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, 1995
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 and the address of the plan,
if different from that of the issuer named below:
SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
c/o SOUTHERN ENERGY RESOURCES, INC.
900 Ashford Parkway
Atlanta, Georgia 30338
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
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SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
FORM 11-K
DECEMBER 31, 1995
and
JANUARY 1, 1995
TABLE OF CONTENTS
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Page No.
Exhibits 3
Report of Independent Public Accountants 4
Statements of Net Assets Available for Benefits, With Fund Information--
December 31, 1995 and January 1, 1995 5
Statement of Changes in Net Assets Available for Benefits, With Fund
Information--for the year ended December 31, 1995 6
Notes to Financial Statements and Schedules 7
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes--
December 31, 1995 12
Schedule II - Item 27d - Schedule of Reportable Transactions--for the year ended
December 31, 1995 13
Signature 14
Consent of Independent Public Accountants 15
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EXHIBITS
A - Southern Electric International, Inc. Savings Plan for Covered Employees.
(Designated in Registration No. 33-58371, as Exhibit 4(c).)
B - Consent of Independent Public Accountants.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefit Plan Administration Committee
of the Southern Electric International, Inc.
Savings Plan for Covered Employees:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of the SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES as of December 31, 1995 and January 1, 1995
and the related statement of changes in net assets available for benefits, with
fund information, for the year ended December 31, 1995. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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, 1995 and January 1, 1995 and the changes in net assets available
for benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The fund information in the statement of net assets
available for benefits and the statement 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/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
August 22, 1997
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SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1995 AND JANUARY 1, 1995
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The Southern Company Merrill Merrill Merrill
Common Stock Lynch Lynch Lynch
-------------------------- Retirement Equity Capital Participant December 31, January 1,
Nonparticipant- Participant- Preservation Index Trust Fund Loan 1995 1995
Directed Directed Trust Fund Fund Class A Fund Total Total
-------------- ------------- ------------- ---------- -------- ----------- --------- -------
INVESTMENTS, at fair value:
Common stock $146,633 $552,632 $ 0 $ 0 $ 0 $ 0 $ 699,265 $0
Mutual funds 0 0 0 96,448 174,803 0 271,251 0
Loans to participants 0 0 0 0 0 78,445 78,445 0
INVESTMENTS, at contract value:
Fixed income collective trust fund 0 0 184,061 0 0 0 184,061 0
EMPLOYER CONTRIBUTIONS RECEIVABLE 6,575 0 0 0 0 0 6,575 0
EMPLOYEE CONTRIBUTIONS RECEIVABLE 0 8,222 2,755 3,012 4,419 0 18,408 0
-------- -------- -------- ------- -------- ------- ---------- ---
NET ASSETS AVAILABLE FOR BENEFITS $153,208 $560,854 $186,816 $99,460 $179,222 $78,445 $1,258,005 $0
======== ======== ======== ======= ======== ======= ========== ==
The accompanying notes are an integral part of these statements.
</TABLE>
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SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION,
FOR THE YEAR ENDED DECEMBER 31, 1995
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The Southern Company Merrill Merrill Merrill
Common Stock Lynch Lynch Lynch
---------------------------- Retirement Equity Capital Participant
Nonparticipant- Participant- Preservation Index Trust Fund Loan
Directed Directed Trust Fund Fund Class A Fund Total
-------------- ---------- ---------- ----------- ------- --------- ------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Dividends $ 2,226 $ 11,305 $ 6,119 $ 0 $ 15,702 $ 0 $ 35,352
Interest 0 1,207 170 479 1,035 0 2,891
Net appreciation in fair value of
investments 13,051 72,297 0 11,910 5,282 0 102,540
-------- -------- -------- -------- -------- ------- ----------
15,277 84,809 6,289 12,389 22,019 0 140,783
-------- -------- -------- -------- -------- ------- ----------
Contributions:
Employer 137,931 0 0 0 0 0 137,931
Employee 0 492,133 195,497 105,785 185,876 0 979,291
137,931 492,133 195,497 105,785 185,876 0 1,117,222
Loan principal and interest payments 0 3,762 806 1,773 3,409 (9,750) 0
-------- -------- -------- -------- -------- ------- ----------
Total additions 153,208 580,704 202,592 119,947 211,304 (9,750) 1,258,005
-------- -------- -------- -------- -------- ------- ----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefit payments 0 0 0 0 0 0 0
New loans issued 0 29,428 13,844 15,152 29,771 (88,195) 0
-------- -------- -------- -------- -------- ------- ----------
Total deductions 0 29,428 13,844 15,152 29,771 (88,195) 0
-------- -------- -------- -------- -------- ------- ----------
INTERFUND TRANSFERS 0 9,578 (1,932) (5,335) (2,311) 0 0
-------- -------- -------- -------- -------- ------- ----------
NET INCREASE 153,208 560,854 186,816 99,460 179,222 78,445 1,258,005
NET ASSETS AVAILABLE FOR BENEFITS, beginning
of year 0 0 0 0 0 0 0
-------- -------- -------- -------- -------- ------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $153,208 $560,854 $186,816 $ 99,460 $179,222 $ 78,445 $1,258,005
======== ======== ======== ======== ======== ======== ==========
The accompanying notes are an integral part of this statement.
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SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1995 AND JANUARY 1, 1995
1. PLAN DESCRIPTION
General
The Southern Electric International, Inc. Savings Plan for Covered
Employees (the "Plan") is a defined contribution plan sponsored by
Southern Energy Resources, Inc., (the "Company") covering those employees
of the Company who are located at its Mobile, Alabama facility and who are
covered by a collective bargaining agreement that provides for
participation in the Plan.
The Company, through a wholly owned subsidiary, Mobile Energy Services
Company, Inc., acquired certain assets of Scott Paper Company and assigned
those assets to Mobile Energy Services Company, L.L.C. Under the employee
transition agreement of the purchase, certain former Scott Paper Company
employees became employees of the Company. The Plan was established
January 1, 1995, and all previous Scott Paper Company employees employed
by the Company who were subject to collective bargaining agreements were
immediately eligible to participate. Full-time eligible employees hired
after January 1, 1995 become eligible to participate after completion of
one year of service, as defined by the Plan. The Plan is subject to the
applicable provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"), as amended. The purpose of the Plan is to provide eligible
employees a qualified plan which meets the requirements of Sections 401(a)
and 401(k) of the Internal Revenue Code of 1986 (the "Code"). The
following description provides only general information about the Plan as
in effect December 31, 1995. Participants should refer to the plan
document for a more complete description of the Plan's provisions, certain
of which have been amended from time to time.
Plan Administration
The Company appointed Merrill Lynch Trust Company (the "Trustee") as
trustee. The Trustee executes investment transactions for the Plan. The
Benefit Plan Administration Committee appointed by the Company serves as
plan administrator.
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Contributions and Withdrawals
Participants may contribute from 1% to 16% of their compensation annually,
subject to certain limitations as defined by the Plan, and participants
may change these percentages at any time. The Company provides a matching
contribution equal to 60% of each participant's contribution up to a
maximum of 6% of compensation for 1995. The Company's matching
contribution is invested solely in The Southern Company common stock.
Each participant's account is credited with the participant's
contribution, an allocation of the Company's contribution, and plan
earnings (losses). Allocations are based on participant compensation or
account balances, as defined.
Benefits
A participant may elect to receive an amount equal to the value of the
participant's vested interest in his or her account upon termination of
service. The forms of payment are lump-sum distributions or, for retirees,
annual installments for a period not to exceed 20 years.
Vesting
Participants are immediately vested in their accounts.
Investment Options
Participants are offered four investment options in which they may invest
their contributions. Participants are allowed to change their investment
elections at any time. A description of each investment option available
at December 31, 1995 is provided below:
o Merrill Lynch Retirement Preservation Trust Fund
This fund invests in government agency securities, guaranteed
investment contracts, and money market instruments.
o Merrill Lynch Capital Fund Class A
This fund invests primarily in equity securities, corporate
bonds, and money market securities.
o Merrill Lynch Equity Index Trust Fund
This fund invests in certain common stocks that approximately
comprise the performance of the Standard & Poor's 500
composite stock price index.
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o Company Stock Fund
This fund invests primarily in The Southern Company common
stock.
Loans to Participants
A participant may borrow the lesser of $50,000, less his/her highest
outstanding loan balance in the previous 12 months, or 50% of his/her
vested account balance, with a minimum loan amount of $1,000. Loans are
repayable through payroll deductions over the respective term of the loan.
The interest rate is determined by the plan administrator based on
prevailing market conditions and is fixed over the life of the note.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared using the accrual
basis of accounting.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
Administrative Expenses
Substantially all administrative expenses are paid by the Company.
Investment Valuation
Investments other than investment contracts are stated at market value.
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year; investments
traded in the over-the-counter market and listed securities for which no
sale was reported on the last day of the plan year are valued at the last
reported bid price.
On September 23, 1994, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 94-4, "Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans," which requires investment contracts that are
not fully benefit-responsive to be reported at contract value.
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The Plan adopted this statement effective January 1, 1995. The Plan's
investment in the Merrill Lynch Retirement Preservation Trust Fund is
fully benefit-responsive and is presented at contract value on the
accompanying statements of net assets available for benefits. The contract
value approximates fair value as of December 31, 1995. The crediting
interest rate was 6.49% at December 31, 1995, and the yield was 6.73% for
the year ended December 31, 1995.
Net Appreciation in Fair Value of Investments
Net realized gains (losses) and unrealized appreciation (depreciation) are
recorded in the accompanying statement of changes in net assets available
for benefits, with fund information, as net appreciation in fair value of
investments.
3. INVESTMENTS
Individual assets that represent 5% or more of the Plan's net assets
available for benefits as of December 31, 1995 are as follows:
Investments, at fair value:
The Southern Company common stock $ 699,265
Merrill Lynch Equity Index Trust Fund 96,448
Merrill Lynch Capital Fund Class A 174,803
Investments, at contract value:
Merrill Lynch Retirement Preservation Trust Fund 184,061
4. TAX STATUS
The Company received a determination letter dated July 24, 1996 in which
the Internal Revenue Service stated that the Plan, as adopted, was in
compliance with the applicable requirements of the Code. The Company has
subsequently received a second favorable determination letter dated
January 27, 1998 which also states that the Plan is in compliance with the
applicable requirements of the Code. The second letter is subject to
adoption of the Second Amendment to the plan which will be executed in the
near future. The plan administrator believes that the Plan is currently
designed and is being operated in compliance with the applicable
requirements of the Code. Therefore, the plan administrator believes that
the Plan was qualified and tax-exempt for the year ended December 31,
1995.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
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6. SUBSEQUENT EVENTS
Effective October 5, 1996, the Plan was renamed the Southern Energy, Inc.
Savings Plan for Covered Employees.
Effective June 23, 1997, the Plan was amended to permit members of the
International Brotherhood of Electrical Works Local 2129 to contribute
from 1% to 18% of their compensation to the Plan.
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SCHEDULE I
SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
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Identity of Issuer, Borrower, Current
Lessor, or Similar Party Description of Investment Cost Value
--------------------------- ------------------------------------------------------------ --------- ------------
* The Southern Company 28,990 shares of common stock $ 615,048 $ 699,265
* Merrill Lynch Merrill Lynch Retirement Preservation Trust Fund 184,061 184,061
* Merrill Lynch 2,483 units of Merrill Lynch Equity Index Trust Fund 85,291 96,448
* Merrill Lynch 5,868 units of Merrill Lynch Capital Fund Class A 170,637 174,803
* Various plan participants Participant loans, with interest rates ranging from 8.25% to 8.75% 78,445 78,445
---------- ----------
$1,133,482 $1,233,022
========== ==========
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*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
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<PAGE>
SCHEDULE II
SOUTHERN ELECTRIC INTERNATIONAL, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
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Purchases Sales
------------------------- -----------------------------------------
Number of Purchase Number of Selling Cost of Net
Identity of Party Involved Description of Investment Transactions Price Transactions Price Assets Gain
--------------------------- ---------------------------- -------------- --------- ------------- ------- --------- ------
* Southern Company Common stock 76 $643,345 12 $29,428 $28,297 $1,131
* Merrill Lynch Merrill Lynch
Retirement Preservation
Trust Fund,
a fixed income
collective
trust fund 56 199,837 6 15,776 15,776 0
* Merrill Lynch Merrill Lynch
Equity Index
Trust Fund, an
equity mutual fund 44 105,162 11 20,623 19,871 752
* Merrill Lynch Merrill Lynch
Capital Fund
Class A, an
equity mutual fund 48 201,738 9 32,217 31,101 1,116
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed by the undersigned thereunto duly
authorized.
SOUTHERN ENERGY, INC.
SAVINGS PLAN FOR COVERED EMPLOYEES
(formerly known as the Southern Electric International, Inc.
Savings Plan for Covered Employees)
/s/ Vance Booker
Vance Booker
Vice President, Administration
of Southern Energy Resources, Inc.
August 21, 1998
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<PAGE>
EXHIBIT B
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated August 22, 1997 included in this annual report of
Southern Electric International, Inc. Savings Plan for Covered Employees on Form
11-K for the year ended December 31, 1995, into the Plan's previously filed
Registration Statement No. 33-58371.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Atlanta, Georgia
August 21, 1998
