERFUND TRANSFERS 11,433,481 1,969,905 (6,106,467) (27,139,923) 2,623,360
----------- ---------- ----------- ------------ ------------
CHANGE IN NET ASSETS AVAILABLE
FOR BENEFITS DURING YEAR 14,409,671 2,639,937 (1,160,960) (74,041,182) (100,354,854)
NET ASSETS AVAILABLE FOR
BENEFITS AT DECEMBER 31, 1995 5,245,723 1,721,052 86,855,919 780,499,575 903,099,237
----------- ---------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS AT DECEMBER 31, 1996 $19,655,394 $4,360,989 $85,694,959 $706,458,393 $802,744,383
=========== ========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
10
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Page 1 of 2
Fund Information (Note 1)
----------------------------------------------------------------------------------------
Participant Directed Portion
----------------------------------------------------------------------------------------
Retirement
Fixed Income S&P 500 Index Preservation Fully Managed Equity Index
Total Fund Equity Fund Fund Fund Fund Fund
------------ ------------- ----------- --------------- ----------- ------------- ----------
INVESTMENT INCOME:
Interest and
dividends $ 95,448,680 $ 3,081,391 $ 958,642 $ 161,018 $ 3,285,268 $ 45,741 $ 43,575
Net appreciation
in fair value
of investments
(Note 3) 363,409,909 27,780 16,884,915 11,099,259 - 12,809,460 10,600,954
------------ -------------- -------------- -------------- ------------ ------------ ------------
Net investment
income 458,858,589 3,109,171 17,843,557 11,260,277 3,285,268 12,855,201 10,644,529
CONTRIBUTIONS
(Note 4):
Participants' 74,617,433 3,331,270 4,639,393 3,891,748 3,536,517 5,162,698 4,685,949
Company 45,004,423 - - - - - -
DISTRIBUTIONS TO
PARTICIPANTS (106,405,605) (5,639,596) (4,859,229) (2,066,425) (4,226,528) (2,094,987) (1,688,906)
NEW LOANS ISSUED - (1,191,759) (1,573,138) (1,068,899) (1,590,916) (1,874,875) (1,152,809)
LOAN PRINCIPAL
PAYMENTS - 1,005,855 1,291,985 1,086,338 955,267 1,427,474 1,172,144
NET INTERFUND
TRANSFERS - (101,668,358) (127,840,953) (68,224,330) 106,995,934 124,265,395 76,118,869
-------------- ------------- -------------- ------------- ------------- ------------- ------------
CHANGE IN NET
ASSETS AVAILABLE
FOR BENEFITS
DURING YEAR 472,074,840 (101,053,417) (110,498,385) (55,121,291) 108,955,542 139,740,906 89,779,776
-
NET ASSETS
AVAILABLE
FOR BENEFITS
AT
DECEMBER 31, 1994 1,650,808,548 101,053,417 110,498,385 55,121,291 - - -
------------- ------------- -------------- ------------- ------------- ------------ -------------
NET ASSETS
AVAILABLE
FOR BENEFITS
AT
DECEMBER 31, 1995 $2,122,883,388 $ - $ - $ - $108,955,542 $139,740,906 $ 89,779,776
============== ============= ============== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
11
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Page 2 of 2
Fund Information (Note 1)
--------------------------------------------------------------------------------------------------------
Non-Participant
Participant Directed Portion Directed Portion
------------------------------------------------------------------------------------- ----------------
Core Fixed Special Global Allocation International Participants' The Southern Company
Income Fund Value Fund Fund Equity Fund Loan Fund Stock Fund
----------- ---------- ----------------- ----------- --------- --------------------
INVESTMENT INCOME:
Interest and
dividends $ 43 $ 85,504 $ 323,719 $ - $ 5,832,640 $ 38,506,594 $ 43,124,545
Net appreciation
(depreciation)
in fair value
of
investments
(Note 3) 53,862 88,755 (99,269) 43,445 - 138,245,963 173,654,785
--------- --------- --------- ----------- ------------ ------------- -----------
Net investment income 53,905 174,259 224,450 43,445 5,832,640 176,752,557 216,779,330
CONTRIBUTIONS (Note 4):
Participants' 62,846 181,885 176,878 60,812 - 48,887,437 -
Company - - - - - - 45,004,423
DISTRIBUTIONS TO
PARTICIPANTS (4,486) (7,799) (977) (49) (339,101) (35,383,111) (50,094,411)
NEW LOANS ISSUED (6,375) (30,665) (41,822) (6,480) 35,836,262 (24,750,061) (2,548,463)
LOAN PRINCIPAL PAYMENTS 15,490 52,218 52,181 20,887 (26,732,870) 16,642,634 3,010,397
NET INTERFUND TRANSFERS 1,556,343 4,938,037 4,835,013 1,602,437 (5,832,639) (9,182,364) (7,563,384)
--------- --------- --------- ----------- ---------- -------------- -------------
CHANGE IN NET ASSETS
AVAILABLE
FOR BENEFITS
DURING YEAR 1,677,723 5,307,935 5,245,723 1,721,052 8,764,292 172,967,092 204,587,892
NET ASSETS
AVAILABLE
FOR
BENEFITS AT
DECEMBER 31, 1994 - - - - 78,091,627 607,532,483 698,511,345
--------- --------- --------- ---------- ----------- ------------ ------------
NET ASSETS AVAILABLE
FOR BENEFITS AT
DECEMBER 31, 1995 $1,677,723 $5,307,935 $5,245,723 $1,721,052 $86,855,919 $780,499,575 $903,099,237
========== ========== ========== ========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
12
<PAGE>
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1996 and 1995
1. Description of the Plan:
The following is a brief description of The Southern Company Employee Savings
Plan (the "Plan"), formerly the Employee Savings Plan for The Southern Company
System, and the administration thereof and is provided for general information
purposes only. The Plan includes employees, certain former employees, and
retirees of ten subsidiaries of The Southern Company: Alabama Power Company,
Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah
Electric and Power Company, Southern Communications Services, Inc., Southern
Company Services, Inc., Southern Development and Investment Group, Inc.,
Southern Electric International, Inc., and Southern Nuclear Operating Company,
Inc. (the "Employing Companies"). Participants should refer to the plan document
or the summary plan description for a more complete description of the Plan's
provisions.
The original Plan, effective March 1, 1976, is a defined contribution plan
established by The Southern Company System (the "Company") for the primary
purposes of creating added employee interest in the affairs of the Company and
supplementing retirement and death benefits of employees. Under the Plan,
amounts deducted from the compensation or deferred from compensation by an
employee (a "Participant") are contributed to the Plan on the Participant's
behalf and are supplemented by contributions of the Employing Companies. The
Plan was amended and restated effective as of July 3, 1995 in order to
incorporate a variety of plan design and other changes. This amendment and
restatement shall not be applicable to former Participants or Beneficiaries of
former Participants whose participation in the Plan terminated prior to July 3,
1995. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
The responsibility for operation and administration of the Plan is vested
in The Southern Company Employee Savings Plan Committee (the "Committee"), which
consists of the individuals serving in the positions of Director, System
Compensation and Benefits of The Southern Company; Vice-President, Human
Resources of The Southern Company; and Comptroller of The Southern Company or
any other position or positions that succeed to the duties of the foregoing
positions. However, the Plan allows a Participant to exercise control over the
assets in his account, with the exception of The Southern Company matching
contributions, and is intended to qualify as a plan described in Section 404(c)
of ERISA and Federal Regulation 2550.404(c)-1. The Board of Directors of
Southern Company Services, Inc. (the "Board") has appointed a trustee for the
Plan and has appointed outside investment managers to manage the portfolio and
investment options in which a Participant may invest his account. The Board has
the responsibility of appointing and removing the trustee. The trustee is
authorized to purchase and sell securities subject to the funding policy
provided by the Pension Fund Investment Review Committee of the Company.
Effective July 3, 1995, the trustee and recordkeeping functions of the Plan
were transferred to Merrill Lynch Trust Company of Florida (the "Trustee") and
Merrill Lynch, Pierce, Fenner & Smith, Inc. (the "Recordkeeper"), respectively.
The Recordkeeper is responsible for maintaining appropriate records of
investment transactions, participant account balances, and, under the direction
of the Committee, for distributions from Participants' accounts.
13
<PAGE>
Participation
Generally, all regular employees of the Employing Companies are eligible to
participate in the Plan provided that they have completed at least one year of
service. This eligibility requirement complies with the provisions of the
Internal Revenue Code of 1986 (the "Code") and ERISA, as amended.
Subject to the limitations of the Code, a Participant may contribute into
his investment fund any whole percentage which is not less than 1% nor more than
16% of his compensation, as defined in the Plan ("Voluntary Participant
Contribution"). In addition, a Participant may elect to have his compensation,
as defined in the Plan, reduced by a whole percentage which is not less than 1%
nor more than 16% of his compensation, such amount to be contributed on his
behalf to his account under the Plan ("Elective Employer Contribution"). A
Participant may not contribute or have contributed on his behalf in total more
than 16% of his compensation as defined in the Plan. Participants may invest in
one or more of the investment funds, provided such investments are made in
one-percent increments totaling, but not exceeding 100%.
A Participant may prospectively change the percentage of his compensation
that he has authorized as the Elective Employer Contribution to be made on his
behalf or his Voluntary Participant Contribution to another permissible
percentage in accordance with procedures established by the Committee. Such
election shall be effective as soon as practicable after it is made.
The Employing Companies currently contribute on behalf of each of the
Participants in their employ an amount equal to 75% of (a) the Elective Employer
Contribution made on a Participant's behalf, plus (b) his Voluntary Participant
Contribution, to the extent such contributions, when combined, do not exceed 6%
of his compensation, as defined in the Plan ("Employer Matching Contribution").
All Employer Matching Contributions are invested in The Southern Company Stock
Fund.
Elective Employer Contributions for Participants who are defined as
"highly compensated employees" under Section 414(q) of the Code are subject to
additional limitations designed to prohibit discrimination in favor of the
"highly compensated employees." Certain limitations also apply to Voluntary
Participant Contributions and Employer Matching Contributions allocated to
highly compensated employees.
Loans to Participants
Plan Participants also have the right to borrow a portion of their account
balances under the terms of the Plan. Under the terms of the Plan, all loans are
considered to be earmarked investments of the Participant's account, and any
repayment of principal and interest is reinvested in accordance with the
Participant's investment direction in effect on the date of such repayments.
The Committee may direct the Trustee to make a loan or loans from the Plan
to any Participant subject to certain limitations. All loans bear a rate of
interest which remains fixed over the term of the loan and may be secured only
by a Participant's account balance. The repayment of such loans is made through
payroll deductions.
14
<PAGE>
Account Distributions
Upon separation from service with the Company, the total value of a
Participant's account will be available to him or his Beneficiary, in the event
of his death. At retirement, a Participant may elect a lump-sum payment or up to
20 annual installments, provided he does not extend installments beyond his life
expectancy. Under certain conditions of financial emergency, the Committee may
accelerate the payment time of a portion or all of the remaining installments.
However, a Participant may also elect to leave all of his funds in the Plan
until mandatory distributions begin at age 70 1/2. Distributions made because of
disability, death, or termination of employment are made only as single lump-sum
distributions. Upon termination of employment for any reason other than
retirement, death, or total and permanent disability, the value of a
Participant's account will be distributed to him in a single lump sum as soon as
practical if one of the following occurs:
The vested amount in the account is not more than $3,500; or The
Participant elects to receive a distribution of his account.
If the value of the account is greater than $3,500, the Participant may
defer the distribution of his account until not later than April 1 of the
calendar year following the calendar year in which he reaches age 70 1/2.
If the distribution is being made after a Participant's death, and he has
not named a Beneficiary or if that beneficiary has predeceased him, his account
will be distributed, in preferential order to the following:
his surviving spouse,
his surviving children (equally),
his surviving parents (equally),
his surviving brothers and sisters (equally), or
his executors or administrators.
If the Participant has been married for at least one year, his Beneficiary
will be his spouse--unless his spouse consents in writing not to be his
Beneficiary and such written consent is witnessed by a notary public.
The Plan allows Participants to make routine withdrawals from their
accounts in the following order: after-tax contributions, earnings from
after-tax contributions, and up to 50 percent of employer matching funds. This
type of withdrawal does not require any hardship qualification. In order to
withdraw before-tax contributions, the Participant must establish that a
hardship situation exists. The Committee will determine if a withdrawal is for
immediate and heavy financial need. Early withdrawals can be made for hardship
cases, such as pending eviction from a principal residence, certain medical
expenses, college tuition, or the down payment on the Participant's principal
residence.
Vesting
Participants are immediately vested in their Elective Employer Contributions,
Voluntary Participant Contributions, and Employer Matching Contributions, plus
actual earnings thereon.
Participants
As of December 31, 1996 and 1995, participants in the Plan totalled 24,499 and
25,303 respectively.
Participants' Accounts
Individual accounts are maintained for each of the Plan's Participants to
reflect the particular Participant's contributions and related employer
contributions, as well as the Participant's share of the Plan's income and any
related administrative expenses.
15
<PAGE>
The Plan assigns units to its Participants, effective in 1995, with the
change from monthly to daily valuation of Participant accounts. At December 31,
1996 and 1995, 190,142,610 and 192,126,465 units were assigned to Plan
Participants, respectively. Unit values for each investment fund were as follows
at December 31, 1996 and 1995:
1996 1995
----- ----
Retirement Preservation Fund $ 1.00 $1.00
Fully Managed Fund 12.53 11.00
Equity Index Fund 49.80 40.49
Core Fixed Income Fund 10.64 10.45
Special Value Fund 17.83 17.10
Global Allocation Fund 14.55 13.88
International Equity Fund 11.33 11.13
The Southern Company Stock Fund 22.63 24.63
Plan Termination
Although the Company has not expressed any intent to terminate the Plan, the
Company has the right to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, each Participant's fully vested account balance shall be
distributed to the Participant in a non-discriminatory manner, as soon as
practicable after such termination.
2. Investment Options:
During the first six months of 1995, the Plan had four investment options
available. Each investment fund had specific guidelines and limitations as to
the type of securities eligible for investment. The primary types of securities
eligible for investment by each fund were as follows: (1) fixed income
obligations for the Fixed Income Fund, (2) common or capital stocks or
securities convertible into common or capital stocks of corporations other than
The Southern Company or its subsidiaries for the Equity Fund, (3) common stock
of The Southern Company for The Southern Company Stock Fund, and (4) common
stock selected from time to time to comprise Standard and Poor's (S&P) Composite
Index of 500 Stocks for the S&P 500 Index Fund. In addition, monies pending
investment held by each of the funds described above were temporarily invested
in short-term, interest-bearing obligations.
On July 3, 1995, the trustee and recordkeeping functions of the Plan were
transferred to Merrill Lynch Trust Company of Florida and Merrill Lynch, Pierce,
Fenner & Smith, Inc., respectively. The Plan now offers eight investment
options. Participants may direct their investments into one or more of the
following funds: (1) Retirement Preservation Fund investing in a
common/collective trust which invests primarily in a broadly diversified
portfolio of guaranteed investments contracts and in U.S. government securities,
(2) Fully Managed Fund investing in stocks, bonds, and cash equivalents, (3)
Equity Index Fund investing in a common/collective trust which invests seeking
to approximate the total return of the Standard & Poor's 500 Composite Stock
Index, (4) Core Fixed Income Fund investing in all sectors of the U.S. domestic
bond market, (5) Special Value Fund investing in a mutual fund which invests
seeking long-term growth of capital by investing in a diversified portfolio of
securities, (6) Global Allocation Fund investing in a mutual fund which invests
seeking high return from a global portfolio of U.S. and foreign stocks and bonds
and cash equivalents, (7) International Equity Fund investing in a mutual fund
which invests seeking capital appreciation through investment in a diversified
portfolio of primarily equity securities of issuers located in countries other
than the United States, and (8) The Southern Company Stock Fund investing in
common stock of The Southern Company. The Company match will continue to be
non-participant directed and will be invested in The Southern Company Stock
Fund. Investment management and administrative fees for the funds listed as
items (1), (2), (3), and (8) above and certain other plan and trust expenses are
paid by the Employing Companies. Investment management and administrative fees
for the funds listed as items (4), (5), (6), and (7) above are paid from the
particular investment fund to which they relate. The Plan's brokerage fees are
16
<PAGE>
included in the cost of the investments or netted against the sales proceeds.
The objectives of the respective funds are not necessarily an indicator of
actual performance. Investments in common/collective trusts are stated at the
fair value of the underlying assets held by the fund except for
benefit-responsive investment contracts included in the Retirement Preservation
Fund which are carried at contract value (cost plus accrued interest).
3. Accounting Policies:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of
accounting. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported activity during the reporting period. Actual results
could differ from those estimates.
Presentation
Certain prior year amounts have been reclassified to conform with current
presentation.
Investments
Investments are stated at fair value as determined by the trustee from quoted
market price information. The net appreciation (depreciation) in fair value of
investments in the accompanying statements of changes in net assets available
for benefits reflects the net difference between the market value and the cost
of investments bought during the year and the net difference between market
value and the beginning of the year market value of assets held, sold, or
distributed.
The fair market values of individual assets which represent 5% or more of
the Plan's net assets as of December 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1995
-------------- -------------
The Southern Company common stock $1,502,343,127 $1,674,952,587
Merrill Lynch Retirement Preservation Trust 106,339,384 108,267,348
Merrill Lynch Equity Index Trust 124,391,370 -
</TABLE>
4. Contributions:
Contributions to the Plan by the Employing Companies and their respective
Participants for the years ended December 31, 1996 and 1995, are set forth
below:
<TABLE>
<CAPTION>
<S> <C>
1996 Contributions
--------------------------------------------------------
Company Participants' Total
-------- ------------ -----
Alabama Power Company ...................................... $10,483,735 $17,604,696 $ 28,088,431
Georgia Power Company....................................... 17,664,640 29,145,709 46,810,349
Gulf Power Company.......................................... 2,020,358 3,723,025 5,743,383
Mississippi Power Company................................... 2,140,153 3,674,250 5,814,403
Savannah Electric and Power Company......................... 859,142 1,462,143 2,321,285
Southern Communications Services, Inc....................... 111,278 179,365 290,643
Southern Company Services, Inc.............................. 6,307,797 10,131,143 16,438,940
Southern Development and Investment Group, Inc.............. 104,139 178,261 282,400
Southern Electric International, Inc........................ 656,252 1,086,201 1,742,453
Southern Nuclear Operating Company, Inc..................... 2,588,970 4,245,383 6,834,353
----------- ----------- ------------
$42,936,464 $71,430,176 $114,366,640
=========== =========== ============
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1995 Contributions
--------------------------------------------------------
Company Participants' Total
------- ------------- -----
Alabama Power Company ...................................... $11,609,336 $19,483,958 $31,093,294
Georgia Power Company....................................... 18,817,029 30,684,608 49,501,637
Gulf Power Company.......................................... 2,164,999 3,947,473 6,112,472
Mississippi Power Company................................... 2,218,419 3,802,242 6,020,661
Savannah Electric and Power Company......................... 885,183 1,521,768 2,406,951
Southern Communications Services, Inc....................... 86,313 142,663 228,976
Southern Company Services, Inc.............................. 5,874,317 9,457,752 15,332,069
Southern Development and Investment Group, Inc.............. 66,384 100,953 167,337
Southern Electric International, Inc........................ 602,820 992,185 1,595,005
Southern Nuclear Operating Company, Inc..................... 2,679,623 4,483,831 7,163,454
----------- ----------- ------------
$45,004,423 $74,617,433 $119,621,856
=========== =========== ============
</TABLE>
5. Tax Status:
The Plan received a determination letter dated June 10, 1996 from the Internal
Revenue Service which states that the Plan, as amended through March 4, 1996, is
in compliance with Section 401(a) and applicable subsections of Section 410(b)
of the Code as of that date. In the opinion of the Company's management, the
Plan is currently operating in compliance with applicable provisions of the
Code. Therefore, the Plan administrator believes that the Plan was qualified and
the related trust was tax-exempt as of December 31, 1996 and 1995; accordingly,
no provision for income taxes has been made in the accompanying financial
statements.
Employer contributions and income of the Plan are not taxable to
Participants until withdrawals or distributions are made.
6. Reconciliation to the Form 5500:
As of December 31, 1996 and 1995, the Plan had approximately $9,636,241 and
$5,833,206, respectively, of pending distributions to Participants who elected
to withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability in the
accompanying statements of net assets available for benefits in accordance with
generally accepted accounting principles.
The following table reconciles net assets available for benefits for the
years ended December 31, 1996 and 1995 per the financial statements to the Form
5500 to be filed by the Company:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net Assets Available
Benefits Distributions for Benefits
Payable to Participants 1996 1995
------- --------------- ---- ----
Per financial statements $ - $199,351,700 $2,026,915,071 $2,122,883,388
Accrued benefit payments 9,636,241 9,636,241 (9,636,241) (5,833,206)
Reversal of 1994 accrual
for benefit payments - (5,833,206) - -
----------- ------------ ------------- ---------------
Per Form 5500 $9,636,241 $203,154,735 $2,017,278,830 $2,117,050,182
========== ============ ============== ==============
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Schedule I
Page 1 of 4
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description of Investment Including Maturity Date,
Identity of Issuer, Borrower Rate of Interest, Collateral, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d)Cost (e) Current Value
----------------------------- -------------------------------------------------- ---- -------------
RETIREMENT PRESERVATION FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 277,437 shares $ 277,437 $ 277,437
Common/Collective Trust:
* Merrill Lynch Trust Company,
Merrill Lynch
Retirement Preservation
Trust Fund par $1 106,339,384 shares 106,339,384 106,339,384
------------ -----------
Total Retirement Preservation Fund 106,616,821 106,616,821
------------ -----------
FULLY MANAGED FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 6,671,270 shares 6,671,270 6,671,270
------------ -----------
Treasury Securities:
United States Treasury Bond AAA, 6.25%, due 08/15/23 899,219 937,500
United States Treasury Note AAA, 5.75%, due 08/15/03 11,152,578 11,155,000
United States Treasury Note AAA,6.50%, due 05/15/05 994,063 1,006,720
------------ -----------
Treasury Securities 13,045,860 13,099,220
------------ -----------
United States Collaterized
Mortgage Obligations:
Federal Home Loan Mortgage Corp. Coll Disc Note, 7%, due 08/15/08 1,905,000 1,953,740
------------ -------------
Corporate Bonds:
Anardarko Petroleum Corp Notes 5.875% ,due 10/15/03 3,800,360 3,741,160
Argentina-Republic Global Notes BB-, 8.375%, due 12/20/03 2,137,500 2,353,125
Bank Hawaii Subordinated Note A-, 6.875%, due 06/01/03 4,020,000 3,962,640
Bankers Trust NY Corp Sub Deb
FLT Rate Note AA+, FLT%, due 03/19/03 4,659,510 4,745,350
Cardinal Health Inc Notes A-, 6.500%, due 02/15/04 1,317,940 1,275,716
Carnival Corporation Notes A-, 6.150%, due 10/01/03 4,923,070 4,730,050
Chase Manhattan Corp
Subordinated Note 6.50%, due 1/15/09 1,996,160 1,894,380
Diamond Shamrock Inc. 7.650%, due 7/1/26 1,996,900 2,073,280
Enron Corporation Senior
Subordinated Note 6.750%, due 07/01/05 3,966,680 3,931,240
FirstBank Puerto Rico
Subordinated Note BB+, 7.625%, due 12/20/05 485,285 485,285
Hertz Corporation Senior Notes A, 6.375%, due 10/15/05 1,004,610 948,610
Loewen Group International Inc. BA1, 7.750%, due 10/15/01 401,568 407,000
Nabisco Incorporated Notes BBB, 6.700%, due 06/15/02 4,961,500 4,950,300
Philadelphia Electric Co First
and Refunding Mtg BBB+, 5.625%, due 11/01/01 960,280 954,680
Tenet Healthcare Corporation BB, 8.625%, due 12/01/03 1,011,250 1,055,000
Williams Holdings of Delaware BBB-, 6.250%, due 2/1/06 3,979,160 3,761,960
------------ -------------
Corporate Bonds 41,621,773 41,269,776
------------ -------------
Foreign Corporate Bonds:
Coca Cola FEMSA 8.950%, due 11/1/06 497,250 494,550
------------ -----------
Total Corporate Bonds 42,119,023 41,764,326
------------ -----------
Corporate Medium Term Notes:
McDonnell Doug Financial
Corporation BBB, 5.480%, due 2/8/1999 2,998,560 2,938,470
NM General Motors Acceptance 6.625%, due 9/19/02 3,996,400 3,962,040
NationsBank Subordinated Note A,6.200%, due 8/15/03 1,006,540 967,370
------------ -----------
Corporate Medium Term Notes 8,001,500 7,867,880
------------ -----------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Schedule I
Page 2 of 4
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description of Investment Including Maturity Date,
Identity of Issuer, Borrower Rate of Interest, Collateral, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d) Cost (e) Current Value
----------------------------------- ----------------------------------------------------------------------------------
Common Stocks:
AllState Corporation 45,000 shares 1,919,700 2,604,375
American International Group Inc. 25,000 shares 1,554,754 2,706,250
Archer Daniels Midland Company 110,000 shares 1,825,966 2,420,000
Berkley W R Corp 40,000 shares 2,104,320 2,030,000
Birmingham Steel Corporation 120,300 shares 1,928,033 2,285,700
Carnival Corporation 85,000 shares 1,964,905 2,805,000
Columbia/HCA Healthcare Corporation 70,000 shares 2,083,242 2,852,500
Cooper IndustriesIncorporated 65,000 shares 2,419,062 2,738,125
CVS Corporation Delaware 50,000 shares 2,176,125 2,068,750
Dexter Corporation 70,000 shares 1,746,638 2,231,250
El Paso Natural Gas Company 35,000 shares 3,828,140 1,767,500
Federal National Mortgage Association 70,000 shares 1,476,319 2,633,750
Fremont General Corporation 80,000 shares 1,845,500 2,480,000
Frontier Corporation 80,000 shares 2,332,767 1,810,000
General Electric Company 25,000 shares 959,552 2,471,875
General Motors Corporation 45,000 shares 2,198,157 2,508,750
Glaxco Wellcome PLC England 85,000 shares 2,062,995 2,698,750
Harrah's Entertaiment Incorporated 137,500 shares 2,563,979 2,732,813
Imperial Chemical Industries PLC 50,000 shares 2,559,919 2,600,000
Lockheed Martin Corporation 30,000 shares 2,246,326 2,745,000
Masco Corporation 80,000 shares 2,360,099 2,880,000
Millenium Chemicals Incorporated 25,000 shares 338,064 443,750
Nokia Corporation 47,500 shares 1,726,201 2,737,187
PennCorp 60,000 shares 2,027,113 2,160,000
Phillips Pete Company 50,000 shares 1,635,983 2,212,500
Sphere Drake Holdings Limited 120,000 shares 1,419,997 1,065,000
Tenneco Incorporated 50,000 shares 0 2,256,250
TransAmerica Corporation 35,000 shares 2,414,818 2,765,000
Travelers Group Inc. Delaware 60,000 shares 1,939,149 2,722,500
Wal Mart Stores Inc. 100,000 shares 2,516,755 2,275,000
Weyerhauser Company 50,000 shares 2,126,782 2,368,750
Williams Companies Delaware 47,500 shares 1,662,263 1,781,250
YPF Sociedad Anon American Depository
Receipts 100,000 shares 1,958,657 2,525,000
----------- -----------
Common Stocks 63,922,280 77,382,575
----------- -----------
Total Fully Managed Fund 138,165,822 148,739,011
----------- -----------
* Represents a party-in-interest to the Plan.
The accompanying notes are an integral part of this schedule.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Schedule I
Page 3 of 4
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description of Investment Including Maturity Date,
Identity of Issuer, Borrower Rate of Interest, Collateral, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d)Cost (e) Current Value
-------------------------------- ---------------------------------------------------- ---- -------------
EQUITY INDEX FUND:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 2,408,217 shares $ 2,408,217 2,408,217
Common/Collective Trust:
* Merrill Lynch Trust Company,
Merrill Lynch
Equity Index Trust -- Tier III par $1 2,497,868 shares 95,238,037 124,391,370
---------- -----------
Total Equity Index Fund 97,646,254 126,799,587
---------- -----------
CORE FIXED INCOME FUND:
Temporary Investments:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 686,872 shares 686,872 686,872
*
Temporary Investments 686,872 686,872
--------- ----------
Treasury Securities:
United States, US Treasury Note AAA, 6.750%, due 04/30/00 501,523 509,455
United States, US Treasury Note AAA, 5.750%, due 10/31/00 499,828 493,360
United States, US Treasury Note AAA, 6.500% , due 10/15/06 612,219 603,282
--------- ----------
Treasury Securities 1,613,570 1,606,097
--------- ----------
U.S. Goverment Agency Obligations:
Federal Home Loan Mortgage
Corporate Callable
Debenture 6.875%, due 11/22/06 500,000 493,670
Government National Mortgage
Association 6.500%, due 03/15/26 194,260 191,006
Federal Home Loan Mortgage
Corporation 6.500%, due 12/01/11 601,455 595,013
--------- ----------
Total U.S. Government Agency
Obligations 1,295,715 1,279,689
--------- -----------
Corporate Bond:
Public Service Electric & Gas Co.,
First Refunding Mortgage Bonds A-, 6.500%, due 05/01/04 507,885 483,320
--------- ----------
Total Core Fixed Income Fund 4,104,042 4,055,978
--------- ----------
SPECIAL VALUE FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management,
Merrill Lynch
Special Value Fund, Inc. -- Class A par $0.10 1,042,642 shares 18,581,731 18,964,289
---------- ----------
GLOBAL ALLOCATION FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management, Merrill Lynch
Global Allocation Fund, Inc. -- Class A par $0.10 1,341,988 shares 19,532,137 19,536,790
---------- ----------
INTERNATIONAL EQUITY FUND:
Investment in Registered Securities:
* Merrill Lynch Asset Management, Merrill Lynch
International Equity Fund -- Class A par $0.10 377,557 shares 4,288,685 4,333,609
--------- ----------
LOANS DUE FROM PARTICIPANTS (interest rates vary from 6.0% to 11.5%) 85,694,959 85,694,959
---------- ----------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Schedule I
Page 4 of 4
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description of Investment Including Maturity Date,
Identity of Issuer, Borrower Rate of Interest, Collateral, Par or Maturity Value,
(a) (b) Lessor, or Similar Party (c) Number of Shares (d)Cost (e) Current Value
---------------------------- ------------------------------------------------- ---- -------------
THE SOUTHERN COMPANY STOCK FUND--
PARTICIPANT DIRECTED PORTION:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 58,704 shares 58,704 58,704
Common Stock:
* The Southern Company,
The Southern
Company Common Stock par $5 30,995,042 shares 506,798,801 701,330,711
---------------- ---------------
Total Southern Company Stock Fund --
Participant
Directed Portion 506,857,505 701,389,415
--------------- ---------------
THE SOUTHERN COMPANY STOCK FUND--
NON-PARTICIPANT DIRECTED PORTION:
Temporary Investment:
* Merrill Lynch Trust Company,
Merrill Lynch
CMA Money Fund par $1 12,861 shares $ 12,861 $ 12,861
Common Stock:
* The Southern Company,
The Southern Company
Common Stock par $5 35,406,864 shares 578,936,332 801,012,416
-------------- -------------
Total Southern Company
Stock Fund--
Non- Participant Directed Portion 578,949,193 801,025,277
------------- -------------
TOTAL INVESTMENT OF ALL FUNDS $1,560,437,149 $2,017,155,736
============== ==============
(NOTE) The last sale price (New York Stock Exchange composite transactions) for The Southern Company common stock on June 24,
1997 was $21.875 as compared to a price of $22.625 on December 31, 1996.
</TABLE>
* Represents a party-in-interest to the Plan.
The accompanying notes are an integral part of this schedule.
22
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule II
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
Item 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(h) Current
(a) (b) Description of asset value of
Identity of (include interest asset
party rate and on (i) Net
involved maturity in case (c)Purchase (d) Selling (e)Lease (f) Expense (g) Cost of transaction gain
of a loan price price rental incurred asset date or (loss)
----------- -------------------- -------- -------- ------ -------- -------- ----------- ---------
The Southern Common Stock
Company 789 transactions $214,763,637 $ - $- $- $ - $214,763,637 $ -
1,062 transactions $ - $191,420,973 $- $- $137,771,838 $191,420,973 $53,649,135
</TABLE>
The accompanying notes are an integral part of this schedule.
23
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
The Southern Company Employee Savings Plan Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
/s/ C. Alan Martin
C. Alan Martin, Chairman
Savings Plan Committee
June 24, 1996
24
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated May 30, 1997, included in this annual report of
The Southern Company Employee Savings Plan on Form 11-K for the year ended
December 31, 1996, into the Plan's previously filed Registration Statement No.
33-23152.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
June 24, 1997
25
