ML20073H200
| ML20073H200 | |
| Person / Time | |
|---|---|
| Site: | Farley  |
| Issue date: | 12/31/1990 |
| From: | Whitson D ALABAMA POWER CO. |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 9105070006 | |
| Download: ML20073H200 (44) | |
Text
__ - _ - _ _ _
Aiabama Power Company ,
000 North 18th Street Post Off.ce Box 2641 Birmmgham, Alabama 352910042 Telephone 205 250 2497 David L. Whitson Ass:stant Treasurer NabamaPower the southem e%ctrc system April 26, 1991 Mr. Jerome Saltzman Chief, Antitrust and Indemnity Group Nuclear Reactor Regulation Nuclear Regulatory Commission Vashington, D.C. 20555
Dear Mr. Saltzman:
Enclosed is the annual submission of Alabama Power Company with respect to the retrospective premium guarantee required under the Price-Anderson Act, as amended, applicable to its Joseph M. Farley Nuclear Plant. We have elected to satisfy this guarantee requirement by submitting annual certified financial statements and cash projections, shoving that a cash flow can be generated and would be available for payment of retrospective premiums up to $20,000,000 within three months after submission of the statement. In this connection, enclosed are the following:
- 1. 1990 Annual Report which includes financial statements for the calendar year 1990, together with the report on such statements by Arthur Andersen & Co., independent public accountants;
- 2. Unaudited Financial Statements for the quarter ended March 31, 1991;
- 3. Cash Flow Projections for the period January 1,1991 through December 31, 1991, showing that cash flow of $20,000,000 can be generated and would be available for payment of retrospective premiums within three months after submission of the statement.
Please acknowledge receipt of the enclosures by signing and returning the enclosed copy of this letter.
Very truly yours, 7 m f /l
- ggM%%%R%SbShe Onn~$ /u/ HAM I W DLV
- lv Enclosures au a 6,
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1 bc: Messrs. E. B. Harris l T. J. Bowden
.B. H. Guthrie l V. B. Hutchins, III. l J. V. Hinor ;
J. H. Farley - Southern Nuclear J. A. Ripple - Southern Nuclear C. L. Whatley - SCS i
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ALABAMA POVER COMPANY Internal Cash Flov for Joseph H. Farley Nuclear Power Station (Dollars in Thousands) 1990 1991 Actual Projections Net Income After Taxes $351,315 S371,729 i Less Dividends Paid 259,312 266,856 l Retained Earnings 92,003 104,873 l; Adjustments:
f Depreciation and Amortization 331,858 335,891 Deferred Income Taxes and Investment Tax Credits 64,612 35,457 Allowance for Funds Used During
- j. Construction (Gross) ( 46,731) ( 19,937)
!' Total Adjustments 349,739 351,411 Internal Cash Flov $441.742 $41642B4 Average Quarterly Cash Flov 1110dM $1MAZ1 lt Percentage Ownership in all j Operating Nuclear Units:
l Joseph H. Farley Units 1 and 2 100%
Maximum Total Contingent Liability $20,000
L .This statement reflects the'ususl' ALABAMA POWER COMPANY f ' accountin' g. practices 1of.. thef Company _ z STATEMENTS OF INCOME F on'the. basis of interim? figures'and .(Stated in Thousands of Dollars)'
, .is subject to audit and end of year-4 adjustments.
i.
3 MONTHS ENDED l MARCH 31, i- 1991 i
OPERATING REVENUES............................................. $589,656 i
OPERATING EXPENSES:
Operation -
Fuel ...................................................... 153,429 .
- Purchased and interchanged power, Net ..................... 18,831 l 0ther...................................................... 98,538 j Maintenance....................................,............. 52,271 -
l Depreciation and amortization ............................... 66,210 t
Taxes other than income taxes ............................... 42,207 4
Federal and state income taxes............................... 36,592 Total operating-expenses................................. 468,078 OPERATING INCOME .............................................. 121,578 T
t
, OTHER INCOME (EXPENSE):
Allowance for equity funds used during construction.......... 2,997 Income from subsidiary.....,................................. 1,067 Other, net................................................... 1,926 Income before interest charges........................... 127,568 INTEREST CHARGES:
Interest on long-term debt .................................. 54,361 Allowance for debt funds used during construction. . . . . . . . . . . . (5,310)-
Amortization of debt' discount, premiumLand expenses, net..... 574 Other interest charges....................................... 6,536.
Net interest charges..................................... 56,161 4
i NET INCOME .................................................... 71,407 DIVIDENDS ON PREFERRED-STOCK................................... 9,176 NET INCOME AFTER DIVIDENDS'ON PREFERRED STOCK ................. $ 62,231 4
4 ed/33/1
. -- _ .- _.- = .m. __ . , _ . _ - - - - - . . . . ~ _ _ . 2 Y
A1.ARAMA POWER COMPANY J- 4 Balance Sheet (Stated in Thousands of Dollars)
UNAUDITED At Warch 31.
- ASSETS 1991 UTILITY PLANT: -------------
Plant in service, at original cost........... ....... S 186 Less Accumulated provision for depreciation.. . . . . 9,016,593 2.759 6,256.593 Nuclear fuel, at emortised cost.................... . 136,063~
Construction work in pro 9ress............... ... .... 249 923 6,642,579 Less - Property-related accumulated deferred
_ income taxes....................... ..... ........ 1,115,969 5,526.610 OTHER PROPERTY AND INVESTWENTS:
Southern Electric Generating Company, at equity...... 30,825 Nonutility property,' net.............................
.4,991
. Miscellaneous.............. ...... ..... . . . .. 6,838
........42654 ....
CURRENT ASSETS:
Cash.................................... . .......... 10,407 1 Temporary cash intestments, at cost................ .
. Receivables - '
Customer accounts receivable......... . ....... 243,298 l Other accounts and notes receivable. ...... . . . . . 96,533 ;
Affiliated companies..................... ........ 48.908 i Accumulated provision for uncollectible accounts.. (75,044)
Refundable income teses............. ...... ....... 12 191,185 Fossil fuel. stock, et average cost................... ,145 Waterials and-supp!!as, at everage cost..... ... .. . 168.070 Prepayments....................... . ....... ........ 88.507 Vacation pay deferred. ........... .. .. .......... . 23,411 807,420 DEFERRED CHARGES:
Debt expense, being amortized......... ........ . . .. 5,938 Debt redemption-expense, bein9 amortised. . ... .. . 26,380 Wiscellaneous. . ...................... .. .. .. . 48.574 80.092
- TOTAL A'SSETS., . . . ..... . . . .......... . ............ * .. 6 457,576
's 3
-CAPITAll7AT10N AND LI ABILITIES CAPITAll2AT10N:
Common stock equity........ ....... . . . .. . . -$ 2,284,712 Preferred stock................... .. ......... . . . . . 484.400
- Preferred stock subject to mandatory redemption... . . 10 Long-term debt.......... . ...... . ..... .... . . . . 2,387,000 ,197
...'5,166.309 CURRENT LI ABILITIES:
Preferred stock due within one year. .... . . 2,500
.Long-term debt due within one year... . . . . . . 58.059 Notes payable to banks. . .. . .. ... ... .. . 222.500 Accounts payable -
Affiliated companies................,.. . ..... .. 44,944 i 0ther............................... . .. , ...... 295-Customer deposits. ........................... ...... 188,260 30,
' Taxes accrued--
Federal and state income............ .. .....,.... 37,914 0ther.............................. ............. 25,313 Interest accrued.......................... .. .. .... 70,867 Vocation pay-accrued................. . ............. 22,846 Wiscellaneous.......................... . .. ... . . . 35,407
......38,905 7
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred investment tax credits. ..... . . 375,599 Prepaid capacit net..... . . . . .. . . . 98,939 Wiscellaneous..y... revenues, 77,824 g,
.... ..552362 . ..
TOTAL CAPITALIZATION AND LIABILITIES.................. S 6.457,576 ew 'ar,, -e,+~%r-a n,..,2-c,.mv..w,eiw-y,,.e+y4%.,we.,2,.-,%,mv . , w.y w s e
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AWAMA POWER COMPANY 1990 ANNUAL REPolff y ma a
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% 2 Nabama Power Company is one of five operating companies of The Southem Company Others i bte Stockholders 3 6 are Georgia Power Company. Gulf Power Company (serving northmst Florida), Mississippi Power
- ~.Th.eterin Review
..WRnencialReport 16 Company (scrying southeast Mississippi), and Savannah Electric and Power Company (serving m ReportWMensgemert 16? Savannah, Georgia and surrounding areas). System affiliates also include Southem Company
, Repost 006 Services, Inc., which performs speciahzed services ci cost for system companies upon request; Puldc Aucourtantsi 16-g w gg, 37 -
Southem Electric Intemational, Inc., a consulting firm; The Southem Investment Group, Inc., which develops new business opportunities; Southern Electric Generating Company, which is owned in
'Mensgemsst's rum %
fand Analysis W Mb equal shares by Nabema Power and Georgia Power companies; and Southern Nuclear Operating
= dOpsetons and '
Company, Inc., which prwides services to Alabama Power Company and Georgia Power Company
' FinancialConeson 19 22 in support of the three nuclear plants within the Southam electric system.
G Slesmentofincome A copy of Form 10 K as fded with the Secuates and Exchange Commission will be wailable to 48tesments W - .I r=mpsRasin d stockholders upon wntten request to Art P. Beattie, Secretary A copy of the company's Financial
% Business
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22 l and Statistical Review is also available upon request.
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Highlights ,
1990 1989 Operating Revenues (millions) $ 2,604 $ 2,485 i Operating Expenses (millions) 5 2,054 5 1,934 l
Net income after Dividends on Preferred Stock (milkons) $ 313 $ 311 Return on Average Common Equity (percent) 14.0 14.5 Allowance for Funds Used During Construction, Net. as a Percent of Net income after Dividends on Preferred Stock 12.9 15.1 Coverage Ratios:
Mortgage Indenture (2.00x mNmum requirement for issuance) 4.54x 4.47x Charter (1.50x minimum requirement for issuance) 2.17x 2.20x Energy Sales (thousands of kilowatt hours):
Within System Service Area-Retail 38,081,901 36,789,697 Sales for Rewic 2,689,230 2,629,805 Off-system 6,798,006 6,4?5,529 Terntorial Peak Hour Demand (thousands of kilowatts)t 8,878 8,256 Total Customers (year end) 1.135,918 1,121,771 Gross Property Additions During Year (millions) $ 445 $ 459 tincludes southeastern Power Administration anotment 88 EFE i ED 1_03 n?=Luo /
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Tctal Territorial Distribution of Revenue Energy Supplied Dollar (19801990)
Bs/Isons at KWH IS flbullon Of 5 Earnings available for common dmdends (locAvdes Southeastem Power 1990 Tievenue Dollar a earnings retained in business Administratson allotment) (Ireludes allowance for funds used dunng n Interest charges and preferred stock 5.yearcompoundannualgrowth rate a 3 3'+o constructson and otherincome not of tanes) dsyndends N Federal, state and local taxes W Depreciation and arnortization W Other operation and maintenance E Fuel and purchased power (includes allowance for funds used danng construct:cn and other sncome, twt 01 taxes)
0 To the Stocibboklen i
[ l he year 1990 was one of solid growth and continued emphasis on change to improve the level of service to our customers. Important financial goals were achieved, helping our company to continue to
. , _ _ offer service at stable rates.
Our rates have increased just over six percent during the past eight years, while the Consumer Price Index has climbcd 35 percent.
Balancing the changes in our industry and matching our service to the desires of our customers while keeping costs down remain our biggest challenge and opportunity.
Employees who are the first contact with our customers have been empowered to make decisions affecting the customer's service without being encumbered by rigid procedures. We believe this effort, coupled with continued emphasis on the importance of customer service, will help us to achieve our goal of being the competitive choice of our customers.
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An indicator of the attention which is placed on efficiency and productivity in our company is the fact that our fossil generating plants during 1990 achieved a level of availability during our summer peak demand period which set a record for the history of the company.
The final unit of the James H. Miller Jr. Steam Electric Generating Plant is now complete, ending a 25-year period of continuous major power plant construction. No additional baseload capacity is anticipated until the end of the decade. However, some small combustion turbine units are planned in the middle part of this decade.
The founders of our company realized that the progress of Alabama and Alabama Power go hand in hand, and for that reason we began efforts in economic development in 1925. Last year we continued our efforts to help the state develop the infrastructure to support economic development and assisted communities to help prepare themselves for economic growth. We formed the Economic Development Partnership, Inc., to help raise capital to support economic growth in the state.
Through the Alabama Power Foundation we have been able to offer economic assistance to education in our state, a critical factor in the future of Alabama.
A new program, the Alabama Power Teacher Corps, is offering the services of about 500 of our employees who have volunteered to go into schools, grades K through 12, and teach classes on a variety of subjects.
As we continue to meet the energy needs of our customers and balance the changes taking place in our industry and the marketplace, we remain committed to customer satisfaction and efficient energy production while protecting our environment.
Our employees remain the basic strength of this company and it is through them and the support of our investors that we meet our challenges and sustain our achievements as we move into the future.
Elmer B. Harris President and Chief Executive Officer March 1,1991 '
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The Year in Review ,
l h The war 1990 saw Alabama hmcr firmly E da dedicated to customer sen ice, financially healthy, and committed to
&ftkt 4i .g adapting to present and future competition. The response of Alabama
? 4M Power in this era of change has been to balance its services, costs, work practices, pmductivity and the size of its work forte with its markets and j customer demands,
'fW'4 Driving down the cost of electricity in relation to in0ation continues to be the number one goal in order to compete in the energy marketplace. Stahic rates for our customers and financial stability for the
. company continue to be made possible through the Rate Stabilization and Equalization (Rate RSE) and Certi0cated New Plant (Rate CNP) procedure used by the Alabama Public Service Commission. The commission has jurisdiction over the company's retail electric rates. Following an examination of the procedure in 1989 by an independent management consulting firm, the commission held hearings in November and Decemtwr 1989, addressing the con-tinuation of Rate RSE and Rate CNP and, in March 1990, voted to continue the rates until at least November 199-i.
Alabama Power's wholesale rates are under the jurisdiction of the Federal Energy Regulatory Commission. Cost controls have also allowed these rates to remain stable for the past seven years
'Ib successfully mtet the challenges facing Alabama hm er in the 19903, a number of marketing changes were initiated this year. These changes include an increased emphasis on major customer segment management, commercial cooking market penetration, enhanced power quality, realtor education and a ne
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architect and engineer support These changes support the direction in y K 1 x '
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maintenance costs, coupled with generation and distribution cost controls. have helped offset the effects of inflation and have led to continued stable rates.
In the face of record summer demand for electricity, the company's nuclear hydroelectric and fossil fueled plants continued their fine operation during the year The company's fossil fueled plants achieved record availability during the summer peak demand.
A program to consistently lower heat rate in steam electric generating plants has resulted in a major improvement in efficiency. The lower the heat rate. the less coal is required to pnxluce a kilowatt hour of electricity. Reduction in heat nite from 1985 through 1990 has resulted in a 598 6 million savings in fuel costs.
In addition, the company signed long-term coal contracts in 1990 and renegotiated certain other contracts, which will result in saving several million dollars in fuel costs.
The Miller steam plant unit i was connected to the electric system in December and goes into commercial openttion in March 1991. Completion of the Miller units ends a 25 gar program of Decline in heat rate, a measure of fossil- 'o' fueled generatng plant efficiency. has saved thecompany $986milkonsince 1985 se - - -
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In )ct another cost cutting and productivity improvement effort, Alabama Power combined oper.uions where possible during 1990, a continuation of a program started in 1989 A new pay plan implemented in 1989 for a portion of employees was extended during 1990 to cos er all employees not covered by the Internationalllrotherhood of Electrical Worken' contract. A new three-year contract with the IllEW negotiated during 1989 continued in effect during 1990. That contract also contains productivity enhancements.
Alabama Power closely monitors st.ne and federal legislation in order to protect the interests of its customen and stockholders. Plans continue to be developed to address issues of concern to our customen and which could impact the cost of the company's operation. An amended Clean Air Act wanigned
. into law in November 1990. The bill is c.spected to increase the revenue requirements of the entire Southern electric system by 8 percent by the year 2000. .\ lost of the additional expenditures will be necessary to reduce emissions of sulfur dioxide and nitrogen oxide at coal fired plants.
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were held to offer assistance to encourage industrial expansion. Programs f N were developed to assist communities in preparing to attact industrial y fi , p, xilgp)'~ \, y development and commercial business. Efforts also continued during e 1990 to assist the state and local communities in attracting agribusiness and recruiting international business. Computer based power outage evaluation systems have improved response time in restoring service after power outages. A new program was developed during the year to expand computer based system control and data acquisition systems to the company's distribution network-another improvement in customer service and reliability. During the year the company continued a program to formally recognize emplo)ees for i outstanding s oluntecrism. Alabama Power employees have been recognized repeatedly for taking active roles in their communities. Employees and customers of Alabama Power continued their support for Project SilARE, an energy assistance program to help pay energy bills for qualified low income people who are elderly or disabled. Started in 1982, with 550,000 seed money from Alabama Power, Project SilARE is one of the most m Im.- = g_. _ __ _ Z E E a - m _ -_ a. - _g: 8-a I_~_-
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g;5gj w w w=e+ outstanding programs of its t} pc in the nation. For fiscal 1990 the ikMNN$j
&&m#E2 program distributed more than 51. million, assisting 14j91 families.
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t, ./ The Alabama Power Foundation. Inc., was
;v s . established in 1989 to make distributions to qualified entities which are
[I e b organized exclusively for charitable, educational, literary and scientific s N. wj h-purposes. Through 1990 the company had committed 542.5 million to the trust fund of this organization. During 1990 the foundation contributed over 51.25 million to approximately 100 organizations throughout the state of Alabama and provided leadership which helped stimulate giving by others. The challenge of providing world class service in a competitive marketplace while simultaneously driving down the relative cost of electricity is formidable, but one we are eager to undertake. We believe with the help of our employees' hard work and enthusiasm, for which we are grateful, and the continued confidence of our stockholders, we will be successful.
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1990 FinancialReport 1 REPORT OF MANAGEMENT The management of Alabama Power Company has prepared and is responsible for the financial statements and related financial information included in this report. The financial statements were prepared in accordance with generally accepted accounting pnnciples appropriate in the circum-stances, and necessarily include amounts that are based on best estimates and judgments with appropriate consideration to materiality. Financial information included elsewhere in this annual report is consistent with the financial statements. The company maintains a system of intemal accounting controls to provide reasonable assurance that assets are safeguarded and that the books and records reflect only authorized transactions of I the company. Limitations exist in any system of intemal controls based upon recognition that cost of the system should not exceed benefits derived. The company believes its system of internal account-ing controls, augmented by its intemal auditing function, appropriately balances the cost / benefit relationship. . The company's system of intemal control is evaluated on an ongoing basis by the company's qualified intemal audit staff. The company's independent public accountants also consider certain elements of the intemal control system in~ordct to determine their auditing procedures for the pur-pose of expressing an opinion on the financial statements. The Board of Directors pursues its responsibility for reported financialinformation thrnugh its Audit Committee, composed of directors who are not employees. The Audit Committee meets
, periodically with management, intemal auditors and independent public accountants to assure that they are carrying out their responsibilities and to discuss auditing, internal control and financial reporting matters. Both intemai auditors and independent public accountants periodically meet alone with the Audit Committee and have free access to the Committee at any time.
We believe that these policies and procedures provide reasonable assurance that our operations are conducted with a high standard of business conduct and that the financial statements reflect fair-ly the financial position, results of operations and cash flows of the company. REPORT OF INDEPENDENT PUBUC SCCOUNTANTS To the Board of Directors of Alabama Power Company: We have audited the accompanying balanc'e sheets and statements of capitalization of Alabama Pos Company (an Alabama corporation and wholly owned subsidiary of The Southern Company) as of December 31,1990 and 1989, and the related statements of income, earnings retained in the business, other paid-in capital and cash fl0As for each of the three years in the period ended
, December 31,1990. These financial statements are the responsibility of the Company's manage-ment. Our responsibility is to express an opininn on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those stan-dards 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, M a test basis, evidence supporting the amounts and disclosures in the financial statements. An audjt 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements (pages 22-34) referred to above present fairly, in all material respects, the financial position of Alabama Poher Company as of December 31,1990 and 1989, and the results of its operations and its cash flows for the periods stated in conformity with generally accepted accounting principles. ARTHUR ANDERSEN & CO. Birmingham, Alabama, February 15,1991 16
Selected Financial Data 1987* 1990* 1999' 1988' (Dollars in Thousands) Condensed Statements of income:
$2.604.044 $2 485 387 $2,384 314 $2 450.532 Operating Remnues Operating Expenses Operation and maintenance 1,442,151 1,343.194 1,376 012 1.446 608 Deprecation and amortizat6on . 262,817 247.973 225 123 212.072 .
Taxes other than income taxes . 163.567 154.398 148 681 141.422 federal ard state income taxes 185.954 188.507 143 614 1EQ575 Total operating expenses . 2,054.489 1.934.C72 1.893 430 1.990.677 Operating income 549,555 551.315 490.884 459 855 Other income. Net - 27,021 28.452 46 603 38.180 Income Before Interest Charges 576,576 579.767 537.487 498.035 Net Interest Charges 225.261 229.098 217.532 207.877 Dmdends on Preferred Stock . 38.512 39.523 36 480 32.919 Net income after Dmdends on Preferred Stock $ 312.803 $ 311.146 $ 283 475 $ 257 239 Cash Dividends on Common Stock $ 220,800 $ 217,300 $ 212,700 $ 201.100 Retum on Average Common Equity (Percent) 14.00 14 53 14 03 13.56 Total Assets . . 6,362,293 6.279 431 6.180 945 5 912.000 Gross Property Additions 444,680 459,199 643.892 600.589 Capitalization: Common stock equity $2,280.590 $2.188.811 $2,034.815 $1.946.74 7 Preferred stock ' 484,400 484.400 484 400 384 400 Preferred stock subiect to mandatory redemption 12,500 17.500 22.500 27.500 Long-term debt 2,397.931 2 435.129 2 496.492 2.386 258 Total Capitahzation . $5.175,421 $5125.840 $5.098 207 $4.744.905 Kilowatt-hour Sales (in Thousands). Residential 11,996,794 11.346 736 11.332 285 11.149 225 Commercal 8,201,5'4 7,915,685 7.711.092 7.476.9d Industnal 17,713,153 17.360,791 16.881.342 15 969.075 Sales for resale 2,689,230 2.629.805 2.854,703 3.007267 Other 170,420 166.485 165 122 159.422 Total terntonal sales . 40,771,131 39,419.502 38 944,544 37,761.913 Nontemtonal sales . 6,798.006 6.425 529 4.579.415 7.348.457 Total Kilowa't hour Sales 47,569.137 45 845.031 43.523 959 45.110.370 Operating Revenues: Residential $ 825,645 $ 781,982 $ 761.805 5 759.957 Commercal . 551,634 533.487 510.910 501.088 industnal . 777,580 762274 738,755 721 298 Sales for resale 106,864 98.552 108.119 118.907 Other 12,103 11.743 11255 10 968 Total temtonal remnues 2.273,826 2.188.038 2,130.844 2,112 218 Nontemtonai revenues . 203,225 271.171 231.622 319.617 Total reenues from sales of ciectnoty . 2,577,051 2.459.209 2.362.466 2.431.835 Other reanues 26.993 26,178 21 848 18.697 Total Operating Reenues $2,604,044 $2.485.387 $2.384.314 $2 450.532 1,135.918 1,121,771 1.108.334 1.090.302 Customers (End of Year) Employees (End of Year) - 9,473 9 698 10.302 10.457 Average Revenue Per Kilowatt-hour 5.42 5 36 5 43 5 39 Total Sales (Cents) . Average Cost of Fuel Per Net Kilowatt-hour Generated (including SEGCO) (Cents) 1.73 1.73 1 71 1.80 nncuws u e et rexceno twnms <Jeve, w ree ss ,ce remesna rvw vm e onnen
- 17
1986 1985 1984 1983 1982 1951 1980
$2 425 751 $2 414 219 $2105 406 $ 1.075.008 $17M 145 11 594 022 $ 1421.997 1349 167 1.370,594 1.157 405 941 966 940.26? 978 075 816.243 201 803 183 779 174.514 169 231 169 753 147 581 127840 135.248 128 Cs8 122.928 10t445 96 936 86 878 74 408 255 400 248 774 224 726 220.245 176 238 92.773 114 427 1.941.618 1.931 795 1 679 573 1.438 B87 1.3B3189 1 305 307 1 132 998 484.133 482 424 425 833 436 721 380 956 288 715 288 9'J9 38.291 47.888 57.563 44.339 28 571 46 927 42 715 522 424 530.312 483 396 481 060 409.527 335 642 331.7 t o 214.943 224 4N 208.103 214 113 210.612 199 762 170 997 34 025 41 346 42 041 37 936 36 658 36 071 31.013
$ 273 456 $ 2f,4 562 5 233 252 5 229.011 $ 162.257 $ 99 809 $ 129 704 5 191.300 $ 185 700 $ 161.900 $ 145 200 $ 130 700 $ 120 800 $ 115.300 15.12 15 41 14 74 16 12 12 62 8 17 11 61 5.570.653 5.722.263 5 496.197 5.120 607 4 683.358 4 449.126 4.244 932 553 767 568 073 575 173 _522 140 459 437 437.587 411 813
$ 1.847.608 $1,770156 $1 M4 295 $ 1.499 909 $1.340 890 $1.231 E t $1211417 384 400 384 400 424 400 424.400 374 400 374 400 334 400 30 000 35 000 37,224 38 034 42.234 43 789 47.500 2.210 108 2 349 373 2.402.713 2.404 565 2.370 050 2 394 674 2 159 793
$4 472.116 , $4.538 929 $4 528 632 51 366 908 $4127.574 $4 043 924 33.753.110 10 606 698 9 814 814 9.634.285 9.176 413 9 153 173 9 229 255 9.510 609 7.015.589 6.593 645 6,270.899 5 816 678 5.715 630 5.586 900 5 514.844 15.025.806 15.215.276 15.134.188 13 688.096 13 460 193 14 651.012 14 499 375 3,007,753 2,726.083 2,600.692 2.496 899 2 408 904 2.402.331 2.518.347 153.282 146.119 143 785 138 901 134 811 131 117 127.58?
35.809.128 34 495 937 33.783.849 31,316 987 30 872.711 32.000,705 32.170 757 5.967.275 9.167.033 5 266 477 2.905.585 3.066 423 1.763 650 1.346 g 4.1.776 403 43 662 970 39.0$0 326 34 222.572 33.939 134 33 769.355 33 517.669
$ 738 864 $ 684 970 $ 664 286 $ 629 478 5 578.291 5 518 730 $ 489 031 481,676 453.651 430.400 398.827 371.581 325 388 293 576 705 395 717.078 692.177 631 440 600.219 584 030 507.784 124 412 119.025 109.030 97.731
. 99 014 89.727 77.627 10.811 10.129 9615 8 914 8.036 7.644 6 706 2.061,158 1.984.853 1.905.508 766.390 1.657.141 1.525 519 1.374.724 345.614 411.571 186.518 92 373 90 331 56 013 37.304 2 406.772 2.396 424 2 092.026 1.858 763 1.747.472 1,581.532 1.412 028 18.979 17 795 13.380 16845 16.673 12 GO 9 969
$2 425.751 $2 414.219 $2105 406 $ 1.875.608 , $1.764.145 $1.594 022 $1421997 1.070.760 1.050.795 1,034 026 1.015.203 1.001.833 996.200 986.082 10,367 10.212 10.144 9.917 9 663 9 661 9.573 5 76 5 49 5 36 5 43 5 15 4 68 4 21 o
1.83 1.90 1.86 1 74 1 80 1 84 1 61 18
Management's Discussion and The worage revenue por kilowatt-hour of total sales was 542e in 19m 536e in 1989 and 543e in 1988 Tne increase l Analysis of Results of in 1990 was pnmanly due to an increase in ncntemtonal Operations and Financ.ial Condition capauty caies resuiting from new contracts The decrease in 1989 was the result of an increase in nontorntonal energy RESULTS OF OPERATIONS sales whIch are sold at a rate generally lower than tnat for The compan/s not income after dividends on preferred temtonal sales stock was $313 muon in 1990. $311 muon in 1989. and
$283 milkon in 198& The increase in net income in 1990 o*' Operating Expenses 1989 is pnmanly attnbutable to continued groMh in ah major lotal operating expenses for 1990 increased 6.2 percent customer categonos including sales to neighbonng utihties from 1989 pnmanly as a result of increased operation The return on average common equity for 1990 was 140 -
expenses asscaated with an increase in fossd generation
. percent compared to 14.5 percent in 1989. and 140 percent due to higher demand for energy Fuel costs are the single in 1988 The decrease in 1990 as compared to 1989 is the largest expense for the company The mix of fuel sources for result of an increase in common stock equity investment generation of electncity is determinod pnmanly by system primanly attnbutable to camings retained in the business load, the Unit Cost of fuel consumed, and the avaiiabity of hydro and nuclear generating units Fuel expense Jased Revenues $44 mdhon in 1990 as a result of an increase in ft w Tota! re enues in 1990 increased from 1989 pnmanly as generation, of tset somewhat by a decrease in nuclear fuel result of an increase in sates to.terntonal customers Torntonal ex ense Fuel cost per kilowatt-hout generated, including the reanues increased $86 milhon or 39 percent in 1990 company's portion of Southem Electnc Generating pnmanly as a result of an increase in kilowatt-hour sales of 34 Company, was 1.73e in 1990 and 1989, and 1.71e in 1988.
percent Purchased and interchanged power expenses increased $11 Nonternlonal revenues increased $32 muon or 11.8 milkon in 1990 pomanly due to a 197 percent decrease in percent in 1990 over 1989 as a result of increases in capacity hydro generation. Other operation expenses increased and energy sa es of $25 milhon and $7 muon, respectively because of certain charges related to employee and Remnues from sales to off system utihties ccrisist of capacity retirement behehts Maintenance expenses for 1990 and energy components Capacity remnues reflect the increased 63 oercent from 1989 onmanly due to scheduled recoary of fmed costs and a retum on investment under the maintenance outages on certain fossil fuel generation units contracts Energy is sold at its vanable cost Nonte,rntonal and storm related damages to aistribution facihties energy sales inc eased by 53 percent and capacity Depreciahon expense increased each year pnncipally due revenues increased 180 percent from 1989 to continued growth in depreciable plant in service The The increase in energy sales &nd capacity revenues was composite straight kne depreciaSon rate was 35 percent in due to new contracts, both long-term and short-term, with 1990,1989 and 1988. Flonda Power Corporahon and the City of Tailahassee Taxes other than income taxes increased each year Capacity sales also increased to Flonda Poer and Light because of higher revenue-retated taxes as well as growth in ' Company and Jacksonville Electnc Authonty due t property taxes The increase in income tax expense in 1989 was pnm n!y due to the increase in taxabie income e e ergy r pacity sales to Gulf States Utiht,es Company (Gulf States)in 1990 or 1989. a!though such sa!es amounted to $25 muon in 1988 and $59 milkon Allowance for Funds used During Construction in 1987. In late 1986, Gulf States discontinued most payments (AFUDC) due under purchase pomr contracts Effective July 1,1988. AFUDC is the estimated debt and equity Costs of capital the company and its operating afhhates suspended all funds that are necessary to hnance the construction of new transactions called for by the agreements because of Gulf fac kties. While cash is not reahzed currently from such States' refusal to pay in 1990, the company and its operating allowance, it is reahzed over the service hfe of the plant affikates entered into a settlement agreement with Gulf States through increased revenues resulting from a higher rate base related to these poAer sales contracts. For additional and higher depreciation expense The composite rate used information, see Note II, "Nonterntonal Revenues," to the to determine the amount of allouance. net of deferred hnancial statements. income tax was 93 porcent in 1990,96 percent in 1989, and The increase in remnues in 1989 from 1988 was attnb- 95 percent in 198a For construmon projncts begun after utable to an increase in sales to nontemtonal customers and 1986. deferral of taxes related to capitahzed interest is no higher retail rates throughout the year Terntoria! remnues longer permitted. For those protects. the composite rate used increased $57 muon or 2.7 percent in 1989 pnmanly as a to determine the amount of allowance was 113 percent in result of an inciease in kilowatt hour sales of 12 percent and 1990. AFUDC, net of income tax, as a percent of net income increases in retail rates e'fective in late 1988 and early 1989 auer d!v:dends on preferred stock was 12.9 percent in 1990. under Rate RSE, which provides for penodic retail rate 15.1 percent in 1989 and 20.9 percent in 1988 The ratios adjustments based upon the company's earned retum on ham dropped substantially since 1988 because of a decrease end-of-penod retail common equity. in construction workin progress 19
l l Interest Charges and Dividends on Preferred Stock of the intema' Rownue servee and Secunbes and l Interest on long term debt in 1990 oecreased from 1989 E(change Commisuon invest gabons avd suits for anegeo by $85 muon and dmdends on pretened stock decreased wo!abons at the federal R acheteer Inhuenced and Cetrupt by $1 muon These decreases were pomanly the result of Organeabcos tct a civo suit mtated to f.nanang the redemption and retirement of long term debt and agreemcats and aibcabon proceeings reiabng to miners preferred stock The reduction in secunbes outstand ng hea'th care benefs inc!uded the redemption of $205 m6on of fast mortgage Future earnings wm a%o oepend upon growth in elecinc bonds (1268 percent senes) in January 1990 in sat 1sfactton sales whch a e subject to a number of factars lhese factors of the annual fJst mortgage bond impromment fund requae. include changes in contracts wtn neighbonng uMbes. ment in add. bon, the company reacquired f.rst mortgage energy Conservabon pract.ced by Customers the elashCity of bonds of $5 mAon (10 7/8 percent senes) and $06 muon demand weather, deregdabon Compet bon and open (10S8 percent senes) dunng January 1993 Also $69 moon transmission access. and the rate of econom c growth in the of first mortgage bonds (5 percent senes) matured in Apn! company s service area Also cous assocad wtn 1990 in January.1990. $2 5 m@on of preferred stock (11 comphance of the Clean Att Act Amendments of 1990 could percent senes) was redeemed to Sabsfy the 1990 pre'ened reduce earnings if such costs cannot be bMed to customers stock snking fund requirement The company a!so c(erosed The Finanoat Accounbng Standeds Board (F/68) issued its optron to redeem an add,tiona! $2.5 mAon of preferred ren rules in 1987 for account:ng for income tates (Statement stock (11 percent senes) No. 96) cunent!y scheduied to be eMectue in 1992 The accountng for and the impact on not income reiated to these new rules, which are expected to be adopted on a prospect ve Alabama Power Foundation, Inc. bass wai depend greaty on future rate-making treatment Late in 1989, tne company estabhshed the Alabama Power Ho^ewr, the FASB has tentab e4 deoded to supersedo Foundation. Inc (Foundabon) to make distnoutions to quahhed Statement No 96 For add.tionalinformabon on FASB ent. ties which are organried exclusvely for chantable. Statement No. % see Note 1 to the finanaal statements educatonal hterary and scentific purposes The company under ' Incomo Taves committed $17.5 mAon in 1990 and $25 meon in 1989 to The FASB has also isNed new rules on account:ng for the Foundabon These amounts are reflOcted on the hea'th Care and i,fe insurance benehts for rebred ernpiovees "Chantable foundabon" hne of the Statements of income (Statement No 106) whch must be adopted by 1993 The ru'es wm requae that the cost of such benehts be accounted for on an accrua! basis using a specIf:ed singie actuanal Effects of inflation memd Tne rules. whch the company 09ects to adopt in The company is subject to rate regulabon and income tax 1993 on a prospective basis, are emected to result in higher la As that are based on the recovery of histoncal costs costs being recogneed related to these benehts, althougn Therefore. inf!abon creates an economic loss because the the amount of this increase is not currenUy known For company is recovenng its costs of investments in dollars that addmona!informabon on FASB Statement No 106, see Note have less purchasing power Wh,le the inf!ation rate has been i to tne f;nanaa: statements under Retuement Pians" relabvely low in recent years. It contnues to ham an adverse effect on the company because of the large investment in lorgbwd utihty plant Convenbonal accounbng for histonca! cost does not recognee tnis econome loss nor the part.any offsetting gain tnat anses through I:nancing faolMes with FINANCIAL CONDITION fmed-money obhgabons. such as long-term debt and Liquidity and Capital Resources preferred stock. Any recognibon of int abon by regulatory The company has regulatory approva! and borromng authont es is reflected in the rate of return allowed resources for short-term borroungs up to $330 maon At the end of 1990. the company had outstanding short term borrow Future Earnings Potential ings of $395 mAon Dunng 1990, $205 mAon o rfast The resu!!s of operabons d;scussed above are not mortgage bonds were redeemed. $56 muon were reac-necessanly ind cabve of future earnings potent.a! The leml of quaed and $69 mAon matured , future earnings depends on numerous factors ranging from Common equity as a percent of tota! captahabon was regulatory ma'ters to growth in energy saies 441 percent at year end 1MK) Seconty rat ngs by au mapr Eamings in the future wdl be aMected by complebon of an rabng agerces rema:n in tne "A" category agreement wah Gu!f States to some d sputed unit poner and The capea! expend:ture program requaed the outiay of other long-term power s60s contracts and to settle pending $1.5 b&on dunng the three years 1938 through 1990 The htigabon conceming tnis maner. For add:tiona!informabon, pnmary sources of funds foc capta' e(pend.tures are internat see Note 11. "Nontemtona: Resenues." to the financat sources long-term debt. sales of preferred stock and cap ta! statements contnbutons from The Southem Company See Note 2, " Regulatory Maters and Lit:gahon " to the Caoda! emend 6tures are eshmated to total $12 buon for financal statements. for further d:scusson of regulatory the three years 1991 through 1993 including $42 mean of uncertainter and legal proceedings re:ated to the resolu$on AFUDC Tne mapr components of future capca' expena-
tures are projects for iroprovements of the existing fossil, 1995 and increase revenue requirements by apprommately hydro and nuclear generabr)g plants, distnbution and 1 percent transmisson related facihties, and new busness Phase 11 comphance costs are expected to be much The capita! budget is subject to penodic review and higher because a!! fossifired generahng plants are affected revision and ca;mtal costs incurred and commercal operaton The Southern Company's Phase ll comphance plan dates may vary from estimates because of severa! factors. antiopates greater use of low-sulfur coal and the installation includ1ng new cost estimates. revised load estimates, of scrubbers on several piants Projected construction changes in environmental requtrements, and the cost of expenditures could total as mucn as $3 bdhon. and revenue capital In add:t,on to the funds required for the capital requirements could increase up to an add ltional 7 percent budget, approximately $73 mi l hon will be required through dunng the penod 1995-2000 However, the fullimpact of the end of 1993 in connection witn present snking fund Phase il compliance cannot now be determined with requirements and matunties of senior secunties and pollutan certainty pending the formabon and maturation of a market control bonds for emission alicwances and the dewlopment of new As a result of new requirements by the Nuclear Regulatory emsson reduction technolog es. Commssion and as ordered by the Alabama Pubhc Service Because of the numerous uncertaintes discussed earher, Commsson, the company has estabhshed external trust including those relating to any systemede comphance funds for the purpose of funding nuclear decommissioning strategy. the financialimpact of the Clean Air /et on Alabama costs. Beginning in 1991, the company wdl fund $16 milhon Power cannot be reasonably determined at this time. annually For additionalinformation conceming nuclear However. the resulting increases in Alabama Power s revenue decommissoning costs, see Note 1 to the financia! requirements and construction expend:tures are currently statements under " Depreciation and Nuclear Decommis- expected to represent an approximately proportionate share soning" of the system totals estimated above. There can be no it is anticipated that the funds required will be denved from assurance that comphance costs wdl be recowred through sources in form and quantity smdar to those used in the corresponding increasesin rates past. In oroer to issue additional first mortgage bonds and Another provision of the Clean Air /et requires a threegear preferred stock, the company must comply with certain study by the Enwonmental Protection Agency (EPA) of earnings cwerage requirements contained in its mortgage power plant em!ssions of a:r toxics The study wdl serve as indenture and corporate charter. The bond cowrage was the bass for a decison on whether additional controls of the 454 and the preferred stock coverage was 2.17 for tne year substances are warranted Comphance uth any new ended December 31,1990 The minimum cowrage ratios standard could resu!!in sgnificant additional costs The under the mortgage indenture and the corporate charter for impact of a new standard, if any, wMI depend on the the issuance of additional first mortgage bonds and development and implementation of apphcable regulations. preferred stock are 2.0 and 1.5, respectively in addition. future legslation amending the Resource in Nommber 1990, the Clean Air Act Amendments of 1990 Conservation and Recwery /ct, as we!! as previous (Clean Air /ct) were sgned into law, and the acid rain comph- amendments to this act, the Comprehense Enwonmental ance provison of the new law wdl have a sgnificant impact Response. Compensation, and Liabikty Act, and the on the Southern electnc system Speofic reductions in su! fur Emergency Planning and Community Right to Know /et dioxide and nitrogen oxide emissons from fossil-fired could affect many areas 6f the Southern electnc system's generating plants will be required in two phases. Phase I operations, including the generation, transmisson, and comphance must be implemented by January 1,1995. and distnbution of electncity The fullimpact of these a'fects eight generating plants, representing 10,000 megawa*ts requirements cannot be determined at this time, pending of capacity or 35 percent of total capacity, in the Southern the development and implementation of apphcable electnc system. Phase il comphance is required by January regulations 1,2000, and all fossi-fired generating plants in the Southern in 1988, the EPA scheited pubhc comment on the need for electnc system w'!I be affected a new short term ambient air Quakty standard for sulfur To reduce the financial impact of the Cican Air /Cl on the dioxide Dunng 1991, the EPA is expected to make a final individual operatng compan;es, the Southern electnc system deoson on whether to promulgate this standard. The impact' is developing a possible systemwde comphance strategy of any ncw standard wdl depend upon the twel chosen for Howewr, this strategy mrght be sgnificantly aMected by final the standard and canrat be determined at this time Clean Air Act regulatons in 1985, the EPA promulgated air quahty control regulations The Southern Company currently expects tnat Phase I related to stack height requirements of the Clean Air /et The comphance at the eight a'fected plants could be achieved by U S. Court of Appeals for the Distnct of Columbia Circuit issued switching to low su! fur coal. althougn this may require some a deason in htigaton conceming the EPA's stack height rules equipment upgrades Additional construction expenditures in January 1988 The deosion, which the U S. Supreme Court would be required to control nitrogen oxide emissons and to has dechned to review. remands the ma+ter to the EPA for instali conbnuous emissons monitonng equipment. Compir reconsderation of certain of the stack height rules At this time. ance costs under this Phase I approach could require the impact of the court's deoson on fina! rules and the ultimate ConstruC!ron expend:tures of up to $400 mdbon poor to impact on the system companies cannot be determined
?1
l l Statements Of Income for the Years Ended December 31,1990,1989 and 1958 1990 1989 1988 (In Thousanda) OPERATING REVENUES (Notes 1. 2,11 and 15) . $2,604,044 $2,485.387 $2 384 314 OPERATING EXPENSES Operation-Fuet . 756,501 712.453 676.423 Purchased and interchanged poet. net 59,787 47 572 101 485 Other 411,559 380 536 400.879 Maintenance , 215,304 202.633 197.225 Deprecation and amorteation 262,817 247.973 225.123 Taxes other tnan incorne taxes 163,567 154 398 148.681 Federal and state income taxes (Note 5) 185,954 188.507 143 614 Total operating expenses 2.054,489 1.934 072 1.893 430 OPERATING INCOME 549,555 551,315 400.884 . OTHER INCOME (EXPENSE) , Allowance for equ'ty funds used dunng construct:on (Note 1) 25,487 29 515 39 047 income from subscary (Note 9) . 4,182 3,750 3.302 Chantable foundation . (17,500) (25 000) - Other, net 14.852 20,187 4 254 INCOME BEFORE INTEREST CHARGES 576,576 579.767 537.487 INTEREST CHARGES Interest on long tenn debt . 221,527 230.046 225.522 Allo,vance for debt funds used during constructron (Note 1) (23,339) .(27 627) (31.830) Amortzation of debt dscount. prema;m and expense net 3,706 4.469 4 411 Other interest charges 23.367 22 210 19 429 Net interest charges 225,261 229 098 217.532 N'ET INCOME 351,315 350.669 319.955 DMDENDs ON PREFERRED STOCK . 38.512 39.523 36.480 NET INCOME AFTER DMDENDs ON PREFERRED STOCK $ 312,803 $ 311.146 5 283475 Statements Of Earnings Retained in The Business ' for the Years Ended December 31,1990,1989 and 1988 1990 1989 1988 (in Thousands) Balance, beginning of penod . $ 659,347 $ 565.351 $ 496.783 Add (dcduct) Net income aner dedends on preferred stock . 312,803 311,146 283.475 Cash ovidends pad on common stock (220,800) (217.300) (212.700) Preferred stock issuance expense (Note 8) (15) (24) (1 033) Auction preferred stock dvidend adjustment (Note 8) . (209) 174 (174) Balanca end of penud (Note 12) $ 751,126 $ 659 347 $ 565 351 Statements Of Other Paid-in Capital for the Years Ended December 31,19901989 and 1988 1990 1989 1988 (In Thousands) Ba'ance txynning of ponod . $1.304,645 $1.304 645 $ 1.225.145 Cash contntxAon to capd by parent company - - 79 500 Balance end of pened $1,304,645 $1.304.645 $1,304 645 The accompanying notes are an integral part of these statements 22
Statements Of Cash Flows ' for the Years Ended Decemte 31,1990.1989 and 1988 1990 1989 1988 (in Thousands) OPERATING ACTIVITIES. Net income $351,315 $350 669 $319.955 Adjustments to reconcde net income to net cash proeded ty operabng actet:es Deprecation and amortcation 331,858 322 042 296.234 Deferred income taxes net 64.480 31.715 37.952
. Deterred investment tax creets, net 132 6 917 15.019 Anowance for eautty funds uc.ed during construction (25,437) (29.515) (39 047)
Otner, net 19.899 (5297) t 6.106 Change in certain current assets and liatetes. Recemaues 16,818 (10.538) . (11,405)
. Pramon for uncol!ectible accounts (4,813) 102 20.227 Prepayments 915 2,793 (16 079)
Inventores (40,901) 20.408 (23.182) Payades . 6,597 16.259 (12,957) Interest accrued (106) (248) 685 Taxes accrued . (6,167) 1,547 (7.754) Energy cost recomry, retail (42.535) 39,164 - Other , 13,335 26 156 (3 264) Net casn prov ded from operating actmties 685.340 772.174 592.490 INVESTING ACTIVITIES Gross property adotions (444,680) (459,199) (643.892) Alicmate for equity funds used dunng construction 25,487 29.515 39 047 Deferred income tax effect of debt por*on of allowance for funds used dunng constructon . (6.357) (10,00 (11.527) Other : (12,195) (15 742) (4 359) Net cash used for irwst:ng actmties . (437,745) (455 431) (620.731) FINANCING ACTIVITIES AND CAPITAL CONTRIBUTIONS Proceeds-First mortgage bonds - - 150.000 Preferred stock . - - 100,000 Poliution control bonds . - 53.700 - Other long-term debt .
' 54,831 55.176 62,515 Capital contnbutions trom parent company - -
79.500 Notes payade, net 59;500 30.000 - Add Bond dscount and debt expenses net 208 350 (3.340) Preferred stock issuance expenses (15) (24) ' (2.03') Redempt:cos First mortgage bonds - (33,122) (75.650) (42.445) Preferred stock . (5,000) (5.000' (2,500) Pollution control bonds . (250) (53.950) - Other long term debt (56,895) (57.316) (56.748) Notes payade, net - - (15.000) Ada Gains (losses) on reacquired debt, net . (486) (4.902) .(208) Cash used for payment of preferred stock dmdends . (38,245) (40.105) (35.362) Casn used for payment of common stxk dmdends (220.800) (217.300) (212.700) Net cash prouded from (used for) f:nanong actmties and captal contnbutions . (240,274) (315.021) 21.679 NET INCREASE (DECREASE)IN CASH AND
~ TEMPORARY OASH INVESTMENT 3 7,321 1.722 (6,562)
CASH AND TEMPORARY CASH INVESTMENTS AT BEG!NNING OF PERIOD 3239 1.517 8.079 CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $ 10,560 $ 3.239 $ 1,517 Supplemental cash ficm informaton Casn paid dunng tne year for-Interest (net of amount captalad) . $ 216,109 5 222.815 $ 212,803 Income taxes 143,965 122.812- 64 660 The accompanying notes are an integral part of these statements 23
9 Balance Sheets at Docomte 31,1990 and 1989
' 1990 1989 Assets (in Thousands)
UTILITY PLANT (Notes 1, a 10 and 14) Plant in service, at orgnal cost . $8,487,159 58 260 889 Less--Accumulated proo9on for depreciaton . 2,684.818 2 465 931 5,802,341 5 794,988 Nuclear tud at amortizM cost . 143,711 147.9D7 Constructon work in progress 654,129 557 221 6.600,181 6 500 206 Less--Property-related accumulated deferred income taxes (Note 1) 1,106.664 1 051 877 5.493.517 5 448 329 OTHER PROPERTY AND INVESTMENTS Southern Electnc Generating Compary at equity (Note 9) 29,758 25.576 Nonutikty property not . 4,992 3.914 Mecetaneous . 5.854 5 220 40.604 34 710 CURRENT ASSETS Cash (Noto 4) 10,560 3239 Receivables-Customer accounts receivade .,. . 252 266 262.058 Otner accounts and notes receivabe (Note 11) 98.080 98.225 Affikated companies . . . 44,024 69.766 Accumulated proesion for uncoliccido accounts (Note 11) . (74,980) (74 942) Refundabe income taxes (Note 5) 27,083 - Fossil fuel stock. at amrage cost . 144,960 131,942 Matena!s and supphes. at amrage cost . 167.209 139.326 Prepayments . . 50.364 54.613 Vacaton pay deterred (Note 1) 22.845- 22 021
. 742,411 706 248 DEFERRED CHARGES .
Debt expense, being amort:ze<J 6,083 6.491 Debt redemption ex. pense. being amort;2ed 26,504 28.778 Miscellaneous . 53,174 54 875 85.761 93.144 Total Assets 56.362.293 $6 279 431 Capitalizaton and Liabiht,es CAPITAllZATION (See accompanying statements) Common stock equity (Note 12) . 52,280.590 $2.188.811 Preferred stock . 484,400 484,400 Preferred stock subi ect to mandatory redemption (Note 8) - 12.500 17.500 Long term debt . 2,397,931 2.435.129
, 5.175.421 5I25840 CURRENT LIAB!LITIES Preferred stock due or to be redeemed wthin one year (Note 8) 5.000 5.000 Long term debt due or to be redeemed utnin one year (Note 7) 83,989 81,031 89,500 30,000
~
Notes parabie to Danks (Note 4) . Accounts payable-Affaated companies . 54,566 52.019 Other 217,210 215.626 Customer deposits Taxes accrued-29,571 28.450 $+'N Federal and state income (Note 5) . 8285 14.905 i Otner 12,380 11 927 Interest accrued . 49,820 49 926 22,845
~
Vacation pa/ accrued (Note 1) 22.021 Energy cost reco,ery retal . - 39 164 Miscellaneous . 64,547 51.858 637,713 601.927 DEFERRED CREDITS AND OTHER LIABluTIES. Accumulated deferred irrastment tax credits (Note 5) 379,990 399 097 Prepaid capacity remnues. net (Note 15) 99,835 102.346 MsceCaneous . 69,334 50 221 549,159 551 664 COMMITMENTS AND CONTINGENT MATTERS (Notes 2,3. 9,10.11.13. and 15) Total Capitanzaton and Liabiktes . $6.362,293 $6 279 431 The accompangng notes are an integral part of these sta!ements 24
Statements Of Capitalization at Decemte 31.1990 and 1989 Percent of Amount Total 1990 1989 1990 1989 (In Thousands) COMMON STOCK EOUlTY Common stxk. par value $40 fu snare, autnonzed 6000000 snares. outstandng 5608.955 shares 5 ?24,358 5 224 358 Othei pad in captal 1,304,645 1 304 645 Premum on preferred stock . 461 461 Earnirgs retamd in the busness (Note 12) . 751,126 _ 6 M 347 Tota! 2,280,590 2.188 811 44.1 % 42.7 % CUMULATIVE PREFERRED' STOCK (Note 3) 51 pa' vdue autnanzed 27500.000 shares, outstandry 4.500000 shares-
$25 stated captal-Aapstable rate- 864% at December 31 1990 (Note 8) . 50,000 50 030 Adjustable rate-736% at Deember 31.1990 (Note 8) 50,000 50.000
$100 stated cantat-Auction-6857% at December 3i 1990 (Note B) 50,000 50.000
$100 par vade. autnonzed 3.850.000 snam outstandng 3.519,000 shares-Senes 4.20% to 4 52% . 41,400 41.400 4 60% to 4 92% . 29,000 29.000 5 90% to 8 04% 32,000 32.000 816% to 9 44% . 232.000 232.000 Total (annual dvidend requnement -$36427,700) 484.400 484.400 9.4 95 Subtect to mandatory redemption (Noto 8) 1100% (annuat evidend requirement-
$1.025.000) 17,500 22.500 t.ess amount due or to be redeemed utnin one year .. 5.000 5.000 Total edudng amount due or to be redeemed wthin one year . 12,500 17.500 0.2 0.3 LONGTERM DEBT (Note 3)
Rrst mortgage bonds-Matunty interest Rates Apnl 1.1990 5% - 6 957 March 1,1991 4%%. 13,000 13,000 June 1,1992 4%%. 14.360 14.360 May 1.1993 4%%. 13,818 13.818 May 1,1994 4%% , 24,105 24.105 Septcmber 1,1995 4%%. 33,284 33.284 1996 througn 2000 6%% to 9% . 162.298 162,298 2001 tnrougn 2005 7%% to 10't% 678,460 683.500 2006 through 2039 8%% to 9%% 475,000 475 000 2010 - 12%% . 15,558 36.073 2016 9%% 125,000 125.000 2017 10%% . 169,640 170,250 2018 10% 150,000 150.')00 Total test mortgage bonds . 1,874,523 1,907.t>4 5 Otner long term debt (Note 6) . 625,182 627,496 Unamortzed debt p% mum (dsount) net (17,785) (18.981) Total bog-term Gebt (annual interest requnement-$221.858.000) . 2,481,920 2.516.160 l>ss amount due or to be redeemed wtnn one yeaf (Note 7) 83.989 81.031 . Long term debt. edudng amount due or to be redeened winin one year 2,397,931 2.435 129 46.3 47.5 TOTAL CAPiTAUZATION $5,175.421 $M25 840 100.0 % 100 0 % The accompany ry notes are an interyal part of tnese statements 25
Notes To Financial Statements of Energy wtuch proades for permanent dispos 4 tion of spent nuciear fuel. which is schedu'ed to beg:n in 1998. however the actual year Inis service wdl beo:n is uncerta n Sutsc,ent
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING storage capac,ty currentiy is avanaue to permit norma: peratm into 2010 and 2014 at Plant Fariey units 1 and 2. POLICIES: msp ctemy General-The company is a wholly owned subsid.ary of The Southern Company (Southern) which is the parent company Utility Plant-of fim operahng companies. Southern Company Services. Utety plant is stred at ongena! cost Such cost includes Inc. (SCS) Southem Electnc Internabonal. Inc (SEI). The appropnate administratre und general cost. payroll rebted Southem Inwstment Group. loc. (SIG) and Southem Nuclear cost euch as pensons, taxes and other beneMS, and the Operating Company (Soutnern Nuclear). The operating a!!cwance for funds used dunng construction The cost of companies provide ciectric service in four Southeastern ma;ntenance. repa.rs and replacernent of minor items of pro-states Contracts among the companies covenng intercon. perty is charged to ma:ntenance expense The cost of nection arrangements. interchange of electnc pcuer. and rep!acements of property (excluswe of minor items of joint ownership of generating facihties, are regulated by the property)is charged to ubhty plant Federa! Energy Regulatory Commisson (FERC) or the Secunties and Exchange Commission (SEC) SCS prcmdes, Allowance for Funds Used During Construction at cost, spectahzed services upon request to Southern and to (AFUDC)- each of the subsdiary companies SEl c'es gns constructs- This adowance is the est mated debt and equity cost of owns and operates cogeneraton and independent power cap +tal funds that are necessary to hnance the construction production facihties in the United States SEl also provides a of new faciht es Whde cash is not reahzed current!y from such broad range of technical services to industnal companies a'icwance. It is rephzed omt the service hfe of the plant and utshties in both domestic and internatonal markets SIG through incrad menues resulbng from a higher rate base researches and develops new business opportunities and higher depreciaton expensa The composte rate used Southem Nuclear began preading services to tne Southern to determine the amount of ahowance, not of oeferred in-electnc system's nuclear power plants in January 1991. come tax. was 93 percent in 1990. 96 percent in 1989 and Southern is registered as a holding company under the 95 percent in 1988 For construction projects begun a'ter Pubhc Utihty Hold,ng Company Act of 1935 (Holding Com- 1986 deferral of taxes related to capitahzed interest is no pany Act), ar'd it and its subsadianes are subject to the longer permittea For those projects. tne composite rate used regulatory provisions of the Holding Company Act The com- to determine the amount of ahowance was 11.3 percent in pany !s also regu!ated by the FERC and the Alabama Pubhc 1990 The deferred income taxes related to capitahzed debt Senace Commission (APSC) and folicws generany accepted cost was $6.357,000. $10.005.000 and $11.527,000 in 1990, accounting ponciples and comphes with the accounting 1989 and 1988. respectively AFUDC, net of income tax, as a pohcies and practices presenbed by the respectiw percent of net income a'ter dMdends on preferred stock commissions amounted to 12.9 percent in 1990.15:1 percent in 1989 and 209 percent in 1988 Revenues-Prior to February 1987, revenue from the sale of electnoty Depreciation and Nuclear Decommissioning-in the companfs retail junsdicton was included :n revenues Deprecaton of the ongtnal cost of depreciabie utlhiy plant as bdied to customers on a cycle b@ng bass Beginning in in service is provided pnmanly by using composte straight-February 1987, the estimated rewnue for service rendered hne rates which approximated 35 percent in 1990,1989 and but not yet bibed to retad customers is being accrued and 1988 When property subject to deprecaton is ret; red or included in revenues. The cumulative accrued amount of otherw;se disposed of in the norma! course of busness, its
$49446.000 as of February 1,1987, was amortzed owr the ether with the cost of removat less sevage - is ensu+ng eighteen-month period Such amort zaton cost charged - tog'o t tne accumulated provison for deprecation.
amounted to $19.229.000 in 1988 Mnor cems of property induded in the onginal cost of the plant are ret; red when the related property unit is retired Fuel Costs- Depreciaton expense inddes an amount for the Fuel costs are expensed as the f uel is consumed The expected cost of decorr ang nuclear iaohties in 1988. company recovers fuel cost and net purchased energy cost the Nuclear Regulatory C . aon (NRC) adopted regu!a-through fuel cost recovery mechanisms which provide for tions requinng all hcensees operatng commercal power adjustments as necessary to reflect increases or decreases reactors to submit a report by July 1990 that sets forth a plan in such costs for providing wth reasonable assurance minimum funds for Fuel expense includes the amortzaton of the cost of decommissoning The company /s fund ng plan to comply nuclear fuel and a charge based on nuclear generatron. for wth the NRC's regulatons incorporates tne estabhshment of the permanent disposal of spent nudear fuel Total charges external trust funds The NRC s minimum extema: funding for nudear fuel included in fuel expense amounted to requirements are based on a genenc estmate of the cost to
$72,252.000 in 1990. $75.024.000 in 1989 and $90.671,000 in decommisson the radioactive portions of a nudear unit 1988 The company has a contract wth the U S. Department based on the sze and type of reactor i
26
Dunng 1990, the company based its Plant Farley decom- The components of not penson cost are shown belg,v: missoning cost on a 1985 study - in 1985 dollars - of
$250 milhon. In January 1991, the estimate of nuclear 1990 1989_ 1CJ88 i
decomrnissoning cost was increased to approximately $380 (In Thousands) milhon - in 1989 dollars - based on the results of a 1990 Benehts earned dunng ste-spec:fic study. In December 1990, the APSC ordered the the year . $ 22.038 $ 19.605 $ 23,952 recovery of nuclear decommissoning cost based on Interest cost on projected externally funding all such costs beginning in 1991- benefit obhgation . 44,415 41,195 39.194 Actual return on plan assets . (1,712).(154,473) (78.023) Net amortization and Retirement Plans- deferra! (63,021) 94.596 25.300
, The company hs a dehned benefit, trusteed, non- Not pension cost $ 1,720 $ 923 $ 10.423 contnbutory penson plan which covers substantially all _
regular cmployees. Benefits are based on the greater of amounts resulting from two different formulas: years of ser, vice and hnal awrage pay. or years of service and a flat dollar beneht. The pohcy of the company is to use the " entry age normal method with a frozen initial habihty" actuana! method for funding purposes, subject to hmitations under Of the penson cost recorded, $1,298.000 in 1990, federal income tax regulations. The company uses the " pro-
$228,000 in 1989 and $4.506.000 in 1988 were charged to lected unit credit" actuanal method for financial reporting purposes as is required under Financial Accounting Stan. operating expenses, and the balance was charged to con-struction and other accounts Also, for the penod 1988 dards Board (FASB) Statement No. 87, " Employers' Accoun.
. ting for Pensons". The funded status of the plan at through 1990, the company has offered early retirement plans The expense related to these plans is amortized in ac.
December 31 is as follows. 1990 1989 cordance with rate maWng treatment and ar'ounted to
$11,954,000, $11.202,000 and $5529,000 for the years
( ) 1990,1989 and 1988, respect!vely. In additic 7, $809.000 in Actuana! present value of beneht 1990 and $2,033,000 in 1989 were charged to construction and other accounts. The company's habihty related to the Vt b nefits $ (407,324) $ (374736) etaement plans was $16,792,000 at December 31 ea Nonvested benehts . (4,540) ] 7;031) Accumulated benett The company also provides certain health care and hfe obhgation . (411,864) (381,767) insurance benetts for retired employees Substantia!!y all Additional amounts related to employees may become ekgible for these benehts when projected sa!ary i. creases . (178,691) jl94,188) they retire The company has, since 1987, recognized the Projected benefit obhgation . (590,555) (575,955) cost of these benefits on an accrual basis usng 'he Fair value of plan assets, pnmanly " aggregate cost" actuanal method, which spreads the equity and fixed income expected cost of such benehts over the remaining penods of secunties 798,215 827,561 employees' service as a level percentage of payroll cost. Unrecognized net gain (121;226) (158,035) Accrued costs for me6 cal benehts are funded to the extent Unrecogruzed net . deductible under federalincome tax regulations. Accrued transtion asset (74,693) (80.517) . costs of hfe insurance benehts, other than current cash Unrecognized pnor payments for retirees, are not currently bcnng funded. The service cost 1,531 cost of such benehts amounted to $14.394,000 in 1990,
~ 1.622
$14.396,000 in 1989 and $17,008.000 in 1988-Prepaid penson cost recog' nized 13,272 $ FASB Statement No 106," Employers' Accounting for in the Balance Sheets $ 14.676 Postretirement Benef.ts Other Then Pensons", which must be implemented by 1993, will require that health care and Weighted average rates assumed in the actuanal calcula- hfe insurance benehts for retired employees be accounted tions were for on an accrual basis usng a sngle actuana! method, 1990 1989 1988 "beneht! years of-service" This method spreads the Discount 8.0 % 8.0% 85% expected cost of such benehts to each year of an Annual salary increase . 6.0 6.0 6.0 employee's service until the employee becomes fully eEg!ble Long-term return on plan assets 8,5 85 8.5 to receive the benehts Implementation of FASB Statement.
No.106. which the company expects to adopt in 1993 on a prospective bass, is expected to result in the recognition of higher Cost related to these retiree benehts 27
Vacation Pay- retum on end of penod retail common equity. The rates also The company's employees earn their vacation in one year provide for adjustments to recognee the placing of new and take it in the subsequent year. However, for rate-making generahng fac htes in reta l service b " increases and - purposes, vacation pay is recognized as an allowable decreases haw been placed into oftM oce the adopt.on of expense only when paid Consistent with this rate making these re'es Dunng 1989, an increase of ,J percent went into treatment, the company accrues a current habihty for earned effect in Januay in March 1990, the APSC wted to continue vacation pay and records a current asset representing future these rates in effect until November 1.1994 by which time recomrabihty of the cost Such amounts were $22,845.000 the APSC must reveN the procedure. hemymr. the rates will and $22.021.000 at December 31,1990 and 1989, respec. remain in effat therea'ter unless the APSC wtes to modify or tiwly In 19911 an estimated 68 percent of the 1990 deferred dscontinue them The order provided for sewral modf ca-vacation cost win be expensed and the balance WW be lions to the rates, includng a reduction in the a!Iowed range charged to construction and other accounts of return on common equity to 13-14W percent from 13h 15 percent, a moratanum on upward adjustments through June 30,1991, and provisions which effectively hmf. increases income Taxes-The company provides deferred income taxes for au , m dwreases to 4 pacent in any calendar year The order Iso requires that the APSC review the range of return by income tax tirning d;fferences inestment tax credts utihzed are de' erred and amortized to income omr the amtage hves June 30.1992 to determine if such range is appropriate in hght of current economic condtions of the related property. Provisions for property related doferred income taxes reflect consumption of part of the value of the The company's rate schedules provide for adjustments in retaif electnc rates to re'iect changes in ooth state and federat plant and equipment to which the picmsons relate Accordngly, income tax rates As a result of the decrease in the federal the related accumulated deferred income taxes are a valua-tion reserw that is deducted from plant lavestment in the income tax rate by the Tax Reform Act of 1986, retail electnc rates were reduced approximately 1 percent in January 1988-Balance Sheets FASB Statement No 96. " Accounting for A settlement agreement with Gulf States Ubhties Company Income Taxes", which is currently scheduled to be imple-(Gulf States) related to unit ooner and other long-term power menteJ by 1992, would require among other things, conver, safes contracts with the F
- em electr:C system has been s:on to the habihty method of accounting for deferred income signed See Note 11 for ado. alinformation conceming taxes and the use of before-income-tax AFUDC rates Cur-rently, the equity component of AFUDC is cap tahzed without Wsman In May 1990. Southern and its operahng subsidanes a provision for deferred taxes, and the debt component is (includng the company) were informed by the federal gomm-captahzed net of deferred income tax. This change would not ment that a cnminal inwstgation of the operating subsidanes a'fect net rate base, but cou!d create addtona! property (other than Savannah Electnc and Power Company) tax ac-taxes The change would also necesstate restabog deferred counbng prachces for spare parts had been concluded and income taxes at the 6 ates at which they are expected to be that no cominal charges relahng to such practices mil be filed settled The statement also precludes the netting of deferred against Southern, the subsidanes or any andvidual. Manage-income tax habihtes against assets. 'l he FASB has tentattw!y ment understands that the inwstigation is continuing wth deoded to supersede Statement No 96 with a nos accounting standard that would retan the kabahty method of accounbng , respect to other matters, includng pontical contnbubons and for deferred income taxes, but would require somewhat certain pension fund transactions The joint inwstigation with d'ferent implementation methods if the new standard is the Internal Revenue Service (IRS) centered on the tax accwnbng fm mergency spare parts for generat ng p! ants adopted by the FASB, it would not haw to be implemented and related to the oroper timing for deduchng the cost of before 1991 The company would implement the standard when required Certain deferred income taxes have been such parts in management s opinion, the outcome will not haw a matenal effect on the company,s f nancial statements.
recorded at rates higher than the rates spec fied in the Tax in March 1989. the SEC ordered a povate inwstigaton to Reform Act of 1986. The amounts resulting from this change in tax rates wil be used to reduce future tax expense for determine whether Southern its operating subsidaries (except Savannah Electnc and Power Company) and accounbng and rate-making purposes Tax law requires that amounts related to accelerated depreciat on be used to Southem Electnc Generating Company (SEGCO) maih ave violated federal secunties IcrAs and the Holdng Company reduce tax expense owr the hws of the related assets, Amounts not related to accelerated depreciabon are not M in connechon wth certain d sclosures in or omissions om sewntes offenng matenals proxy statements. reports, covered by normahzation requirements and wl! be rewrsed and documents filed wth the SEC - which were a!so proaded in accordance wth rate-making treatment. See Note 5 for to investors and c'hers - relating to certain tax and finanaal further informabon regardng income taxes account ng pract ces, spare parts accounting, tax deductions The company is included in the consohdated federal and habiht es. conbngent habikt es, and other matters income tax return of Southern affect ng the net income and f nancial condt on of Southern 2, REGULATORY MATTERS AND LITIGATION- internal accounbng controts and poitbcal contnbut ons in November 1982, the APSC adopted rates that provide Management beheves that this investgabon is related to the for penodic adjustments based upon the company's camed investigabons dscussed above 28 ,
estimates, revised load estimates, the cost of capital. and The finat outcome of this matter cannot now be deter-mined, hawcver, in management's opinion, the outcome will changing environmentai reqairements
. not have a material effect on the company's financial statements Financing-In July 1989. wo customers of the company filed a ovil The abihty of the Company to finance I!S capital budget complaint in Federal Distnct Court in Montgomery, Alabama, depends on the amount of funds generated internally and against the company, Southern, SCS and Arthur Ande*9n & the funds 11 can ra:se by extema! finanong The companQ Co. seeking to represent a!I ratepayers of the company and pomary sources of externa! finanong are sales of first claiming $10 milhon actual damages relating to the f:nanc a! rnortgage bonds and preferred stock to the pubhc receipt of accounting treatment of spare parts at the company's addtional paid-in capital from Southem, and leasng of generating plants, p!us treble and punitive damages for nuclear matenal.
alleged violations of the federa! Racketeer Influenced and in order to issue addtional f rst mortgage bonds and Corrupt Organizations Act (RICO), federal and state antitrust preferred stock, the company must comply with certain laws, other federal and st&te statutes and common law fraud- eamings coverage requirements contaned in its mortgage The defendant's motions to dsmiss this compla:nt were indenture and corporate charter The rriost restnctive of these granted in January 1990, and the plaintiffs have appealed provisons requires, for the issuance of add;tional fitst mortgage that order The company is also named as a defendant in bonds, that before-income-tax eamings. as defined. comr smilar Mississppi and Florida suits- pro forma annuahnterest charges on outstandng hrst mortgage This litigation involves matters currently under federal , bonds at least twice, and for the issuance of additional investigation as escussed abcm In managements opinion- puferred stock, that gross income available for interest cover the company's accounting eract cas are appropnate and the pro forma annua! interest charges and preferred stock outcome of this htigaton win not have a matena! effect on the dvidends atleast one and one-half times These coverages company's finanaal statements for first mortgage bonds and for preferred stock for the year in September 1990 two customers of the company filed ended December 31,1990. were 4 54 and 2.17, respectively a C1vil complaint in the Circurt Court of Shelby County, Alabama, against the company seeking to represent all per. Fuel Commitments-sons who, poor to June 23,1989, entered into agreements To supply a portion of the fuel requirements of its with the company for the financing of heat pumps and other generating plants, the company has entered into vanous merchandse ourchased from vendors other than the com- long-term commitments for the procurement of fossl and pany The pdntiffs contend that the company was required nuclear fuel in most cases these contracts Contain provi-to obtain a lico .r under the Alabama Consumer Finance sons for pnce escalations, minimum production levels and Act to engage in the busnes's of making consumer foans other finanaal commitments In adoton, contracts with a The plaintiffs are seeking an order declanng these agreements certa:n coal contractor require reimbursement or purchase, null and wid and requinng the company to refund it!! pay, at net book value, of the inwstments in mines or equipment ments, nnoopal and interest made under these agreements. upon termination of the contract. At December 31.1990, The aggregate amount under these agreements, together such net ocok value was approximately $36 mdhon. Add-with interest paid, currently is estimated to be $40 mdkon. Whde the hnal outcome of this matter cannot now be deter, tonal commitments for coal and for nuclear fuel wil be required in the future to supply the company's fuel needs mined, in management's opinion the final outcome will not nave a matena! effect on the company's financial statements A claim by a coal supolier of the company for reimburse. 4. BANK LINES OF CREDIT: ment of health care benehts for its employees has been sub- Effective January 1990, the company, along wth Southern mitted to bindng arbitraton, and the initial deosion of the and Georgia Power Company (Georgia), entered into arbitrator holds that the Company is liable for these benehts agreements wth several banks outsde the service area to for a period of time, which period remains in dspute. While provide $500 milhon of revolving credt to the companies, ' th3 ultimate outcome of this matter cannot now be determined. indvidually or in any combination, up to the total credt in management's opinion, the outcome will not have a matenal amount of $500 milhon through May 1,1993 Mississpoi effect on the company's finanaal statements Power Company (Mississppi)is a party to one of the agreements which provides Mississppi wth $3 mdhon of available credt. The companies haw the option of convert-
- 3. CAPITAL BUDGET, FINANCING ing the short-term borrowngs into term loans, payable in 12 AND FUEL COMMITMENTS: equal quarterly installments, wth the hrst installmen! due at Capital Budget- the eno of the first calendar quarter after the apphcable ter-The compans/s capital expendtures are currently minaton date or at an eartier date at the companies' option.
estimated to total $432 milkon in 1991, $362 mdhon in 1992 in addton, these agreements provide for payment of com-and $407 mdlion in 1993x The estimates include AFUDC of mitment fees based on the unused portions of the com-
$22 mdhon in 1991. $10 mdhon in 1992 and $10 mdhon in mitments or for compensating balances to be rnaintained at 1993. The capital budget is subject to penodc review and the banks revision, and actual capital cost incurred may vary from Addtonally, the company mainta:ns committed knes of estimates because of several factors includng nm cost crent wthin G service area in the amount of $141 mdhon 29
which expire at vannus times dont g 1991 and in certain accordance with regulatory rate making treatment See Note cases, provide for average annual c:mpensating balances 1 for proposed rules on accounhng for income taxes Because the arrangements are based on an awrage Deferred investment tax cred:ts are amortized over the life
. balance, tne company does not consider any of its casa of the related property with such amorteabon apphed as a balances to be restncted as of any speofic date credit to reduce deprecat.on in the Statements of income At December 31.1990, the company had regulatory Credits amortized in this manner amounted to $19.238.000 in approval to have outstanding up to $330 milkon of short-term 1990. $20,592.000 in 1989 and $20618.000 in 1988 At borrowings. The company has requested that its APSC and December 31,1990. all inwstment tax cred:ts available to SEC authonzations for short-term unsecured indebtedness reduce federa! income taxes payable had been uthzed be increased to $450 mdhort The provtsion for income taxes currently payable indudes the tax effects of the reversal of phor years' tim:ng differences f r whch ddened income taes wee not provided At
- 5. INCOME TAXES:
A detad of the federal and state income tax prcr/isions is d,fferences was approximately $80 milhon. for whrch deferred shown below income taxes of approximately $29 mdhon haw not been 990 - _989._ 1 _M
- provided (In Thousands) The total provision for federal income taxes as a percentage Tota' provision for ohncome before federahncome tax amounted to 310 percent income taxes for 1990 and 1989. and 273 percent for 1988 The d,fference Federal- between these rates and the federal statutory rate of 34 percent
' _ Currently payable $101,375 $124A38 $ 73.644 was due pomanly to the exclusion from taxable income of the Defer ed- a!!owance for equity funds used dunng construction (1.7 percent Current year 34,604 38.298 74.142 in 1990, 2.0 percent in 1989 and 30 percent in 1988), the Reversal nf pnot reduction in federa! income tax expense related pnmanly to years 21,390 (12,207) (42,627) depletion for tax years aud ted and setted (2.5 percent in 1988)
-Deferred investment and differences in deprecation basis and rates (a negatiw 1.2 tax credits 132 6,917 15 019 percent in 1990 and 1989, and a negative 19 percent in 1988) 157,501 ---157.446 '120.178
- 6. OTHER LONG-TERM DEBT:
State _ Detads of other long-term debt are as follows Currently payable 8.886 11,808 8965 December 31, Deferred- 1990 1989 Current year 5,489 5,041 4927 (In Thousands) Roversal d poor Obhgations incurred in connect.on years 2,997 _ _583 1,510 witn the sale of tax-exempt pdlution
, 17,372 17.432 15.402 control revenue bonds by pubhc Tota' 174,873 174 878 135'580 autnone ss 2003-2013 6% to 9 % . $ 162,950 $ 163 200 h r te @ c 2014 2016 7.20% to 10 %% 306200 306200 Less funds on depos:t with other income . (11,081) jt3.629) . (8,034) trustees 1,546 ._ 1,546 Federal and state income taxes charged , 467,604 467.854 to operations . $185,954 $188,507 $143614 Capitakzed lease obhgations and other long-term debt-Nuclear fuel . 142,418 144.042 For the year ended I ecember 31,1990, estimated federal Office buddings 8,699 8.971 and state income tax payments exceeded the accrued Street hght and other 6,461 . 6.629 federal and state income taxes resulting in an estimated 157,578 159.642 refund of $27,083.000.
$ 625,182 $ 627A96 Defened income taxes result pnmanly from the use of --
accelerated methods of depreciation and other wnte offs of property cost, as provided for by the income tax laws, being Pollution control obbgations represent installment purchases greater than the book deprecation of such property Other of pollution control facht,es hnanced by funds denved from deferred income taxes are provided for certain costs or sa!es oy pubhc authonties of revenue bonds The company is revenues that are recogn4 zed for income tax purposes in reqvred to make payments suthoent for the authonbes to penods different from those used for book purposes. Income meet pnnopal and interest requirements of such bonds With taxes deferred in poor years are reversed and charged or respect to $32,000.0(X) of such polluton control obhjations. creOted to income wnen the book deprecahon of property the company has authenbcated and dehvered to the trustees cost exceeds the related tax deduchons or when other timing a hke pnnopa! amount of hrst mortgage bonds as secunty for differences reverse As explained in Note 1. certain amounts its obhgat:ans under tne installment purchase agreements. resulting from the change in tax rates wil be rewrsed in No pnnopal or interest on these fast mortgage bonds is 30
payable unless and until a default occurs on the installment secunty rates. However, the apphcable dividert i ite for any purchase agreements. dividend penod shall in no event be, for the 198'. enes, less The company has capitalized leased nuclear matena! arvJ than 7.20 percent per annum or greater than 13; I percent recorded the related lease obligations The arrangement per annum and, for the 1988 senes, less than 5.92 percent provides for the payment of interest at varying rates and per annum or greater than 11.04 percent per annum. The times dependent on options selected by the company from per annum dividend rates are shNn below: types of ioans available under the arrangement. The 1983 Seies 1988 Senes ponapal amount outstanding at the end of 1990 was First quarter 1990 . 7.52 % 6 40 %
$142.41&OOO w th an chective rate, including apphcable fees- Second quarter 1990 8,32 7.04 of R30 percent. Pnnapal payments are required under the Third quarter 1990 8.00 688 arrangement based on the cost of fuel burned Fourth quarter 1990 8.64 736 The company has also capitahzed certain office butid:ng First quarter 1991 7.84 672 leases and a street kght lease. Monthly pnnopal payments plus inte.est are required, and at December 31,1990, the The comparyissued 500.000 shares of Auction Class A interest rate was 95 percent for office buildings and 13.0 Preferred Stock in November 1988, with a stated capital of percent for street hghts $100 per share The dividend rates are determined on the
'i ne net book value of capitahzed leases included in utility bas s of orders placed in an auction conducted generally plant in service was $142.069.000 and $142,255,000 at every 49 days Dunng 1990, the per annum dividend rate December 31,1990 and 1989, respectively. The est: mated ranged f rom 627 percent to 743 percent per annum. The aggregate annual matunties of other long term debt through rate for the dividend penod beginning January 23,1991 e 1995 are as follow $50,669.000 in 1991, $4a773000 in 560 percent per annum.
1992, $31.564000 in 1993, $15.154.000 in 1994 and 5a083.000 in 1995,
- 9. INVESTMENT IN JOINTLY OWNED FACILITIES:
The company and Georgia own equa!!y all of the outstand-
- 7. LONGTERM DEBT DUE OR TO BE REDEEMED ing capital stock of SEGCO, which owns efecinc generating WITHIN ONE YEAR: Ws e a dal raWapaW d MW Mm The annual first mortgage bond improvement fund require- together with assocated transmisson fachties. The capacty ment is one percent of the aggregate pnnopal amount of of these units is sold equally to the company and Georgia -
bonds of each series authenticated, so long as a portion of under a contract expinng in 1994 which, in substance requires that senes is outstanding. and may be satisfied by the depost payments suthoent to provide for the operating expenses of cash and/or reacquired bonds the certification of unfunded taxes, interest expense and a return on aquity, whether or not property adcitions or a combination thereof. The 1991 SFCCO has any capaoty and energy available The requirement amounting to $2C20.000 was sabsf ed in January company s share of such amounts totaled $81,901.000 in 1991 by the deposit of cash, all of which was used for the 1m $8U66000 in .1989 and $76,174,000 in 1988 and is redemption of outstanding bonds ($15.55&000 of tne 12%% included in Purchased and interchanged power, net in the senes and $4,762.000 of tne 10%% mries). Statements of income First mortgage bonds matunng i,. 991 amount to In addition, the company has guaranteed unconditionally
$13,000,000, and other long-term deot of $50.669,000 matunng the obhgation cf SEGCO under an insta!! ment sale agree-in 1991 conssts pnmanly of capitakzed nuclear fuel lease ment for the purchase of certain poikition control fachbes at obhgations SEGCO's generating units, pursuant to which $24.5 milhon prinop$l amount of pollution control revenue bonds are
- 8. PREFERRED STOCK: outstanding Georgia has agreed to reimburse the company The 11 percent senes of preferred stock is subject to a for the pro rata portion of such obhgation corresponding to its cumulative sinking fund requinng the redemption of 25,000 then proportionate ownership of stock of SEGCO if the shares ($2,500.000) of such stock on January 1 each year company is called upon to make such payment under itc The company has the non-cumu!ative option to double the guaranty number of shares redeemed in any one year The stock is At December 31,1990, the capitahzation of SEGCO conssted redeemable for snking fund purposes at $100 per share of $59,516,000 of equity and $96,601,000 of long-term debt on plus accrued d4vidends to the date of redemption. The which the annual interest requirement is $8,376,000. In 1990 redemption requirement may be offset each year in whok r and 1389 SEGCO did not pay any dividends. In 198& SEGCO in part by shares purchased and canceled. The January 1, paid dividends totakng $5.422,000. SEGCO's net income 1991 sinking fund requirement was satisfied through the . was $8364.000,57,500,000 and $6,604.000 for 1990,1989 redemption of 25,000 shares The company exerosed its and 198& rospectively.
option to redeem 25,000 additiona! shares The company and Missssppi own as tenants in coramon The company issued 2,000,000 shares of Adjustable Rate in the proportions of 60 percent and 40 percent, respecsely, Class A Preferred Stock in September 1983. wth a Stated a 500,000 kilowatt steam-electne generating plant in Greerie capital of $25 per share in February 198a the company County, Alabama. The plant was placed in service in 1965 issued an additional 2.000,000 shares of Adjustable Rate and the company's gross investment at December 31,1990. Class A Preferred Stock with a stated capital of $25 per amounted to $79.102,000. The company's share of expenses share. The dividend rate on each of these senes is adjusted is included in the corresponding operating expense quarterly using a formula based upon certain U S. Treasury accounts in the Statements of income 31
- 10. PROPOSED SALE OF INTEREST IN PLANT: Company and M ssissippi) and SCS (collectweiy. the The company proposes to sell an 8.16 percent undMded Southern Companies) The complaint sought a judgment ownership interest in units 1 and 2 of Plant Mdler and related declanng that Gulf States was excused from further obin facilmes to Alabama Electnc Cooperanve, Inc (AEC) AEC s gabon under its unit powr and otner long term poner sates ownership interest would represent about 108 megawans of contracts with the Southern Companies and an award to Gulf the two units' capaaty of 1.320 megawans. States for unspeafted damages Gulf States aneged that the This purchase by AEC wdl be in heu of a purchase of an Southern Companies faded to negotiate and renegotiate in interest in Plant Farley in accordance mth cond,tions good fatin to reouce tne amount of capacity purchases imposed by the NRC on the operating hcenses for Plant under the contracts and engaged in fraudulent conduct in Farley in an ant 2 trust review The agreement for sale of the entanng into the contracts in December 1988. the Southern ownership interest in Plant Maler units 1 and 2 has recewed Compan es fded a countercla:m against Gulf States seeking the requ:ste regulatory approva!s The proposed safe is to be recovery of a!! past due payments and damages for breach closed no later than June 1,1992. The purchase pace will be of the contracts. The case is pending before the Court estabkshed by a formula under which a calculabon w l1 be Rewnues recorded a'ter July 1.1988 do not include any made at the time of sale if computed currently, the formula amounts for sales to Gulf States under these power sales would yield apprommately $45 milkon. contracts Pnor to that date, revenues included the luli amnunt due under these contracts Some of tnese revenues have been withheld by Gulf States since 1986 Because of
- 11. NONTERRlTORIAL REVENUES:
The operating subsdianes of the Southern electnc system. m m as M e b% E W M h n eq G Mama! conMon. m d use une including the company have entereo into long-term and short-term contractua! agreements for the sale of capaaty 9 charges to the provison for uncollect;ble accounts as shown and energy to certain non-affdiated utaties located outside below. the system's service terntory. Certain of these agreements are non-firm and are based on capaoty of the system in general Cumulative Other agreements are firm and pertain to capaaty related to 1986 1988 1988 specific generating units. Gecause the energy is generally sold at cost under these agreements. revenues from capaaty (in Thousands) sales primardy a"ect profitabaty The company's portion of Disposition of Gulf States off-system capaaty revenues has been as follows. Revenue-Total revenues . $148,883 $25442 Revenues withheld or deposited 91,746 20.113 Other Other Unit Long-Term ShortTerm Charged to provison for Year. Non-firm '-Total uncoMtse accounts . 73N4 20.113 _ Power _ No_n . firm 43,250 12.829 Excluded from after-tax income 1990 $155,737 $7,178 $1,165 ' $164,080 1989 137.024 1,290 758 139.072 1988 121.008 4695 - 125.703 Certain immatenal adiustments were recorded in 1989 and 1990 reflecting true-up provisions of the contract and are Long term non-firm power was sold to the City of Ta!!a. included in the cumulative amounts hassee, Florida (Tallahassee), under a contract that expires in in December 1990, the Southern Companies entered into the year 2000. Howewr. in December 1990, this contract was a settlement agreement with Gulf States setting fortn the cance!ed and reciaced with a contrt for the purchase of terms and conditions of the settlement that wil resoNe this unit power Also becinning in 1990. rion-firm power is being pending htigat;on. ihe proposed settlement is subject to sold to Flonda Pow Corporation (FPC), and these sa!es wd numerous condrons, including approvals by the boards of continue through 1993 in 1990 shon term non firm power d rectors of the Southern Companies and Gulf States. the, was sold to Jacksonvule Electnc Authonty (JEA) FPC and FERC, the SEC and the Court The respective boaros of Tallahassee. directors of the Southern Companies and Gulf States have Unit poner from Plant Mdier is being sold to Flonda Power approved the settlement. and apphcations for approval have
& Light Company. JEA and Taifahassee. In 1994 FPC wil been fded witn the FERC and the SEC There is no a!so purchase unit power from Plant Maler Under these assurance. however, that all requisite approva!s w0l be agreements, approximately 1.000 megawatts of capaaty is obtained by Apnl 30,1991, and. if not the part:es wdl have no schedu!ed to be sold dunng the penod 1991 tnrougn 1994 furtner obhgation related to the settlement agreement unless Therea'ter, these sales wd increase to apprommateiv 1.200 that date is extended by mutual agreement. .
. megawatts by mid-1995 and reman at that level, unless The settlement agreement provides that, sub ect to the reduced by the Customers after 1999. until the expirahon of sausfaction of the conditions referred to abose, the Southern the contracts in 2010. These megawatts of capaaty sa!es do Companies would receive not include any amounts under contracts to Gu!t States.
which were suspended in 1988 as discussed below (1) approomately $75 mdhon in cash includ:ng ah funos in July 1986 Guif States fded suit in the U S Distnct Court oeposited by Gulf States n tne registry of tne Court - for the Eastern Distnct of Texas (Court) against Southern. its apprommately $68 milhon - in keu of certa:n payments to operat ng subsdianes (the company Georgia Gu!! Power the Soutnern Companies under the power s#es contracts. l l 32
(2f promissory notes'of Gulf States in the aggregate retained eamings were restncted against the payment of prinopal amount of $160 milhon payable - without common dvidends at December 31,1990,
' interest - on January 1,1993, subject to Gulf States' having " adequate cash" at that time as dscussed below; 13. NUCLEAR INSURANCE:
and. Under the Pnce-Anderson Amendments Act of 1988 (Act)._
- (3) six mdkon shares of common stock of Gulf States, which the company maintains agre aments of indemnity with the the Southern Companies would have the nght to vote NRC which, together with puvate insurance. cover third-party only in the event that bankruptcy or similar proceedngs habihty ansing from any nuclear incident occurong at Plant
- shall be pendng by or against Gulf States or any other Farley The Act hmits to $7.8 bdhon. pubhc habihty claims that event of default shall have occurred and be continuing could anse from a single nuclear inodent Plant Farley is insured against this habihty to a maximum of $200 mdkon by
. in addtion, the settlement agreement provides that on private insurance, with the remaining coverage provided_ by a
-l January 1,1993, Gulf States would pay to the Southem mandatory program of deferred premiums which could be ,
Companies, for each of the six milhon shares of common assessed. after a nuclear incident. against all owners of ' stock, an amount equal to the dfference between (i) $18.25. nuclear reactors A company could be assesu J up to $66 and (h) the highest average of the highest prices at which mdhon per incident for eacn hcensed reactor it operates but Gulf States' common stock trades for five consecutive days not more than an aggregate of $10 milhon per inodent to be dunng the penod between the date the shares are dehwred paid in a calendar year for each reactor Such maximum to the Southem Companies and January 1,1993. However, if , assessment for the company is $132 milhon per inodent but ! Gulf States'does not have " adequate cash" on January 1. not more than an aggregate of $20 milhon to be paid for
~ 1993, all unpaid amounts pursuant to the preceding sentence each inadent in any one year.
and under the promissory notes would Legin to accrue The company is a member of Nuclear Mutual Limited (NML), a mutua! insurer estabhshed to provide property interest at the pome rate plus 1 percent and would be-payable on the earhet of the January 1st as of wtuch Gul! damage insurance in an amount up to $500 mdhon for States has " adequate cash" or January 1,1990 Pursuant to members' nuclear generating fachties. The members are the settlement agreement, Gulf States would be deemed to subject to a retrospective premium adjustment in the event have " adequate cash" at the bme it begins to pay cash that losses exceed accumulated reserve funds. The dividends on its outstanding common stock or to the extent company's maximum assessment per incident is kmited to its projected avadable cash balance exceeds $35 mdhon. The $14 milhon under the current pokcy
' net present value of the proposed settlement is estimated to Addtionally, the company has polices which currenG be up to $300 mdhon. provide decontamination excess propertyinsurance. and Gulf States' obhgat ons under the settlemeni agreement premature decommissioning cowrage up to $1.8 bilhon for will be secured by a first mortgage hen on the Lewis Creek losses in excess of the $500 milhon NML coverage. This p Generahng Plant, a 520 megawatt gas-fired fachty owned by excess insuranco is provided by Nuclear Electnc insurance a subsidary of Gulf States, and a pledge of the common Limited (NEIL), a mutual insurance company; and American stock of such subsidary .
Nuclear Insurers / Mutual Atomic Energy Liabihty. , There can be no assurance that the settlement contemplated Underwnters I by the settlement agreement will be completed. NEIL a!so covers the addtonal cost which would be The company wdl not recognize ary income relp ad to the incurred in obtaining replacement power dunng a prolonged proposed settlement untd it becomes probable that the accidental outage at a member's nuclear plant. Members condtions required for settlement will be satisfied. However, can be insured against increased cost of replacement po^er the effect _on the company's net income of the proposed in an amount up to $3.5 million per week (starting 21 weeks
~
settlement, if completed, cannot be determined at this time a'ter the outage) for one year and up to $2.3 million and $1.2 because the amount will be a'fected by: the value of the mdhon per week for the second and third years, respectively secunties as of the date the settlement is recognized; the - Under each of the NEIL pokoes, rnembers are subject to abhty to esumate the amount to be reahzed, if any, from the assessments if losses each year exceed the accumulated common stock price dfferential; and the regulatory treatment funds avadable to the insurer under that pokcy The present of the payments to be recetved by the company Of the funds maximum assessments per incident for the company would i distnbuted from the registry of the Court,37.18 percent w,Ji be be $65 mdkon each for excess property damage and for dstributed to the company It is currently antcipated that of replacement powet all other payments received from Gulf States,34.50 percent For all on-ste property damage insurance pokoes for
- will be apportioned to the company ' commercial nuclear power plants. the NRC has issued a final rule providng that for all pokoes issued or annually reneued I
12cDMDEND RESTRICTIONS: on or after Apnl 2,1991, the proceeds of such pohoes shall
- The company's first mortgage bonds and preferred stock be dedicated first for the sole purpose of placing the reactor -
outstandng are enttled to the benehts of indenture in a safe and stable condt on after an acadent Any covenants or charter pro /is ons restricting the payment of remaining proceeds are next to be apphed toward the cost of cash dividends on common stock (except those paid decontamination and debns removal operabons ordered _by concurrently with the receipt of a cash capital contribution in the NRC, and then. any further remaining proceeds are to be hke amount). Under the most restncbve of these, a first paid either to the company or to its bond trustees as may be mortgage bond indenture covenant. $273.455.000 of appropnate under apphcable trust indentures s s
14 ASSETS SUBJECT TO LIEN: 16. QUARTERLY FINANCIAL DATA (UNAUDITED): The company's mortgage, as amended and suppie- Summanzed quarterly financial data for 1990 and 1989 are mented. secunng the first mortgage bonds issued by the as .follows company; constitutes a direct hrst hen on substantiaily a'l of . the company's hxed property and franchises Net Income after Dividends
- 15. ALABAMA MUNICIPAL ELECTRIC AUTHORITY Operating Operating on Preferred (AMEA) CAPACITY CONTRACT: Revenues income. Stock in August 1986 the company entered into a firm power (in Thousands) purchase contract wth AMEA entitling AMEA to scheduied 1990 amounts of capacity (to a maximum of 100 megawatts) for a First $537.585 $118.721 5 61,457 penod of 15 years commencing September 1.1986 This Second 658.216 148.155 89.642 power wil be sold to AMEA for its member municipakties that Third 790.954 194 894 137.905 previously were served directly by the company as wholesale Fourtn 617.289 87,785 23.799 customers Under the terms of the contract, the company received a payment from AMEA representing the net present 1939 value of the twenue associated with this capacity ent:t!ement $ 83,222 First $559.393 5133.277 d:scounted at an effectiw annuai rate or 9.96 percent This Second 621403 128420 70677 ^
payment is being amor'ized to operating rewnue and the Third 717,850 179,704 112.735 discount is being amortzed to other interest expense as Foudh '586.741 109 914 44.512 scheduled capacity is made avadable owr the term of the contract. T he company's business is influenced by seasona! weatner in order to secure AMEA's advance payment and the conditions and the timing of rate adjustments company's performance obhgation under the contract, the corr cany issued and dehvered to an escrou agent $1133 milhon of first modgage bonas representing the mammum amount of hquidated damages payabie by the company in the event of a default under the contract No pnncoal or interest is payable on such bonds unless and until a default by the company occurs As the liquidated damages dechne under the contract. a portion of the bonds equal to such decrease wil be returned to the company At December 31 1990, $4 mdhon of such bonds haw been dehvered to the company by the escrow agent.
}
t I
Jack D. Woodard, Vice President, Geffem/ gfjegjy "f}yyjygfgj.ggjy/g Nuclear Generation Elmer B. Harris, President and Chief Southern Company Services,Inc. Art P. Beattie, Secretary Executive Officer 64 Perimeter Center East Charles M. Deason, Assistant Atlanta, Georgia 30346 Travis J. Bowden, Executive V. ice Comptroller (All series except the 8.72% President and Chief Financial 0fficer Depositary series and Auction Class A Jerry L Hams, Assistant Comptroller 1988 series) Bill M. Guthrie, Executive Vice President E. Wayne Boston. Assistant Secretary Harris Trust Company of New York and Assistant Treasurer. 77 Yhter Street William L McDonough, Executive V. ice New York, New York 10005 President J. R. Harris, Assistant Secretary and (For the 8.72% Depositary series) R. P. Mcdonald, Executive Vice Bankers Trust Company President Frederick D. Kuester, Assistant e Four Albany Street Secretary and Assistant Treasurer W. George Hairston 111, Senior Vice New York, New York 10015 President, Nuclear Operations Shirley A. Thomas, Assistant Secretary (For the Auction Class A 1988 series) Charles D. McCrary, Senior Vice John H. Snyder. Assistant Secretary President, External Affairs t David L Whitson, Assistant Treasurer Rebiistmis Banks H. Farris, Vice President. Human Resources ' Southem Company Services, Inc. 64 Perimeter Center East Stephen E. Bradley, Vice President' Public Affairs 2 Oll1/SIOll O(([L,C/N Atlanta, Georgia 30346 (All series except the 8.72% John B. Byars Jr., Vice President, Depositary series and Auction Class A Robert A. Buettner Vice President and Eufaula 1988 series) Counsel Michael D. Garrett, Vice President. Harris Trust Company of New York Rayford F. Davis, Vice President, Power Delivery a Tuscafoosa 7 77 Water Street Robert H. Haubein Jr , Vice President, Dk' John E. Dorsett, Vice President, Power e8 De ie4 Tuscaloosa Geneiation Services J. Bruce Jones, Vice President, Mobile Bankers Trust Company R. S Hardigree, Vice President, Four Albany Street Corporata Services New York, New York 10015 Jerry J. Thomley, Vice President, R. E. Huffman, Vice President, Anniston (For the Auction Class A 1988 series) Operating Services Homer H. Tumer Jr., Vice President, Birmingharn William B. Hutchins 111. Vice President and Treasurer Clyde H. Wood, Vice President, I! III80! T. H. Jones. Vice President, Fossil Montgomery Balch & Bingham Generation P.O. Box 306 C. Alan Martin, Vice President, Marketing . 1 Effective January 1,1991 2 Resigned effectue September 18.1990 Charlton & McArthur, Vice President, 3 Retired effective March 1,1991 Economic Development 4 Effective June 22,1990 P Jackson W. Minor Vice President and Comptroller he ti e 2 9 6 Effectwe May 25,1990 M. Euel Wade Jr., Vice President, 7 Effective August 7,1990 8 Transferred to Georg;a Power Company Information Resources 4 effective July 18.1990 i l 1 35
Whit Armstrong, Entecprise 0982) Travis J. Bowden. Birmingham (1988)t Directors President, Chairman and Chief Executive Vice President and Chief Executive Officer Financial 0fficer Elmer B. Harris, Birmingham 0989)t The Citizens Bank President and Chief Executive Officer Carl E. Jones Jt, Mobile 0988)* Edward L. Addison, Atlanta (1983) President, Chairman and Chief James C. Inzer Jt, Gadsden 0965) President Executive Officer Partner The Southern Company First Alabama Bank of Mobile Inzer, Suttle, Swann & Stivender, P.A. (Electr'c Utility Holding Company) (Attorneys) Dt John W. Rouse, Birmingham James H. Sanford, Prattville (1983)* 0988)t Crawford T. Johnson Ili, Birmingham Presioent President and Chief Executive Officer 0969)t HOME Place Farms, Inc. Southem Research Institute Chairman and Chief Executive Officer (Diversified Farmers and Ginners) (Science and Engineering Research) Coca Cola Bottling Company United, Inc. Louis J. Willie, Birmingham 0984)t Bill M. Guthne, Birmingham (1988)t (Bottlers of Soft Drinks) President, Chairman and Chief Executive Vice President S ason Balch, Birmingham (1970)1 0. Malone Jt, Birmingham Booke T.Washingtoninsurance Company fa90' Balch & Bingham Chairman and Chief Executive Officer (Attorneys) (Life Insurance) SouthTrust Corporation William L. McDonough, Birmingham (Multibank Holding Company) William J. Rushton ill, Enningham 0985)t3 Ot Philip E. Austin, Tuscaloosa (1991)6 (1970)t Executive Vice President Chairman and Chief Executive Officer Chancellor Protective Life Corporation Gerald H. Powell, Jacksonville 0986)" The University of Alabama System (Life and Health Insurance) President Dixie Clay Company of Alabama. Inc. Audit Committee member John W. Woods, Birmingham (1973)t ,; Audit Committee alternate member (Mining and Processing Chairman and Chief Executive Officer Refractory Clay) t Executive Committee member AmSouth Bancorporation Ret e e" (Multibank Holding Company) Winto . Blount lit, Montgomery e g d as v so D rec o Fred Morgan Clark, Eufaula (1977)' eHechw January 7,12 Chairman and Chief Executive Officer eMed Resigned effectiw February 22,1991 Winton M. Blount 111 and Associates Resigned effective September 12, John C. Webb IV, Demopolis (1977) (Diversified investments) Pr sident Webb Lumber Company, Dr. Joab L. Thomas, Tuscaloosa 5 ff tive June 22,1990 (1986)" 5 Elected January 25,1991 (Wholesale Lumber) The University of Alabama . . Years in parentheses indicated date of William 0. Whitt, Birmingham (1979)2 Executive Director, Association of election.
- Edison Illuminating Companies, Inc.
Retired Executive Vice President ; e-m I; P;6 4 Management Changes 7 Changes in managementincluded the election of (fromleft) Charles D. McCrary to Senior Vice President. Extemal Affairs in January 1991, Michael D. Garrett to Vice President, Westem Divisionin August 1990, Wallace D. Malone Jr. to the Board of Directors in June 1990, and M. Euel Wade Jt to Vice President, Information
-Resources in June 1990. Dt Philip E.
Austin (not pictured) was elected to the Board of Directors in January 1991. 36
AlabamaPowerI (dK) North 18th Street PD llox 2MI thnningum. AL.H291
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