-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HFts/hOjO8pWw+MxLevEjoQkPyT609NtTH5pD4pbOf/FwKec0EdqqrAbB7HjYBDx aIvmWRWzebJ7YQKPsB1Egw== 0000217216-97-000001.txt : 19970430 0000217216-97-000001.hdr.sgml : 19970430 ACCESSION NUMBER: 0000217216-97-000001 CONFORMED SUBMISSION TYPE: U-13-60 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970429 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CO SERVICES INC CENTRAL INDEX KEY: 0000217216 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 630274273 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-13-60 SEC ACT: 1935 Act SEC FILE NUMBER: 049-00059 FILM NUMBER: 97589279 BUSINESS ADDRESS: STREET 1: 64 PERITMETER CENTER EAST CITY: ATLANTA STATE: GA ZIP: 303346 BUSINESS PHONE: 4046683574 U-13-60 1 SCS U-13-60 Form U-13-60 Mutual and Subsidiary Service Companies Revised February 7, 1980 ANNUAL REPORT For The Period Beginning January 1, 1996 and Ending December 31, 1996 TO THE U. S. SECURITIES AND EXCHANGE COMMISSION OF SOUTHERN COMPANY SERVICES, INC. (Exact Name of Reporting Company) SUBSIDIARY SERVICE COMPANY __________________________________________________________________ ("Mutual" or "Subsidiary") Date of Incorporation April 21, 1949 If not Incorporated, Date of Organization State or Sovereign Power Under Which Incorporated or Organized State of Alabama Location of Principal Executive Offices of Reporting Company 64 Perimeter Center East Atlanta, Georgia 30346-6401 Name, title, and address of officer to whom correspondence concerning this report should be addressed: Vice President, 64 Perimeter Center East W. Dean Hudson Comptroller and Atlanta, Georgia 30346-6401 (Name) Chief Financial (Address) Officer (Title) Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company: THE SOUTHERN COMPANY INSTRUCTIONS FOR USE OF FORM U-13-60 1. Time of Filing.--Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on form U-13-60 and in accordance with the Instructions for that form. 2. Number of Copies.--Each annual report shall be filed in duplicate. The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report become necessary. 3. Period Covered by Report.--The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year. Subsequent reports should cover a calendar year. 4. Report Format.--Reports shall be submitted on the forms prepared by the Commission. If the space provided on any sheet of such form is inadequate, additional sheets may be inserted of the same size as a sheet of the form or folded to such size. 5. Money Amounts Displayed.--All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or in hundred thousands of dollars, as appropriate and subject to provisions of Regulation S-X ( 210.3-01(b)). 6. Deficits Displayed.--Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes. (Regulation S-X, 210.3-01(c)) 7. Major Amendments or Corrections.--Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected. A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company. INSTRUCTIONS FOR USE OF FORM U-13-60 (Continued) 8. Definitions.--Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service companies and Subsidiary Service companies, Public Utility Holding Company Act of 1935, as amended February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60. 9. Organization Chart.--The service company shall submit with each annual report a copy of its current organization chart. 10. Methods of Allocation.--The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935. 11. Annual Statement of Compensation for Use of Capital Billed.--The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use of capital billed during the calendar year.
2 LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS --------------------------------------------- Schedule or Page Description of Schedules and Accounts Account Number Number ------------------------------------ -------------- ------ COMPARATIVE BALANCE SHEET Schedule I 4-5 ------------------------- SERVICE COMPANY PROPERTY Schedule II 6-7 ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY PROPERTY Schedule III 8 INVESTMENTS Schedule IV 9 ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Schedule V 10 FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 11 STORES EXPENSE UNDISTRIBUTED Schedule VII 12 MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 13 MISCELLANEOUS DEFERRED DEBITS Schedule IX 14 RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES Schedule X 15 PROPRIETARY CAPITAL Schedule XI 16 LONG-TERM DEBT Schedule XII 17 CURRENT AND ACCRUED LIABILITIES Schedule XIII 18 NOTES TO FINANCIAL STATEMENTS Schedule XIV 19 COMPARATIVE INCOME STATEMENT Schedule XV 20 ---------------------------- ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 21 ANALYSIS OF BILLING - NONASSOCIATE COMPANIES Account 458 22 ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND NONASSOCIATE COMPANIES Schedule XVI 23
3 LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS (Continued) --------------------------------------------- Schedule or Page Description of Schedules and Accounts Account Number Number ------------------------------------- -------------- ------ SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION Schedule XVII 24-25 DEPARTMENTAL ANALYSIS OF SALARIES Account 920 26 OUTSIDE SERVICES EMPLOYED Account 923 27 EMPLOYEE PENSIONS AND BENEFITS Account 926 28 GENERAL ADVERTISING EXPENSES Account 930.1 29 MISCELLANEOUS GENERAL EXPENSES Account 930.2 30 RENTS Account 931 31 TAXES OTHER THAN INCOME TAXES Account 408 32 DONATIONS Account 426.1 33 OTHER DEDUCTIONS Account 426.5 34 NOTES TO STATEMENT OF INCOME Schedule XVIII 35 FINANCIAL DATA SCHEDULE Schedule XIX 36 ORGANIZATION CHART 37 METHODS OF ALLOCATION 38 ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED 39
4 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. (Thousands of Dollars) SCHEDULE I - COMPARATIVE BALANCE SHEET Give balance sheet of the Company as of December 31 of the current and prior year. ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31 - ------- ---------------------- ---------------------- SERVICE COMPANY PROPERTY CURRENT PRIOR ------------------------ ------- ------ 101 Service company property (Schedule II) 234,904 228,515 107 Construction work in progress (Schedule II) 22,118 17,492 ------- ------- Total Property 257,022 246,007 ------- ------- 108 Less accumulated provision for depreciation and amortization of service company property (Schedule III) 132,535 121,392 ------- ------- Net Service Company Property 124,487 124,615 ------- ------- INVESTMENTS 123 Investments in associate companies (Schedule IV) - - 124 Other investments (Schedule IV) 3,925 3,401 ------- ------- Total Investments 3,925 3,401 ------- ------- CURRENT AND ACCRUED ASSETS 131 Cash - - 134 Special deposits - - 135 Working funds 5 - 136 Temporary cash investments (Schedule IV) 4,602 - 141 Notes receivable - 3 143 Accounts receivable 38,918 31,603 146 Accounts receivable from associate companies (Schedule V) 91,208 133,339 152 Fuel stock expenses undistributed (Schedule VI) - - 154 Materials and supplies 2,951 1,764 163 Stores expense undistributed (Schedule VII) - - 165 Prepayments 1,937 1,601 174 Miscellaneous current and accrued assets (Schedule VIII) 65 - ------- ----- Total Current and Accrued Assets 139,686 168,310 ------- ------- DEFERRED DEBITS 181 Unamortized debt expense - 1 184 Clearing accounts 108 1 186 Miscellaneous deferred debits (Schedule IX) 6,743 7,676 188 Research, development, or demonstration expenditures (Schedule X) - - 190 Accumulated deferred income taxes - - ------- ----- Total Deferred Debits 6,851 7,678 ------- ------- TOTAL ASSETS AND OTHER DEBITS 274,949 304,004 ======= =======
5 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. (Thousands of Dollars) SCHEDULE I - COMPARATIVE BALANCE SHEET ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31 - ------- ----------------------------------- ------------------ CURRENT PRIOR ------ ----- PROPRIETARY CAPITAL ------------------- 201 Common stock issued (Schedule XI) 725 725 211 Miscellaneous paid-in-capital (Schedule XI) 150 150 215 Appropriated retained earnings (Schedule XI) - - 216 Unappropriated retained earnings (Schedule XI) - - ------- ------- Total Proprietary Capital 875 875 ------- ------- LONG-TERM DEBT -------------- 223 Advances from associate companies (Schedule XII) - - 224 Other long-term debt (Schedule XII) 47,658 63,450 225 Unamortized premium on long-term debt - - 226 Unamortized discount on long-term debt-debit - - ------- ----- Total Long-Term Debt 47,658 63,450 ------- ------- CURRENT AND ACCRUED LIABILITIES ------------------------------- 231 Notes payable 15,792 10,599 232 Accounts payable 29,262 26,056 233 Notes payable to associated companies (Schedule XIII) - 5,890 234 Accounts payable to associate companies (Schedule XIII) 33,592 42,663 236 Taxes accrued 799 292 237 Interest accrued 62 106 238 Dividends declared - - 241 Tax collections payable 605 1,280 242 Miscellaneous current and accrued liabilities (Schedule XIII) 67,731 64,272 ------- ------- Total Current and Accrued Liabilities 147,843 151,158 ------- ------- DEFERRED CREDITS --------------- 253 Other deferred credits 78,573 88,521 255 Accumulated deferred investment tax credits - - ------- ----- Total Deferred Credits 78,573 88,521 ------- ------- 282 ACCUMULATED DEFERRED INCOME TAXES - - --------------------------------- ------- ----- TOTAL LIABILITIES AND PROPRIETARY CAPITAL 274,949 304,004 ======= =======
6 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE II SERVICE COMPANY PROPERTY BALANCE AT BALANCE AT BEGINNING RETIREMENTS OTHER 1/ CLOSE OF DESCRIPTION OF YEAR ADDITIONS OR SALES CHANGES YEAR ----------- --------- --------- ----------- ------- ---------- SERVICE COMPANY PROPERTY Account 301 ORGANIZATION - - - - - 303 MISCELLANEOUS INTANGIBLE PLANT - - - - - 304 LAND & LAND RIGHTS - - - - - 305 STRUCTURES AND IMPROVEMENTS 50,781 - - - 50,781 306 LEASEHOLD IMPROVEMENTS 21,485 1,826 - (72) 23,239 307 EQUIPMENT 2/ 79,587 6,513 (4,633) (549) 80,918 - 308 OFFICE FURNITURE AND EQUIPMENT 2/ 34,704 2,238 (1,039) (62) 35,841 - 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 2/ 1,304 2 (623) 100 783 - 310 AIRCRAFT AND AIRPORT EQUIPMENT 2/ 28,694 139 (10) - 28,823 - 311 OTHER SERVICE COMPANY PROPERTY 2/ 3/ 11,960 3,089 (191) (339) 14,519 - - ------- ------- -------- -------- ------- SUB-TOTAL 228,515 13,807 (6,496) (922) 234,904 ------- ------- -------- -------- ------- 107 CONSTRUCTION WORK IN PROGRESS 4/ 17,492 4,626 - - 22,118 - ------- ------- -------- ------- ------- TOTAL 246,007 18,433 (6,496) (922) 257,022 ======= ======= ======== ======= =======
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL: ( ) Denotes red figure. 7 SCHEDULE II-CONTINUED (Thousands of Dollars) 2/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR: BALANCE AT CLOSE OF SEC/CLASS SUBACCOUNT DESCRIPTION ADDITIONS YEAR - --------- ---------------------- --------- --------- 307/02 Research & Laboratory Equip. 973 2,282 307/03 Word Processing/Office Automation Equip. 1,517 5,120 307/04 Personal Computer Equip. 2,035 32,582 307/05 Computer Equipment 631 23,921 307/11 Telephone Systems 537 7,426 307/12 Telecommunications Equip. 820 9,587 308/01 Furniture & Fixtures 1,279 23,842 308/09 Data Handling Equipment & Miscellaneous 959 11,999 309/08 Autos, Trucks & Trailers 2 783 310/07 Aircraft 139 28,824 311/10 Software 3,088 12,822 311/13 Coal Pilot Scale Combustion Facility - 1,671 311/14 Boats 1 26 ------ ------- TOTAL 11,981 160,885 ====== ======= 3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY: 1. Purchased computer software and software licenses. 2. Pulverized coal pilot scale combustion facility. 3. Boats, motors, & trailers 4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS: A. An energy management system for the Southern Electric System to be located at Birmingham, Alabama.
8 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE III ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY PROPERTY ADDITIONS OTHER BALANCE AT CHARGED CHARGES BALANCE AT BEGINNING TO ADD CLOSE OF DESCRIPTION OF YEAR ACCT #403 RETIREMENTS (DEDUCT)1/ YEAR ----------- --------- --------- ----------- -------- ---------- Account 301 ORGANIZATION - - - - - 303 MISCELLANEOUS INTANGIBLE PLANT - - - - - 304 LAND & LAND RIGHTS - - - - - 305 STRUCTURES AND IMPROVEMENTS 20,829 1,989 - - 22,818 306 LEASEHOLD IMPROVEMENTS 7,398 1,137 - 47 8,582 307 EQUIPMENT 58,031 7,900 (4,389) (1) 61,541 308 OFFICE FURNITURE AND FIXTURES 18,221 2,639 (985) - 19,875 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 700 129 (205) - 624 310 AIRCRAFT AND AIRPORT EQUIPMENT 9,001 1,059 (10) - 10,050 311 OTHER SERVICE COMPANY PROPERTY 7,212 2,023 (189) (1) 9,045 ------- ------ ------ ------ ------- TOTAL 121,392 16,876 (5,778) 45 132,535 ======= ====== ====== ====== =======
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL: NONE ( ) Denotes red figure. 9 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE IV INVESTMENTS INSTRUCTIONS: Complete the following schedule concerning investments. Under Account 124, "Other Investments", state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc. Under Account 136, "Temporary Cash Investments", list each investment separately. BALANCE AT BALANCE AT EGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- -------- --------- ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES - - ACCOUNT 124 - OTHER INVESTMENTS Employee Merchandise Loans 31 9 Employee Energy Loans 2,287 2,520 Energy Insurance Mutual LTD - Reserve 11 11 ACE Limited - Reserve 69 69 Employee Computer Loans 875 1,038 Notes Receivable 86 86 Miscellaneous 42 192 ACCOUNT 136 - TEMPORARY CASH INVESTMENTS - 4,602 ------ ------ TOTAL 3,401 8,527 ====== ====== 10 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE V ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES INSTRUCTIONS: Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.
BALANCE AT BALANCE AT BEGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- ---------- ---------- ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES The Southern Company 890 1,039 Alabama Power Company 34,494 23,947 Georgia Power Company 55,327 36,390 Gulf Power Company 9,488 5,547 Mississippi Power Company 14,243 5,594 Savannah Electric and Power Company 5,903 5,992 Southern Communications Services, Inc. 753 1,500 Southern Development & Investment Group, Inc. 505 662 Southern Electric Generating Company 432 401 Southern Electric International, Inc.* 1,196 1,356 Southern Electric Railroad 75 99 Southern Nuclear Operating Company 10,020 8,656 Southern Telecom Holding Company - 23 Southern Information Holding Company - 1 Trustee for SCS Pension 13 1 ------- ------ TOTAL 133,339 91,208 ======= ====== ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL PAYMENTS The Southern Company 2,509 Alabama Power Company 8,066 Georgia Power Company 134,892 Gulf Power Company 24,274 Mississippi Power Company 20,145 Savannah Electric and Power Company 56,258 Southern Communications Services, Inc. 190 Southern Development & Investment Group, Inc. 217 Southern Electric Generating Company 237 Southern Electric International, Inc.* 986 Southern Electric Railroad - Southern Nuclear Operating Company 476 Trustee for SCS Pension - -------- The major portion of the above expenses consists of the Integrated System Power Pool transactions, transactions relating to the System Pension Plan, transactions relating to the Employee Savings Plan and transactions relating to the Employee Stock Ownership Plan. TOTAL PAYMENTS 248,250 * The name of Southern Electric International, Inc. was changed to Southern Energy, Inc. in October of 1996. For purposes of this report, the name Southern Electric International, Inc. (SEI) has been used.
11 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE VI FUEL STOCK EXPENSES UNDISTRIBUTED INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed "Summary" listed below give an overall report of the fuel functions performed by the service company.
DESCRIPTION LABOR EXPENSES TOTAL ----------- ----- -------- ----- ACCOUNT 152 - FUEL STOCK EXPENSES UNDISTRIBUTED 3,686 2,524 6,210 Total amount billed during current year as follows: Associated Companies The Southern Company (3) (2) (5) Alabama Power Company (1,154) (823) (1,977) Georgia Power Company (1,508) (947) (2,455) Gulf Power Company (264) (172) (436) Mississippi Power Company (385) (227) (612) Savannah Electric and Power Company (74) (51) (125) Southern Electric Generating Company (61) (46) (107) Southern Electric International, Inc. (166) (199) (365) Southern Electric Railroad (69) (56) (125) ------ ------ ------ Subtotal (3,684) (2,523) (6,207) ------ ------ ------ Nonassociated Companies (2) (1) (3) TOTAL 0 0 0 ====== ====== ====== ( ) Denotes red figure. SUMMARY: Fuel services performed by the service company consists of acting as agent on behalf of all the system operating companies on fossil related matters as defined in an operating agreement with each company.
12 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to stores expense during the year and indicate amount attributable to each associate company. DESCRIPTION LABOR EXPENSES TOTAL ----------- ----- -------- ----- ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED NOT APPLICABLE 13 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE VIII MISCELLANEOUS CURRENT AND ACCRUED ASSETS INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group. BALANCE AT BALANCE AT BEGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- ---------- ----------- ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED ASSETS - INTEREST RECEIVABLE - TEMPORARY CASH INVESTMENTS - 65 14 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE IX MISCELLANEOUS DEFERRED DEBITS INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each class. BALANCE AT BALANCE AT BEGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- ---------- ----------- ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS Deposit for Georgia Sales and Use Tax 26 26 Wilsonville Clean-up 1,619 141 Payroll Taxes 13 - Executive Stock Option Taxes 4 5 Retire Capital Items 19 20 Architectural Fees 560 - Unamortized Leasehold - Bldg. 66 3,029 2,752 Sundry Delayed Clearance 2,406 2,774 Power Marketing Trading Floor - 1,025 ------ ------ Total 7,676 6,743 ====== ====== 15 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE X RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES INSTRUCTIONS: Provide a description of each material research, development, or demonstration project which incurred costs by the service corporation during the year. DESCRIPTION AMOUNT ----------- ------ ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES 32,871 Total amount billed/incurred during current year as follows: Government Projects: Clean Coal Technology Projects: Yates CT-121 Project (196) Hammond Wall Fired Project 478 Crist SCR Project (315) Other Government Projects: Hot Gas Cleanup Project (24,161) Westinghouse AP600 Design Certification (56) Generic NOx Control Intelligent System (108) Westinghouse 1st of Kind Engineering (FOAKE) (1,559) ERPI Projects: GNOCIS Demonstration (39) RE&A EPRI Contracts (1,154) Advanced End-Use Technologies (86) EPRI Bioremediation Project (123) EPRI Bulk Trans. System Reliability (144) Associate Companies: Air Quality Studies (105) Combustion & Fuel Effects (637) Research Administration (518) Flue Gas Treatment (433) Power Delivery Research (57) Advanced End-Use Technology Research (1,221) Particulate Control Studies (425) Advanced Energy Systems (1,500) Thermal & Fluid Sciences (389) R&D Tech Econ Assessments (117) Lead Test Assembly (6) -------- TOTAL AMOUNT BILLED/INCURRED (32,871) TOTAL 0 ( ) Denotes red figure. 16 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XI - PROPRIETARY CAPITAL NUMBER OF PAR OR STATED OUTSTANDING ACCOUNT SHARES VALUE CLOSE NUMBER CLASS OF STOCK AUTHORIZED PER SHARE OF PERIOD - ------ -------------- ----------- ------------ ------------ 201 COMMON STOCK NO. OF SHARES ISSUED 17,000 50.00 14,500 TOTAL AMOUNT 725 INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general nature of transactions which gave rise to the reported amounts. DESCRIPTION AMOUNT - ----------- ------ ACCOUNT 211 MISCELLANEOUS PAID-IN CAPITAL 150 ACCOUNT 215 APPROPRIATED RETAINED EARNINGS - TOTAL 150 INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of capital owed or net loss remaining from servicing nonassociates per the General Instructions of the Uniform System of Accounts. For dividends paid during the year in cash or otherwise, provide rate percentage, amount of dividend, date declared and date paid. BALANCE AT NET INCOME BALANCE AT BEGINNING OR DIVIDENDS CLOSE DESCRIPTION OF YEAR (LOSS) PAID OF YEAR - ----------- --------- -------- -------- --------- ACCOUNT 216 UNAPPROPRIATED RETAINED EARNINGS - - - - TOTAL - - - - 17 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XII - LONG-TERM DEBT
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account. Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224 - Other Long-Term Debt provide the name of creditor company or organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding. TERMS OF OBLIG DATE BALANCE AT BALANCE AT CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE NAME OF CREDITOR OF OBLIGATION MATURITY RATE UTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR - ---------------- -------------- -------- -------- --------- ---------- --------- ---------- -------- ACCOUNT 223 - ADVANCES FROM ASSOCIATE COMPANIES: NOT APPLICABLE ACCOUNT 224 - OTHER LONG-TERM DEBT: Notes Payable CIBC, Inc. 09/09/1997 4.94 15,000 15,000 - 15,000 - ------ ------ -------- ------- ------ Subtotal 15,000 15,000 - 15,000 - ------ ------ -------- ------ ----- OTHER LONG-TERM DEBT: CAPITAL LEASE OBLIGATION Beacon Properties 02/01/2011 9.25 7,225 5,689 - 204 5,485 Beacon Properties 02/01/2011 13.00 41,551 42,761 - 588 42,173 ------ ------ --------- -------- ------ Subtotal 48,776 48,450 - 792 47,658 ------ ------ --------- -------- ------ TOTAL 63,776 63,450 - 15,792 47,658 ====== ====== ========= ======= ====== 1/ GIVE AN EXPLANATION OF DEDUCTIONS: CIBC - Deductions of $15,000,000.00 transferred to current maturities. Beacon Properties (Formerly Taylor & Mathis) - Deductions of $791,657.21 transferred to current maturities.
18 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company. Give description and amount of miscellaneous current and accrued liabilities. Items less than $10,000 may be grouped, showing the number of items in each group. BALANCE AT BALANCE AT BEGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- -------- --------- ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES The Southern Company 5,890 - ------ ----- TOTAL 5,890 - ====== ===== ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES The Southern Company - - Alabama Power Company 29,554 22,818 Georgia Power Company 4,175 1,761 Gulf Power Company 1,362 1,221 Mississippi Power Company 268 270 Savannah Electric and Power Company 15 22 Southern Electric Generating Company 38 - Southern Electric International, Inc. 967 967 Southern Communications Services, Inc. - 373 Southern Nuclear Operating Company 5,936 5,712 Southern Development & Investment Group 348 448 ------ ------ TOTAL 42,663 33,592 ====== ====== ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES Incentive Pay 22,410 20,621 Vacation Clearing Account 16,727 16,175 Accrued Labor & Related Overheads 2,924 4,174 Employee Group Insurance Premiums 1,234 704 Early Retirement Benefits 1,594 1,374 Productivity Improvement Program 12,447 11,926 Accumulated Provision for Major Overhaul of Aircraft 1,416 1,214 Supplemental Pensions and Benefits 645 731 Department of Energy 262 (75) Flex and Save Benefits 1,248 1,658 Post Employment Benefits 66 66 Severance Pay 2,864 8,107 Metro Life Advance-Current 56 176 (Continued on Page 18A) 18A ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES (Continued) BALANCE AT BALANCE AT BEGINNING CLOSE OF DESCRIPTION OF YEAR YEAR ----------- ------- -------- Associate Companies - ESP (7) (761) APCO - U.S. Savings Bond Withholdings 108 - Commitment Fees - Credit Lines 80 71 Accrued Bank Fees 149 136 APCO - Supplemental Life Ins. - Pension (24) (66) GPCO - Charitable Contributions Withholdings 12 - SCS - Employee Savings Plan (213) 567 MPCO - Contributory Life Ins. Withholdings - Pension 12 12 MPCO - Medical Withholdings 116 (565) APCO - Contributory Life Withholdings (4) 13 APCO - Personal Auto Maintenance - 23 SCS - U.S. Savings Bonds Withholdings 52 94 GPCO - Contributory Life Withholdings - Pension 5 17 SCS - GPCO-Efficiency Store Withholdings 1 12 GUPCO - Medical Withholdings - 667 MPCO - Contributory Life Withholdings - 422 MPCO - Medical Withholdings-Pension (3) (12) Funds Dist-Holders SE P&L Corp. 8 13 Miscellaneous (69 Beginning)(78 Ending) 134 37 ------ ------ TOTAL 64,272 67,731 ====== ====== 19 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Southern Company Services, Inc.(the "Company") follows the Uniform System of Accounts prescribed by the Securities and Exchange Commission ("SEC") for service companies, as amended, effective January 1, 1980. The Company has no earnings or retained earnings since it primarily renders services at cost to its parent company, The Southern Company, and to that company's subsidiaries, as further discussed in Note 2. The financial statements are prepared in conformity with generally accepted accounting principles which requires the use of estimates. The actual results may differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value. Income Taxes The Company is included in the consolidated federal income tax return with The Southern Company and its subsidiaries. Federal income tax deferrals primarily resulting from the use of accelerated depreciation are fully utilized and accounted for by the operating subsidiaries of The Southern Company. Property, Equipment, and Depreciation and Amortization Property and equipment, including any interest capitalized during construction, are recorded at cost. Depreciation and amortization are provided on the straight-line method over the estimated economic life of the related asset (ranging from 5 to 12 years). Leasehold improvements are amortized over the lives of the respective leases. 19A ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. On retirement or sale of assets, the cost of such assets and the related accumulated depreciation are removed from the accounts, and the gain or loss, if any, is credited or charged to income. 2. SERVICE AGREEMENTS The Southern Company and each of its operating subsidiaries (Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, and Savannah Electric and Power Company), Southern Electric Generating Company (an operating subsidiary owned equally by Alabama Power Company and Georgia Power Company), Southern Electric International, Inc. (a subsidiary of The Southern Company which designs, builds, owns, and operates power production facilities and provides a broad range of technical services to industrial companies and utilities in the United States and a number of international markets), Southern Development and Investment Group, Inc. (a subsidiary of The Southern Company which researches and develops new business opportunities), Southern Nuclear Operating Company (a subsidiary of The Southern Company which provides services to the Southern electric system nuclear power plants), Southern Electric Railroad Company (a subsidiary of The Southern Company, which provides railroad services to the operating subsidiaries) and Southern Communications Services, Inc. (a subsidiary of The Southern Company, which provides wireless communications services to the operating subsidiaries and their customers) have entered into agreements with the Company under which the Company renders the following services at cost: general executive and advisory services, general engineering, design engineering, purchasing, accounting and statistical, finance and treasury, tax, insurance and pension, rate, budgeting, business promotion and public relations, employee relations, systems and procedures, and other services with respect to business and operations and, in the case of operating subsidiaries, power pool operations. The agreements shall be canceled to the extent and from the time that performance thereunder conflicts with any rule, regulation, or order of the SEC adopted before or after the execution of the agreements. 19B ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. 3. RETIREMENT BENEFITS Pension Costs The Company has a defined benefit, trusteed, noncontributory pension plan which covers substantially all regular employees. The Company uses the "entry age normal method with frozen initial liability" actuarial method for funding purposes, subject to limitations under federal income tax regulations. Amounts funded to the pension trusts are primarily invested in equity and fixed-income securities. Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions," requires use of the "projected unit credit" actuarial method for financial reporting purposes. Other Postretirement Benefits The Company provides certain health care and life insurance benefits for retired employees. Substantially all employees may become eligible for these benefits when they retire. Trusts are funded to the extent deductible under federal income tax regulations. Amounts funded are primarily invested in debt and equity securities. Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" requires that medical care and life insurance benefits for retired employees be accounted for on an accrual basis, using a specified actuarial method, "benefit/years-of-service." Funded Status and Cost of Benefits The following tables show actuarial results and assumptions for pension and post retirement insurance benefits as computed under the requirements of FASB Statement Nos. 87 and 106, respectively. The funded status of the plans at December 31 was as follows: 19C ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. Pension 1996 1995 ----------------------------- Actuarial present value of benefit obligations: Vested benefits 208,808 172,643 Non-vested benefits 16,361 12,308 -------- -------- Accumulated benefit obligation 225,169 184,951 Additional amounts related to projected salary increases 104,606 86,455 -------- -------- Projected benefit obligation 329,775 271,406 Less: Fair value of plan assets 479,484 376,547 Unrecognized net gain (151,659) (121,438) Unrecognized prior service cost 13,194 5,303 Unrecognized net transition asset (12,664) (13,970) --------- --------- Accrued liability recognized in the balance sheets 1,420 24,964 ======== ======== Postretirement Benefits 1996 1995 ----------------------- Actuarial present value of benefit obligation: Retirees and Dependents 29,321 28,054 Employees eligible to retire 5,480 3,869 Other employees 39,655 40,413 ------- ------- Accumulated benefit obligations 74,456 72,336 Less: Fair value of plan assets 18,674 16,656 Unrecognized net loss (gain) 2,849 3,464 Unrecognized transition obligation 6,575 9,807 ------- ------- Accrued liability recognized in the balance sheets 46,358 42,409 ====== ====== 19D ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. The weighted average rates assumed in the actuarial calculations were: 1996 1995 ---- ---- Discount 7.75% 7.25% Annual salary increase 5.25% 4.75% Long-term return on plan assets 8.5% 8.5% An additional assumption used in measuring the accumulated postretirement medical benefit obligation was a weighted average medical care cost trend rate of 9.25 percent for 1996 decreasing gradually to 5.75 percent through the year 2005 and remaining at that level thereafter. An annual increase in the assumed medical care cost trend rate of 1 percent would increase the accumulated medical benefit obligation at December 31, 1996, by $5.9 million and the aggregate of the service and interest cost components of the net retiree medical cost by $0.6 million. 19E ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. Components of the plans net costs are shown below: Pension 1996 1995 ---------------------- Benefits earned during the year 12,538 8,878 Interest cost on projected benefit obligation 18,031 17,484 Actual (return) loss on plan assets (44,746) (70,331) Net amortization and deferral 2,613 40,828 ------- ------- Net pension income (11,564) (3,141) ======= ====== Postretirement Benefits 1996 1995 ------------------------ Benefits earned during the year 2,216 2,441 Interest cost on accumulated benefit obligation 5,134 5,158 Amortization of transition obligation 405 1,317 Actual (return) loss on plan assets (2,015) (3,230) Net amortization and deferral 849 2,021 ------ ------ Net postretirement costs 6,589 7,707 ===== ===== Work Force Reduction Programs The Company has incurred additional costs for work force reduction programs. The costs related to these programs were $20 million and $1 million for 1996 and 1995, respectively. These costs were charged to income. 19F ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. 4. LONG-TERM OPERATING LEASES The Company leases various facilities and equipment under noncancelable operating lease arrangements. Rental expense under all operating leases was approximately $23,254,000 and $12,800,000 in 1996 and 1995, respectively. Future minimum lease payments under these noncancelable operating leases as of December 31, 1996 are as follows: 1997 30,144 1998 26,785 1999 19,329 2000 8,290 2001 6,275 Thereafter 37,095 ------- Total 127,918 5. LONG-TERM DEBT AND NOTES PAYABLE - OTHER Details of long-term debt and notes payable - other at December 31 are as follows: 1996 1995 ------ ----- (In Thousands) Long-term debt Notes payable: 4.62% due 1996 - 10,000 4.94% due 1997 15,000 15,000 -------- -------- 15,000 25,000 -------- -------- Less Current Maturities (15,000) (10,000) -------- -------- - 15,000 -------- -------- Capitalized lease obligations: 9 1/4% building lease 5,689 5,874 13% building lease 42,761 43,174 -------- -------- 48,450 49,048 -------- -------- Less Current Maturities (792) (598) -------- -------- 47,658 48,450 -------- -------- Total long-term debt 47,658 63,450 ======= ======= 19G ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. The Southern Company has guaranteed the payment of the above notes and the rental payments relating to the 13% building lease. Maturities over the next five years of the Company's long-term debt outstanding at December 31, 1996 are as follows: (In Thousands) 1997 15,792 1998 1,011 1999 1,259 2000 1,542 2001 1,862 Thereafter 41,984 ------ Total 63,450 ====== Assets acquired under capital leases are recorded in the Company's balance sheets as office building. The net book value of assets acquired under capitalized leases was approximately $26,688,179 and $28,572,000 at December 31, 1996 and 1995, respectively. In January 1994, Southern Company Services, Inc. sold to Orchard L.L.C. the office building located at 800 Shades Creek Parkway in Birmingham. The Company at that time entered into a four year operating lease with Orchard. Financial Instruments In accordance with Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial Instruments," all financial instruments of the Company - for which the carrying amount does not approximate fair value - are shown in the table below as of December 31: Long-Term Debt Carrying Fair Amount Value ------- ------ (In Millions) 1996 15.0 14.9 1995 25.0 24.8 The fair values for long-term debt were based on closing prices of comparable instruments. 6. PURCHASE COMMITMENTS The Company has purchase commitments for computer hardware and software. At December 31, 1996, future expenditures for these commitments are estimated to be approximately $3,600,000 in 1997. 20 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XV STATEMENT OF INCOME
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR - -------- ----------- ------------- ---------- INCOME 457 Services rendered to associate companies 506,928 378,677 458 Services rendered to nonassociate companies 31,893 70,665 421 Miscellaneous income or loss 3,179 2,890 ------- ------- Total Income 542,000 452,232 ------- ------- EXPENSE 920 Salaries and wages 230,023 181,613 921 Office supplies and expenses 66,950 62,037 922 Administrative expense transferred- credit - - 923 Outside services employed 115,690 107,105 924 Property insurance 748 1,139 925 Injuries and damages 101 269 926 Employee pensions and benefits 22,029 20,340 928 Regulatory commission expense 606 69 930.1 General advertising expenses - - 930.2 Miscellaneous general expenses 20,696 10,854 931 Rents 23,254 12,807 932 Maintenance of structures and equipment 22,118 16,520 403 Depreciation and amortization expense 16,922 17,971 408 Taxes other than income taxes 15,176 13,229 409 Income taxes 80 95 410 Provision for deferred income taxes - - 411 Provision for deferred income taxes - credit - - 411.5 Investment tax credit - - 426.1 Donations 1,014 661 426.5 Other deductions - - 427 Interest on long-term debt 6,296 6,630 430 Interest on debt to associate companies 231 149 431 Other interest expense 66 744 ------- ------- Total Expense 542,000 452,232 ------- ------- Net Income or (Loss) - - ======= =======
21 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) ANALYSIS OF BILLING ASSOCIATE COMPANIES ACCOUNT 457
DIRECT INDIRECT COMPENSAT'N TOTAL COSTS COSTS FOR USE AMOUNT NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED - ------------------------- ------- ------- ----------- ------- 457-1 457-2 457-3 The Southern Company 7,042 1,677 177 8,896 Alabama Power Company 100,705 28,792 1,683 131,180 Georgia Power Company 145,840 41,317 3,111 190,268 Gulf Power Company 26,416 6,949 353 33,718 Mississippi Power Company 26,621 7,873 358 34,852 Savannah Electric & Power Company 9,008 1,926 129 11,063 Southern Electric Generating Company 1,006 376 10 1,392 Southern Electric International, Inc. 6,667 2,430 136 9,233 Southern Development and Investment Group, Inc. 5,808 2,206 92 8,106 Southern Nuclear Operating Company 48,769 16,484 434 65,687 Southern Communication Services 10,437 1,689 87 12,213 Southern Electric Railroad 194 100 1 295 Southern Information Holding Co. - 1 - 1 Southern Telecommunications Holding Co. 12 12 - 24 -------- -------- ------ -------- TOTAL 388,525 111,832 6,571 506,928 ======= ======= ===== =======
22 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) ANALYSIS OF BILLING NONASSOCIATE COMPANIES ACCOUNT 458
DIRECT INDIRECT COMPENSATION EXCESS TOTAL COSTS COSTS FOR USE TOTAL OR AMOUNT NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED - ---------------------------- ------- ------- -------------- ----- ---------- ------ 458-1 458-2 458-3 458-4 Department of Energy (DOE) $18,367 $1,998 $ 15 $20,380 $ 0 $20,380 Electric Power Research Institute 4,934 536 4 5,474 0 5,474 Westinghouse 1,456 158 1 1,615 0 1,615 MindSpring 60 6 0 66 0 66 AT&T 15 2 0 17 0 17 Delta Com 29 3 0 32 0 32 Alcoa 24 3 0 27 0 27 MPX Systems 38 4 0 42 0 42 Interstate Fibernet 58 6 0 64 0 64 Bankers Trust Company (Southern System Master Retirement Trust) 495 54 0 549 0 549 VEBA-Alabama Power 6 1 0 7 0 7 Geothermal Heat Pump Consortium 5 1 0 6 0 6 Fleet Credit Corporation 15 2 0 17 0 17 Powerco Federal Credit Union 27 3 0 30 0 30 Florida Power & Light Co./Jacksonville Electric Authority/ City of Tallahassee/FPC 1,802 196 1 1,999 0 1,999 Oglethorpe Power Corporation 1,208 131 1 1,340 0 1,340 Southeastern Electric Reliability Council 32 3 0 35 0 35 Nonassociated Labor Accrual 162 18 0 180 0 180 Other (13 items less than $5,000) 12 1 0 13 0 13 ------- ------ --- ------- --- ----------- TOTAL $28,745 $3,126 $22 $31,893 $0 $31,893 ======= ====== === ======= == ======= INSTRUCTION: Provide a brief description of the services rendered to each nonassociate company: Department of Energy (DOE) - Contract services concerning clean coal technology; hot gas cleanup project, including construction of pilot test facility. Electric Power Research Institute - GNOCIS demonstrations, ash in agriculture and land reclamation; burner balancing; multimedia diesel clean-up at CT; Manages version 2.0 software enhancement; electrokinetic remediation; fine particulates and air toxic control; pinch study; arsenic remediation; advanced end-use technologies; bioremediation project; and bulk transmission system reliability evaluation. Westinghouse - Subcontracts for the research and design of components of nuclear reactors. MindSpring, AT&T, MPX Systems, Interstate Fibernet, and Delta Com - Telecommunication services related to fiber optics. Alcoa - Purchase of fiber optic cable. Bankers Trust Co. (Southern System Master Retirement Trust) - Trustee services provided by Bankers for Southern Company Master Retirement Trust. VEBA - Alabama Power - Short-term and Financial Services provided to Voluntary Employee Benefits Association. Geothermal Heat Pump Consortium - Geothermal Heat Pump Study. Fleet Credit Corporation - Financial services - Capital replacement services. Powerco Federal Credit Union - Telephone equipment and other resource usage. Oglethorpe Power - Operating and Planning Services (OPS) scheduling fees. FP&L, FPC, JEA, and City of Tallahassee - Unit Power Sales (UPS) agreements. Southeastern Electric Reliability Council - Occupancy and other related services.
23 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XVI ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND NONASSOCIATE COMPANIES
INSTRUCTION: Total cost of service will equal for associate and nonassociate companies the total amount billed under their separate analysis of billing schedules. ( ) Denotes red figure. ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL - -------------------- -------- -------- ----- -------- -------- ----- ------ -------- ----- 920 SALARIES AND WAGES $191,781 $31,680 $223,461 $ 6,224 $ 338 $ 6,562 $198,005 $32,018 $230,023 921 OFFICE SUPPLIES & EXPENSES 51,180 10,414 61,594 5,327 29 5,356 56,507 10,443 66,950 922 ADMINISTRATIVE EXP. TRANSFERRED-CREDIT - - - - - - - - - 923 OUTSIDE SERVICES EMPLOYED 94,776 7,267 102,043 13,640 7 13,647 108,416 7,274 115,690 924 PROPERTY INSURANCE 346 289 635 112 1 113 458 290 748 925 INJURIES AND DAMAGES 6 95 101 - - - 6 95 101 926 EMPLOYEE PENSIONS & BENEFITS 1,770 19,859 21,629 - 400 400 1,770 20,259 22,029 928 REGULATORY COMMISSION EXPENSE 606 - 606 - - - 606 - 606 930.1 GENERAL ADVERTISING EXPENSES - - - - - - - - - 930.2 MISCELLANEOUS GENERAL EXPENSES 13,989 1,681 15,670 3,364 1,662 5,026 17,353 3,343 20,696 931 RENTS 12,881 10,245 23,126 30 98 128 12,911 10,343 23,254 932 MAINTENANCE OF STRUCTURES AND EQUIPMENT 15,618 6,417 22,035 39 44 83 15,657 6,461 22,118 403 DEPRECIATION & AMORTIZATION EXPENSE 6,761 10,035 16,796 9 117 126 6,770 10,152 16,922 408 TAXES OTHER THAN INCOME TAXES 1,551 13,195 14,746 - 430 430 1,551 13,625 15,176 409 INCOME TAXES - 80 80 - - - - 80 80 410 PROVISION FOR DEFERRED INCOME TAXES - - - - - - - - - 411 PROVISION FOR DEFERRED INCOME TAXES CREDIT - - - - - - - - - 411.5 INVESTMENT TAX CREDIT - - - - - - - - - 426.1 DONATIONS 439 575 1,014 - - - 439 575 1,014 ------- ------- ------- ------ ----- ------ ------- ------- ------- SUBTOTAL EXPENSES = 391,704 111,832 503,536 28,745 3,126 31,871 420,449 114,958 535,407
23A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XVI ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND NONASSOCIATE COMPANIES ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL - -------------------- -------- ----------- ----- -------- --------- ----- ------ -------- ----- 427 INTEREST ON LONG-TERM DEBT - - 6,274 - - 22 - - 6,296 430 INTEREST ON DEBT TO ASSOCIATE COMPANIES - - 231 - - - - - 231 431 OTHER INTEREST EXPENSE - - 66 - - - - - 66 ------- -------- -------- ------- ------ ------- -------- ------- ------- TOTAL EXPENSES = 391,704 111,832 510,107 28,745 3,126 31,893 420,449 114,958 542,000 421 MISCELLANEOUS GAIN (3,179) - (3,179) - - - (3,179) - (3,179) -------- -------- -------- -------- ------ ------- -------- -------- -------- TOTAL COST OF SERVICE = $388,525 $111,832 $506,928 $28,745 $3,126 $31,893 $417,270 $114,958 $538,821 ======== ======== ======== ======= ====== ======= ======== ======== ========
24
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XVII SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION INSTRUCTION: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System Account) ( ) Denotes red figure. DEPARTMENT OR SERVICE FUNCTION Finance Human Total and Governmental Resources and Information DESCRIPTION OF ITEMS Amount Engineering Executive Accounting Affairs Administration Resources - -------------------- ------ ----------- --------- ---------- ------------ -------------- ---------- 920 SALARIES AND WAGES $230,023 $ 51,515 $3,592 $15,411 $1,150 $21,342 $ 68,093 921 OFFICE SUPPLIES AND EXPENSES 66,950 8,324 521 1,762 555 4,204 39,325 923 OUTSIDE SERVICES EMPLOYED 115,690 20,476 840 5,573 1,182 10,760 54,578 924 PROPERTY INSURANCE 748 62 3 24 1 31 102 925 INJURIES AND DAMAGES 101 27 - 7 - 9 32 926 EMPLOYEE PENSIONS & BENEFITS 22,029 4,800 128 1,406 82 2,121 6,559 928 REGULATORY COMMISSION EXPENSE 606 - - 2 - - - 930.2 MISCELLANEOUS GENERAL EXPENSES 20,696 383 369 914 463 9,051 7,315 931 RENTS 23,254 2,036 147 652 44 1,606 13,297 932 MAINTENANCE OF STRUCTURES & EQUIP 22,118 1,575 116 726 14 844 11,699 403 DEPRECIATION & AMORTIZATION EXPENSE 16,922 2,758 159 1,196 47 1,049 7,606 408 TAXES OTHER THAN INCOME TAXES 15,176 3,621 68 987 42 1,451 5,386 409 INCOME TAXES 80 - - - - - - 426.1 DONATIONS 1,014 - 328 3 179 22 2 427 INTEREST ON LONG-TERM DEBT 6,296 255 177 977 7 846 2,733 430 INTEREST ON DEBT TO ASSOCIATE CO. 231 31 2 9 1 16 86 431 OTHER INTEREST EXPENSE 66 (59) (3) (18) 2 (23) (138) -------- --------- -------- --------- -------- --------- ---------- TOTAL EXPENSES 542,000 95,804 6,447 29,631 3,769 53,329 216,675 421 MISCELLANEOUS GAIN (3,179) (186) (84) (384) (49) (691) (818) TOTAL COSTS $538,821 $95,618 $6,363 $29,247 $3,720 $52,638 $215,857 ======== ======= ====== ======= ====== ======= ========
25 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XVII SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION DEPARTMENT OR SERVICE FUNCTION Planning Research and ACCOUNT Internal Market Research Public Environmental System Administrative External NUMBER Audit and Support Production Relations Affairs Aircraft and General Affairs - ------- -------- ---------------- ---------- --------- -------------- -------- ----------- -------- 920 $5,587 $4,722 $27,448 $2,101 $ 6,381 $2,774 $17,406 $2,501 921 900 771 3,599 858 3,995 645 769 722 923 281 2,059 5,175 1,586 7,600 29 2,745 2,806 924 7 6 29 3 118 6 352 4 925 2 2 10 1 3 1 6 1 926 543 426 2,334 197 557 298 2,365 213 928 - 604 - - - - - - 930.2 278 (834) 453 137 375 89 1,654 49 931 485 224 1,105 109 129 64 3,219 137 932 141 157 1,246 60 80 3,644 1,652 164 403 158 318 1,684 210 233 1,257 89 158 408 384 315 1,720 134 404 197 322 145 409 - - - - - - 80 - 426.1 - - - 405 - - 9 66 427 154 231 310 86 (1) (28) 375 174 430 2 2 18 3 3 56 - 2 431 1 (5) (39) (5) 11 (105) 449 (2) ----- --------- ---------- --------- ---------- ------- ---------- --------- Expenses 8,923 8,998 45,092 5,885 19,888 8,927 31,492 7,140 421 (116) (117) (113) (76) (39) (6) (408) (92) TOTAL COSTS $8,807 $ 8,881 $44,979 $5,809 $19,849 $8,921 $31,084 $7,046 ====== ======= ======= ====== ======= ====== ======= ====== ( ) Denotes red figure.
26 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) DEPARTMENTAL ANALYSIS OF SALARIES ACCOUNT 920 DEPARTMENTAL SALARY EXPENSE NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL - ------------------ ------------------------------ ----------------------- Indicate each department TOTAL PARENT OTHER NON END OF or service function AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR ------ ------- ---------- ---------- ------ Engineering 51,515 36 48,348 3,131 631 Executive 3,592 612 2,980 - 6 Finance & Accounting 15,411 815 14,261 335 193 Governmental Affairs 1,150 21 1,129 - 9 Human Resources & Admin. 21,342 61 21,277 4 274 Information Resources 68,093 89 67,770 234 1,011 Internal Auditing 5,587 253 5,334 - 74 Planning Marketing Research & Support 4,722 14 4,707 1 54 Production 27,448 35 27,079 334 312 Public Relations 2,101 485 1,616 - 31 Research & Environmental Affairs 6,381 - 4,131 2,250 77 System Aircraft 2,774 311 2,463 - 45 External Affairs 17,406 545 16,861 - 41 Administrative & General 2,501 425 1,801 275 - ------- ----- ------- ----- --- TOTAL 230,023 3,702 219,757 6,564 2,758 ======= ===== ======= ===== =====
( ) Denotes red figure. 27
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OUTSIDE SERVICES EMPLOYED ACCOUNT 923 INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service. RELATIONSHIP "A"=ASSOCIATE DESCRIPTION OF "NA"= NON FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT - ------------------- --------------- ------------- ------- Legal Services Balch & Bingham Legal Services NA 2,865 Edison Electric Institute Industry Initiative NA 108 Troutman, Sanders Legal Services NA 2,685 Twenty-One Other Items (less than $100,000 paid to other than Associate Cos.) Aggregate NA 519 ------ 6,177 Auditing Service Arthur Andersen LLP Audit Services NA 692 Deloitte&Touche Consulting Consulting Services (Credit) NA (160) One Other Items (less than $100,000 paid to other than Associate Cos.) Aggregate NA 2 ------ 534 (Continued on Page 27A)
27A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OUTSIDE SERVICES EMPLOYED ACCOUNT 923 INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service. RELATIONSHIP "A"=ASSOCIATE DESCRIPTION OF "NA"= NON FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT - ------------------- --------------- ------------- ------ Engineering Services ABB C-E Services, Inc. Engineering Services NA 145 ADECCO Services Engineering, Personnel Serv. NA 227 Alabama Power Company Contract Engineering Serv. A 649 BE&K Engineering Co. Contract Engineering Serv. NA 4,484 Bechtel Power Corp. Contract Engineers-Constructors NA 4,467 Comprehensive Computer Consulting, Inc. Contract Programming NA 107 Cowin Equip. Co., Inc. Engineering Services NA 171 Industrial Filter&Pump Mfg. Power Systems Development-DOE NA 249 Radian Corporation Engineering Services NA 410 Rust International Corp. Labor Broker Agreement NA 186 Shook & Fletcher Insulation Co. Power Systems Development-DOE NA 354 Southern Research Institute Power Systems Development-DOE NA 589 Steel City Erection & Crane Power Systems Development-DOE NA 223 Treco Construction Services Power Systems Development-DOE NA 5,458 Warren Environment, Inc. Power Systems Development-DOE NA 121 Westinghouse Electric Corp. Contract Engineering Serv. NA 190 One Hundred Twenty-Seven Other Items (less than $100,000 paid to other than Associate Cos.) Aggregate 369 ----- 18,399 ------
(Continued on Page 27B) 27B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OUTSIDE SERVICES EMPLOYED ACCOUNT 923 INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service. RELATIONSHIP "A"=ASSOCIATE DESCRIPTION OF "NA"= NON FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT - ------------------ --------------- ------------ ------ Other Services Acme Printing, Co. Publication Services NA 200 Adia Services, Inc. On-site Clerical Serv. NA 2,372 ADP Proxy Services Mailing Services NA 188 Aerotek, Inc. Radio Services NA 216 Alabama Power Company Contract Services A 9,330 Alabama Staff Contract Personnel Serv. NA 200 America's Registry, Inc. Systems Development NA 1,051 Andersen Consulting LLP Consulting Services NA 27,936 Anderson Lithograph Publication Services NA 700 Aon Consulting Consulting Services NA 121 Application Tech. Serv. System Consulting Services NA 454 Arko Executive Serv., Inc. Security Services NA 234 Arthur Andersen LLP Consulting Services NA 280 AT&T Project Services NA 200 Bowne of Atlanta, Inc. Mail Services NA 265 Cambio Networks, Inc. Contract Services NA 235 Charles River Assoc. Incor Environmental Study NA 265 Comdisco Disaster Recovery Services Disaster Recovery Services NA 114 Comms People, Inc. Contract Services NA 452 Comprehensive Computer Consulting Contract Consulting NA 5,054 Computer Associated International Contract Services NA 319 Dataplex Corporation Microfiche Production NA 353 Deloitte&Touche Consulting Consulting Services NA 885 Dewey Ballantine Consulting Services NA 166 Drake Beam Morin, Inc. Personnel Services NA 475 (Continued on page 27C)
27C
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OUTSIDE SERVICES EMPLOYED ACCOUNT 923 INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service. RELATIONSHIP "A"=ASSOCIATE DESCRIPTION OF "NA"= NON FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT - ------------------- -------------- ------------ ------ Electric Pwr. Research Inst. Industry Studies NA 806 Elrick & Lavidge, Inc. Survey Services NA 470 Engineering Planning & Management Consulting Services NA 292 Ernst & Young Consulting Services NA 147 First Union National Bank Banking Services NA 437 Form Maker Software, Inc. Software Services NA 759 Georgia Power Company Project Support A 4,209 Gift Certificate Center Personnel Services NA 199 Griffith & Rogers Governmental Affairs NA 226 Gulf Power Company Project Support A 2,415 Hewitt Associates Personnel Services NA 3,879 Hogan & Hartson Consulting Services NA 122 Huthwaite, Inc. Consulting Services NA 100 Infodesign Group, Inc. Training Services NA 123 J. P. Morgan Securities,Inc. Financial Services NA 196 James W. Rock Consulting Services NA 103 Kercheval Engineers Microwave Consulting NA 211 Lehman Brothers Financial Services NA 129 Magi-Ware, Inc. Programming Services NA 107 Marketing & Planning Sys System Development NA 185 Merrill Lynch Asset Management Financial Services NA 764 Merrill Lynch Trust Co. Financial Services NA 408 Merrill Lynch Pierce, Fenner & Smith Financial Services NA 1,152 Microsoft Corp. Technology Planning Services NA 326 Mississippi Power Co. Project Support A 790 Moody's Investor Service Financial Services NA 156 New York Stock Exchange Financial Services NA 436 Paul Griffin & Assoc. Building Maintenance NA 111 Pony Express Courier Courier Services NA 100 Power Energy Services, Inc. Contract Engineering NA 237 Ray Bloch Productions, Inc. Production Services NA 628 Risk Advisory Risk Management Consulting NA 264 RR Donnelley Receivables, Inc. Financial Services NA 114 Rust International Corp. Personnel Services NA 137 (Continued on page 27D)
27D
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OUTSIDE SERVICES EMPLOYED ACCOUNT 923 INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service. RELATIONSHIP "A"=ASSOCIATE DESCRIPTION OF "NA"= NON FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT - ------------------- --------------- ------------- ------ Savannah Electric & Power Project Support A 648 Sawyer & Associates, Inc. Contract Programming NA 152 Scott, Madden & Assoc., Inc. Personnel Services NA 554 Shoreline Utility Advisors, Inc. Financial Services NA 209 Software Spectrum Software Upgrade Services NA 529 Southeast Power Corp. Construction Services NA 451 Southern Development & Investment Group Project Support A 126 Southern Research Institute Consulting Services NA 151 Summit Communications, Inc. Consulting Services NA 104 Systems Applications Intl Consulting Services NA 400 TATA Consultancy Services Systems Support NA 1,097 Technology Partners, Inc. Consulting Services NA 264 Teknecon, Inc. Consulting Services NA 363 The Hawthorn Group Survey Services NA 267 The Smith-Free Group Consulting Services NA 191 Southern Company Financial Services A 122 Towers Perrin Consulting Services NA 517 TQS Research, Inc. Consulting Services NA 289 Wells Fargo Guard Services Security Services NA 544 Windham Brannon Load Research Activities NA 123 Xerox Corporation Facilities Management NA 1,121 120 Items Others Under $100,000 NA 9,555 -------- 90,580 ------- 115,690 =======
28 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) EMPLOYEE PENSIONS AND BENEFITS ACCOUNT 926 INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000. DESCRIPTION AMOUNT - ---------- ------ Pensions (437) Early Retirement Benefits 764 Employees' Group Insurance 8,315 Post Retirement Medical Benefits 4,590 Post Retirement Life Benefits 2,050 Educational Assistance Plan 237 Minority Scholarship Program 53 Employee Savings Plan/ESOP - Company Contribution 6,223 Employee Health and Physical Examinations 107 Post Employment Benefits (53) Other (Employees' Professional Fees and Other Employee Fringe Benefits) 180 ----- TOTAL 22,029 ====== 29 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) GENERAL ADVERTISING EXPENSES ACCOUNT 930.1 INSTRUCTIONS: Provide a listing of the amount included in Account 930.1, "General Advertising Expenses", classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto. DESCRIPTION NAME OF PAYEE AMOUNT - ------------ ------------- ------ NOT APPLICABLE 30 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) MISCELLANEOUS GENERAL EXPENSES ACCOUNT 930.2 INSTRUCTIONS: Provide a list of the amount included in Account 930.2, "Miscellaneous General Expenses", classifying the items according to their nature. Payments and expenses permitted by Section 321 (b) (2) of the Federal Election Campaign Act, as amended by Public Law 94-284 in 1976 (2 U.S.C.S. 441 (b) (2) shall be separately classified. DESCRIPTION AMOUNT - ----------- ------ Employee Training 7,734 Expenses of SCS Employees Located at Operating Co. 6,316 Meals, Lodging, & Incidentals Related to Meetings & Conferences 3,626 Dues and Memberships 937 Recruiting, Interviewing, & Placement of Employees 282 Corporate Moving Expenses 88 Other General Expenses 1,713 ------ TOTAL 20,696 ====== 31 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) RENTS ACCOUNT 931 INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents", classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts. DESCRIPTION AMOUNT - ----------- ------ Office Rents 14,995 Computer and Other Data Processing Equipment Rental 4,451 Software Rental 2,721 All Other (Automobile, Office Furniture & Equipment, and Miscellaneous Storage & Equipment Rental) 1,087 ------ TOTAL 23,254 ====== 32 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) TAXES OTHER THAN INCOME TAXES ACCOUNT 408 INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income Taxes". Separate the analysis into two groups: (1) other than U.S. Government taxes, and (2) U.S. Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax. KIND OF TAX AMOUNT - ----------- ----- Other Than U.S. Government Taxes State Unemployment 101 City/Business License Tax 15 Property and Other City and State 1,465 ------- Subtotal - Other 1,581 ------- U.S. Government Taxes Federal Insurance Contributions Act 13,395 Federal Unemployment 200 ------ Subtotal - U.S. Government 13,595 ------ TOTAL 15,176 ====== 33
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) DONATIONS ACCOUNT 426.1 INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations", classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details. NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT - ----------------- ------------------- ------ 280 Shades Creek Project Civic & Charitable 15 Alabama, University of Employee Matching Gift 12 American Heart Association Civic & Charitable 3 American Legislative Exchange Support of Program 14 Atlanta Chamber Foundation Civic & Charitable 50 Atlanta Classic Foundation Civic & Charitable 7 Auburn University Foundation Employee Matching Gift 5 Boy Scouts of America Civic & Charitable 9 Business Institute for Political Analysis Support of Program 5 Cahaba Girl Scout Council Civic & Charitable 17 Callanwolde Fine Arts Center Civic & Charitable 5 Center for Legislative Energy & Environmental Research Support of Program 8 Center Street Middle School Civic & Charitable 4 City Stages - Birmingham Festival Civic & Charitable 5 Eisenhower Center Building Fund Civic & Charitable 115 Georgia Center for Advanced Telecommunications Civic & Charitable 3 Georgia Institute of Technology Employee Matching Gift 16 Georgia Youth Science & Technology Center Civic & Charitable 15 Hayes, Domenici & Associates Civic & Charitable 55 Index Research & Advisory Services Civic & Charitable 63 Junior Achievement of Greater B'Ham Civic & Charitable 4 Juvenile Diabetes Foundation Civic & Charitable 25 Kennedy Center for Performing Arts Civic & Charitable 5 Literacy Council of Central Alabama Civic & Charitable 5 March of Dimes Civic & Charitable 21 Metropolitan Development Board Civic & Charitable 10
33A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) DONATIONS ACCOUNT 426.1 INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations", classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details. NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT - ------------------ ------------------- ----- National Wild Turkey Federation Civic & Charitable 5 Public Affairs Council Civic & Charitable 3 Republican Senate/House Dinner Building Fund Support of Program 40 Smithsonian Institution Civic & Charitable 8 Southern Governor's Association Support of Program 5 Taste of the South Support of Program 10 The Coalition Support of Program 50 The College Fund/UNCF Civic & Charitable 4 The King Center Civic & Charitable 4 The National Coal Council Support of Program 11 The Nature Conservancy Civic & Charitable 15 The Progress & Freedom Foundation Civic & Charitable 60 United States Energy Association Support of Program 3 United Way Civic & Charitable 194 Washington Legal Foundation Civic & Charitable 5 Woodruff Arts Center Civic & Charitable 10 57 Other Items (Less than $3,000) Civic & Charitable 54 74 Other Items (Less than $3,000) Employee Matching Gift 31 5 Other Items (Less than $3,000) Support of Program 6 ----- TOTAL 1,014 ======
34 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) OTHER DEDUCTIONS ACCOUNT 426.5 INSTRUCTIONS: Provide a listing of the amount included in Account 426.5, "Other Deductions", classifying such expenses according to their nature. DESCRIPTION NAME OF PAYEE AMOUNT - ----------- ------------- ------ NOT APPLICABLE 35 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XVIII NOTES TO STATEMENT OF INCOME INSTRUCTIONS: The space below is provided for important notes regarding the statement of income or any account thereof. Furnish particulars as to any significant increase in services rendered or expenses incurred during the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference. See Notes to Financial Statements on Pages 19 - 19G. 36 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 (Thousands of Dollars) SCHEDULE XIX FINANCIAL DATA SCHEDULE Net Service Company Property 124,487 Total Investments 3,925 Total Current and Accrued Assets 139,686 Total Deferred Debits 6,851 Balancing Amount for Total Assets and Other Debits - Total Assets and Other Debits 274,949 Total Proprietary Capital 875 Total Long-Term Debt 47,658 Notes Payable 15,792 Notes Payable to Associate Companies - Balancing Amount for Total Current and Accrued Liabilities 132,051 Total Deferred Credits 78,573 Accumulated Deferred Income Tax Credits - Total Liabilities and Proprietary Capital 274,949 Services Rendered to Associate Companies 506,928 Services Rendered to Nonassociate Companies 31,893 Miscellaneous Income or Loss 3,179 Total Income 542,000 Salaries and Wages 230,023 Employee Pensions and Benefits 22,029 Balancing Amount for Total Expenses 289,948 Total Expenses 542,000 Net Income (Loss) - Total Cost of Service (Direct Costs) 417,270 Total Cost of Service (Indirect Costs) 114,958 Total Cost of Service (Total) 538,821 Number of Personnel End of Year 2,758 37
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. ORGANIZATION CHART Chairman, President & CEO Southern Company President & CEO Southern Co. Serv. VP -Human Sr. VP- Director Exec. VP- Sr. Exec. VP- Sr. VP- Resources(1) External Internal Finance(2) Chief Production System Trans. Affairs(2) Auditing(1) Planning & Oper Exec. VP Sr. VP- VP Corp. VP-Fin. Engineering Chief Information Communications(1) Planning Officer VP Research & VP-Governmental Treasurer Environmental Sr. VP- Affairs Affairs So. Wholesale Director Energy VP-Enviro. Short-Term VP Procurement Policy Finance & Materials VP Marketing & New Business VP-Secretary Director VP Fuel Development & House Risk Services Counsel Management VP-Comptroller Director & CFO System Planning
(1) Report to the President & CEO of SCS for SES related matters only. (2) Direct reports to Chairman, President & CEO of Southern Company. 38 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 METHODS OF ALLOCATION The allocation statistics for each of the methods described below were calculated using a three-year rolling average with a one-year lag in implementation; i.e., the 1996 ratios used the average annual statistics for the years 1992, 1993, and 1994. 1. Annual Operating Area Territorial Load Basis Each Client Operating Company, other than Southern Electric Generating Company (SEGCO), will be charged that percentage of the total Service Company charges to be distributed by this method which its annual operating area territorial load is of the total annual operating area territorial load of the Southern electric system, defined as total energy generated plus energy received minus energy deliveries to exclude loads and include all Southeastern Power Administration (SEPA) Preference Customer loads (exclusive of the direct SEPA-Crisp County component), as well as loads served jointly by Georgia Power Company and Oglethorpe Electric Membership Corporation, Municipal Electric Association of Georgia (MEAG), and City of Dalton through the aforesaid companies joint ownership of generating facilities with Georgia Power Company. The MEAG component includes any component for Crisp County under the provisions of the MEAG-Crisp County Agreement. Excluded areas are such as those of South Mississippi Electric Power Association, Alabama Electric Cooperative, Tennessee Valley Authority, Florida Power Corporation, etc. 2. Customer Basis Each Client Operating Company, other than SEGCO, will be charged that percentage of the total Service Company charges to be distributed by this method which its average number of customers is to the total average number of customers of the Southern electric system, other than SEGCO. 3. Employee Basis Each Client Company, other than SEGCO, will be charged that percentage of the total Service Company charges to be distributed by this method which its average number of employees is of the total average number of employees of all Client Companies, other than SEGCO. 4. Direct Billing Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its applicable Service Company direct billings is to the total Service Company direct billings. 38A ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 METHODS OF ALLOCATION 5. Financial Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its average of the percentages of net fixed assets, operating expenses and operating revenue sources is to the total Client Company net fixed assets, operating expenses and operating revenue of the Southern electric system. 6. Fossil Fuel Generation Basis Each Client Operating Company will be charged that percentage of the total Service Company charges to be distributed by this method which its generation from fossil fuel sources is to the total generation from fossil fuel sources of the Southern electric system. 7. Fossil and Hydro Capacity Basis Each Client Company will be charged the factor determined by dividing the total fossil and hydro generating capacity for each company, including capacity attributed to joint owners of system plants, by the total fossil and hydro generating capacity for the Southern electric system. 8. Insurance Premium Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its applicable insurance premiums is to the total applicable insurance premiums of the Southern electric system. 9. Net Fixed Assets Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its net fixed assets is to the total net fixed assets of the Southern electric system. 10. Number of Nuclear Plants Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its number of nuclear plants is to the total nuclear plants. 11. Number of Vehicles Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its number of vehicles is to the total vehicles for the Southern electric system. 38B ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 METHODS OF ALLOCATION 12. Nuclear Plant Capacity Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its name plate kilowatt capacity of nuclear plants is to the total kilowatt capacity of all nuclear plants. 13. Nuclear Plant Generation Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its net generation of nuclear plants is to the total net generation of all nuclear plants. 14. Preferred Stockholder Basis Each Client Company will be charged that percentage of the total Service Company charges to be distributed by this method which its number of preferred stockholders is to the total preferred stockholders for the Southern electric system. 15. Salary Basis The ratio of all applicable work orders for the appropriate division, department, groups of departments or other cost centers that incur salary charges per month. The larger the amount of salary charges to a direct work order, the larger the amount that work order will receive in the allocation. 16. Southern System Basis This method will be applicable only to charges for services which relate to Southern and other Client Companies. Each Client Company will be charged for the charges to be distributed by this method in the ratio of such Client Company's total capitalization to the sum of the total capitalization of all Client Operating Companies. 17. System Aircraft Passengers on system aircraft are charged a rate based on comparable, non-discounted commercial fares for the itinerary flown. Residual expenses not billed to client companies through the commercial fares are allocated to all associate companies as an availability fee based on the number of executives at each company. 39 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED The following annual statement was supplied to each associate client company regarding interest billed for compensation of equity capital and borrowed capital in 1996: Pursuant to the amended Uniform System of Accounts for Mutual and Subsidiary Service Companies implemented in January 1980, Southern Company Services is required to submit an annual statement to its associate client companies stating the amount and calculation of interest billed for compensation of equity capital and borrowed capital. Southern Company Services does not bill its associate client companies for compensation of equity capital. In 1996, Southern Company Services initiated short-term borrowings exclusively from The Southern Company; other outside banking institutions were not used. The interest rates on these borrowings ranged from 5.331% to 6.300%. Interest in the amount of $230,646.36 was accrued on The Southern Company and was billed to the client companies. The interest was distributed to each company either on the appropriate fixed percentage allocation basis or on the salary allocation basis in accordance with the SEC orders and our service contracts. In addition, as of December 31, 1996, Southern Company Services had long-term debt outstanding from various institutions in the amounts of $63,449,564.65. The interest rates on these borrowings ranged from 4.62% to 13.0%. Interest of $6,361,435.73 was accrued and billed to the client companies. The interest was distributed to each company either on the appropriate fixed percentage allocation basis or on the salary allocation basis in accordance with the SEC orders and service contracts. The interest on total service company indebtedness was billed to the associate and nonassociate companies as follows: The Southern Company $ 177,232.51 Alabama Power Company 1,683,545.28 Georgia Power Company 3,111,032.15 Gulf Power Company 352,921.20 Mississippi Power Company 357,475.32 Savannah Electric & Power Company 128,809.89 Southern Electric Generating Company 10,180.13 Southern Electric International, Inc. 135,644.49 Southern Nuclear Operating Company 433,561.40 Southern Development & Investment Group, Inc.91,517.32 Southern Communications Services, Inc. 87,301.37 Southern Electric Railroad Company 868.78 Southern Telecommunications Holding Co. 369.47 Southern Information Holding Co. 47.69 Nonassociate 21,575.09 ------------- $6,592,082.09 ============= 40 ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC. For the Year Ended December 31, 1996 SIGNATURE CLAUSE Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized. Southern Company Services, Inc. (Name of Reporting Company) By: (Signature of Signing Officer) /s/ W. Dean Hudson W. Dean Hudson, Vice President, Comptroller and Chief Financial Officer (Printed Name and Title of Signing Officer) Date: April 28, 1997 -----END PRIVACY-ENHANCED MESSAGE-----