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<!-- Begin Block Tagged Note 11 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11. DERIVATIVES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company, the traditional operating companies, and Southern Power are exposed to market
risks, primarily commodity price risk, interest rate risk, and occasionally foreign currency risk.
To manage the volatility attributable to these exposures, each company nets its exposures, where
possible, to take advantage of natural offsets and enters into various derivative transactions for
the remaining exposures pursuant to each company’s policies in areas such as counterparty exposure
and risk management practices. Each company’s policy is that derivatives are to be used primarily
for hedging purposes and mandates strict adherence to all applicable risk management policies.
Derivative positions are monitored using techniques including, but not limited to, market
valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are
recognized at fair value in the balance sheets as either assets or liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Energy-Related Derivatives</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The traditional operating companies and Southern Power enter into energy-related derivatives to
hedge exposures to electricity, gas, and other fuel price changes. However, due to cost-based rate
regulations and other various cost recovery mechanisms, the traditional operating companies have
limited exposure to market volatility in commodity fuel prices and prices of electricity. Each of
the traditional operating companies manages fuel-hedging programs, implemented per the guidelines
of their respective state PSCs, through the use of financial derivative contracts. Certain of the
traditional operating companies have recently started using significantly more financial options
per the guidelines of their respective PSCs, which is expected to continue to mitigate price
volatility. Southern Power has limited exposure to market volatility in commodity fuel prices and
prices of electricity because its long-term sales contracts shift substantially all fuel cost
responsibility to the purchaser. However, Southern Power has been and may continue to be exposed
to market volatility in energy-related commodity prices as a result of sales of uncontracted
generating capacity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">To mitigate residual risks relative to movements in electricity prices, the electric utilities may
enter into physical fixed-price or heat rate contracts for the purchase and sale of electricity
through the wholesale electricity market. To mitigate residual risks relative to movements in gas
prices, the electric utilities may enter into fixed-price contracts for natural gas purchases;
however, a significant portion of contracts are priced at market.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Energy-related derivative contracts are accounted for in one of three methods:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Regulatory Hedges </i>– Energy-related derivative contracts which are designated as regulatory
hedges relate primarily to the traditional operating companies’ fuel hedging programs, where
gains and losses are initially recorded as regulatory liabilities and assets, respectively,
and then are included in fuel expense as the underlying fuel is used in operations and
ultimately recovered through the respective fuel cost recovery clauses.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Cash Flow Hedges </i>– Gains and losses on energy-related derivatives designated as cash flow
hedges which are mainly used to hedge anticipated purchases and sales and are initially
deferred in OCI before being recognized in the statements of income in the same period as the
hedged transactions are reflected in earnings.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Not Designated </i>– Gains and losses on energy-related derivative contracts that are not
designated or fail to qualify as hedges are recognized in the statements of income as
incurred.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Some energy-related derivative contracts require physical delivery as opposed to financial
settlement, and this type of derivative is both common and prevalent within the electric industry.
When an energy-related derivative contract is settled physically, any cumulative unrealized gain or
loss is reversed and the contract price is recognized in the respective line item representing the
actual price of the underlying goods being delivered.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the net volume of energy-related derivative contracts for power and natural
gas positions for the Southern Company system, together with the longest hedge date over which it
is hedging its exposure to the variability in future cash flows for forecasted transactions and the
longest date for derivatives not designated as hedges, were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="8%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center" colspan="9" style="border-bottom: 1px solid #000000"><b>Power</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Gas</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Net</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center"><b>Net Sold</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Non-Hedge</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Purchased</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Non-Hedge</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Megawatt-hours</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Date</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Date</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>mmBtu*</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Date</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Date</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td align="center">
<div style="margin-left:15px; text-indent:-15px">1
</div></td>
<td> </td>
<td align="center" colspan="3">2011</td>
<td> </td>
<td align="center" colspan="3">2011</td>
<td> </td>
<td align="center" colspan="3">149</td>
<td> </td>
<td align="center" colspan="3">2015</td>
<td> </td>
<td align="center" colspan="3">2015</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div style="margin-top: 3pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>million British thermal units</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition to the volumes discussed in the tables above, the traditional operating companies
and Southern Power enter into physical natural gas supply contracts that provide the option to sell
back excess gas due to operational constraints. The expected volume of natural gas subject to such
a feature is 4 million mmBtu.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For cash flow hedges, the amounts expected to be reclassified from OCI to revenue and fuel expense
for the next 12-month period ending December 31, 2011 are immaterial for Southern Company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Interest Rate Derivatives</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company and certain subsidiaries also enter into interest rate derivatives to hedge
exposure to changes in interest rates. The derivatives employed as hedging instruments are
structured to minimize ineffectiveness. Derivatives related to existing variable rate securities or
forecasted transactions are accounted for as cash flow hedges where the effective portion of the
derivatives’ fair value gains or losses is recorded in OCI and is reclassified into earnings at the
same time the hedged transactions affect earnings with any ineffectiveness recorded directly to
earnings. Derivatives related to existing fixed rate securities are accounted for as fair value
hedges, where the derivatives’ fair value gains or losses and hedged items’ fair value gains or
losses are both recorded directly to earnings, providing an offset with any difference representing
ineffectiveness.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the following interest rate derivatives were outstanding:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gain (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Notional</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Interest Rate</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Interest Rate</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Hedge</b> <b>Maturity</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Received</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Paid</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Date</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td colspan="7" align="left"><b><i>Cash flow hedges of existing debt</i></b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">300</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom" nowrap="nowrap">3-month LIBOR +<br />0.40% spread</td>
<td> </td>
<td align="center" colspan="3">1.24%*</td>
<td> </td>
<td align="center" valign="bottom">October 2011</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td colspan="7" align="left"><b><i>Fair value hedges of existing debt</i></b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">350</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">4.15%</td>
<td> </td>
<td colspan="3" align="center" nowrap="nowrap">3-month LIBOR +<br />1.96%* spread</td>
<td> </td>
<td align="center" valign="bottom">May 2014</td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000; border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">650</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 3px double #000000"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000; border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div style="margin-top: 3pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Weighted Average</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended December 31, 2010, the Company had realized net gains of $2 million upon
termination of certain interest rate derivatives at the same time the related debt was issued. The
effective portion of these gains has been deferred in OCI and is being amortized to interest
expense over the life of the original interest rate derivative, reflecting the period in which the
forecasted hedged transaction affects earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Subsequent to December 31, 2010, Alabama Power entered into forward-starting interest rate swaps to
mitigate exposure to interest rate changes related to an anticipated debt issuance. The notional
amount of the swaps totaled $200 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The estimated pre-tax losses that will be reclassified from OCI to interest expense for the next
12-month period ending December 31, 2011 is $17 million. The Company has deferred gains and losses
that are expected to be amortized into earnings through 2037.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Foreign Currency Derivatives</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company and certain subsidiaries may enter into foreign currency derivatives to hedge
exposure to changes in foreign currency exchange rates arising from purchases of equipment
denominated in a currency other than U.S. dollars. Derivatives related to a firm commitment in a
foreign currency transaction are accounted for as a fair value hedge where the derivatives’ fair
value gains or losses and the hedged items’ fair value gains or losses are both recorded directly
to earnings. Derivatives related to a forecasted transaction are accounted for as a cash flow
hedge where the effective portion of the derivatives’ fair value gains or losses is recorded in OCI
and is reclassified into earnings at the same time the hedged transactions affect earnings. Any
ineffectiveness is recorded directly to earnings. The derivatives employed as hedging instruments
are structured to minimize ineffectiveness.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the following foreign currency derivatives were outstanding:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Value</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Gain (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Notional</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Hedge Maturity</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Forward Rate</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b> Date</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td colspan="5" align="left"><b><i>Cash flow hedges of forecasted transactions</i></b></td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="center" valign="top">YEN82</td>
<td> </td>
<td align="center" valign="bottom">85.326 Yen per <br />
Dollar*</td>
<td> </td>
<td align="center" valign="top" nowrap="nowrap">Various through May 2011</td>
<td> </td>
<td align="left" valign="top">$</td>
<td align="right" valign="top">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td colspan="5" align="left"><b><i>Fair value hedges of firm commitments</i></b></td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="center" valign="top">EUR41.1</td>
<td> </td>
<td align="center" valign="bottom" nowrap="nowrap">1.256 Dollars per <br />
Euro*</td>
<td> </td>
<td align="center" valign="top" nowrap="nowrap">Various through July 2012</td>
<td> </td>
<td> </td>
<td align="right" valign="top">3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="2" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000; border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="2" align="left" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000; border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div style="margin-top: 3pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">*</td>
<td> </td>
<td>Weighted Average</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Derivative Financial Statement Presentation and Amounts</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010 and 2009, the fair value of energy-related derivatives, interest rate
derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="35%"> </td>
<td width="5%"> </td>
<td width="10%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="12%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td colspan="8" nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">            <b>Asset Derivatives</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td colspan="9" nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">            <b>Liability Derivatives</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"><b>Balance Sheet</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Balance Sheet</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Derivative Category</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as hedging instruments for regulatory purposes</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives:
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>4</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">1</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left" nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Liabilities from risk <br />management activities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>145</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">111</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Other deferred<br />charges and assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>3</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred credits and liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>55</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">66</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total derivatives designated as hedging instruments for regulatory purposes</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>7</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">2</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>200</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">177</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as hedging instruments in cash flow and fair value hedges</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives:
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>—</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">3</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Liabilities from risk management activities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>1</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">5</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Interest rate derivatives:
</div></td>
<td> </td>
<td align="left">Other current assets
</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>6</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Liabilities from risk management activities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>1</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">6</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred charges and assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>4</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred credits and liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>—</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Foreign currency derivatives:
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>2</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Liabilities from risk management activities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>—</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred charges and assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>1</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred credits and liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>—</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total derivatives designated as hedging instruments in cash flow and fair value hedges</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>13</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">6</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>2</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">11</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as hedging instruments</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives:
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>2</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">2</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Liabilities from risk management activities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>5</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">3</td>
<td nowrap="nowrap"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred charges and assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>1</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left">
<div style="margin-left:15px; text-indent:-15px">Other deferred credits and liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>—</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">—</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total derivatives not designated as hedging instruments</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>3</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">2</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>5</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">3</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>23</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">10</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>207</b></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">191</td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">All derivative instruments are measured at fair value. See Note 10 for additional
information.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010 and 2009, the pre-tax effect of unrealized derivative gains (losses) arising
from energy-related derivative instruments designated as regulatory hedging instruments and
deferred on the balance sheets was as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="35%"> </td>
<td width="5%"> </td>
<td width="10%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="12%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="9" style="border-bottom: 1px solid #000000"><b>Unrealized Losses</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="9" style="border-bottom: 1px solid #000000"><b>Unrealized Gains</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"><b>Balance Sheet</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"><b>Balance Sheet</b></td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"> </td>
<td style="border-bottom: 0px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Derivative Category</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives:
</div></td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:15px; text-indent:-15px">Other regulatory assets, current
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>(145</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(111</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:15px; text-indent:-15px">Other regulatory liabilities, current
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>4</b></td>
<td nowrap="nowrap" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">1</td>
<td nowrap="nowrap" valign="top"> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"> 
</div></td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Other regulatory <br />assets, deferred
</div></td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right"><b>(55</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(66</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Other regulatory <br />liabilities, deferred
</div></td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right"><b>3</b></td>
<td nowrap="nowrap" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right">1</td>
<td nowrap="nowrap" valign="top"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" valign="top" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:0px; text-indent:-0px"><b>Total energy-related derivative gains (losses)</b>
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top"><b>$</b></td>
<td align="right" valign="top"><b>(200</b></td>
<td nowrap="nowrap" valign="top"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top">$</td>
<td align="right" valign="top">(177</td>
<td nowrap="nowrap" valign="top">)</td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top"><b>$</b></td>
<td align="right" valign="top"><b>7</b></td>
<td nowrap="nowrap" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right" valign="top">$</td>
<td align="right" valign="top">2</td>
<td nowrap="nowrap" valign="top"> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="21" valign="top" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the twelve months ended December 31, 2010, the pre-tax gains from interest rate
derivatives designated as fair value hedging instruments on Southern Company’s statement of income
were $10 million. This amount was offset with changes in the fair value of the hedged debt.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the twelve months ended December 31, 2010, the pre-tax gains from foreign currency derivatives
designated as fair value hedging instruments on Southern Company’s statement of income were $3
million. These amounts were offset with changes in the fair value of the purchase commitment
related to equipment purchases.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the years ended December 31, 2010, 2009, and 2008, the pre-tax effect of derivatives designated
as cash flow hedging instruments on the statements of income was as follows:
</div>
<div align="center">
<table style="font-size: 9pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11"><b>Gain (Loss) Recognized in</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="13"><b>Gain (Loss) Reclassified from Accumulated OCI into Income</b></td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Derivatives in Cash Flow</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11"><b>OCI on Derivative</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="13" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Hedging Relationships</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Derivative Category</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Statements of Income Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td>
<td> </td>
<td nowrap="nowrap" align="center"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="12"><i>(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:15px; text-indent:-15px">Energy-related derivatives
</div></td>
<td valign="top"> </td>
<td align="right" valign="top"><b>$</b></td>
<td align="right" valign="top"><b>1</b></td>
<td valign="top"> </td>
<td valign="top"> </td>
<td nowrap="nowrap" align="right" valign="top">$</td>
<td align="right" valign="top">(2</td>
<td nowrap="nowrap" valign="top">)</td>
<td valign="top"> </td>
<td nowrap="nowrap" align="right" valign="top">$</td>
<td align="right" valign="top">(1</td>
<td nowrap="nowrap" valign="top">)</td>
<td> </td>
<td align="left" valign="bottom">Fuel</td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td valign="top">
<div style="margin-left:15px; text-indent:-15px">Interest rate derivatives
</div></td>
<td valign="top"> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right" valign="top"><b>(3</b></td>
<td nowrap="nowrap" valign="top"><b>)</b></td>
<td valign="top"> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right" valign="top">(5</td>
<td nowrap="nowrap" valign="top">)</td>
<td valign="top"> </td>
<td nowrap="nowrap" align="right" valign="top"> </td>
<td align="right" valign="top">(47</td>
<td nowrap="nowrap" valign="top">)</td>
<td> </td>
<td align="left" valign="bottom">
<div style="margin-left:15px; text-indent:-15px">Interest expense, net of amounts
capitalized
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>(25</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(19</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td valign="top">
<div style="margin-left:15px; text-indent:-15px">Foreign currency derivatives
</div></td>
<td valign="top"> </td>
<td valign="top"> </td>
<td align="right" valign="top"><b>1</b></td>
<td valign="top"> </td>
<td valign="top"> </td>
<td valign="top"> </td>
<td align="right" valign="top">—</td>
<td valign="top"> </td>
<td valign="top"> </td>
<td valign="top"> </td>
<td align="right" valign="top">—</td>
<td valign="top"> </td>
<td> </td>
<td align="left" valign="bottom">
<div style="margin-left:15px; text-indent:-15px">Other operations and
maintenance
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="27" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>(1</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(48</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left" valign="bottom"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>(24</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(19</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="27" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">There was no material ineffectiveness recorded in earnings for any period presented.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the years ended December 31, 2010, 2009, and 2008, the pre-tax effect of energy-related
derivatives not designated as hedging instruments on the statements of income was as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td><b>Derivatives not Designated</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="13" style="border-bottom: 1px solid #000000"><b>Unrealized Gain (Loss) Recognized in Income</b></td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>as Hedging Instruments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Derivative Category</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000" nowrap="nowrap"><b>Statements of Income Location</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
</tr>
<tr style="font-size: 9pt" valign="bottom">
<td nowrap="nowrap" align="left"> </td>
<td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Energy-related derivatives:
</div></td>
<td> </td>
<td align="left" valign="top">Wholesale revenues</td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>(2</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td align="right">$</td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top">Fuel</td>
<td> </td>
<td> </td>
<td align="right"><b>1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top">Purchased power</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right"><b>(1</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(2</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="15" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" align="right"><b>$</b></td>
<td align="right"><b>(2</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="15" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Contingent Features</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not have any credit arrangements that would require material changes in payment
schedules or terminations as a result of a credit rating downgrade. There are certain derivatives
that could require collateral, but not accelerated payment, in the event of various credit rating
changes of certain Southern Company subsidiaries. At December 31, 2010, the fair value of
derivative liabilities with contingent features was $40 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the Company had no collateral posted with its derivative counterparties. The
maximum potential collateral requirement arising from the credit-risk-related contingent features,
at a rating below BBB- and/or Baa3, is $40 million. Generally, collateral may be provided by a
Southern Company guaranty, letter of credit, or cash. Included in these amounts are certain
agreements that could require collateral in the event that one or more Southern Company system
power pool participants has a credit rating change to below investment grade.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Notefalsefalsefalsefalsefalse | Otherus-types:textBlockItemTypestringThis element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
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12DerivativesUnKnownUnKnownUnKnownUnKnownfalsetrue