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<div align="left" style="font-family: 'Times New Roman',Times,serif">   <div align="left"> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>General</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Southern Company (the Company) is the parent company of four traditional operating companies, Southern Power Company (Southern Power), Southern Company Services, Inc. (SCS), Southern Communications Services, Inc. (SouthernLINC Wireless), Southern Company Holdings, Inc. (Southern Holdings), Southern Nuclear Operating Company, Inc. (Southern Nuclear), and other direct and indirect subsidiaries. The traditional operating companies – Alabama Power Company (Alabama Power), Georgia Power Company (Georgia Power), Gulf Power Company (Gulf Power), and Mississippi Power Company (Mississippi Power) – are vertically integrated utilities providing electric service in four Southeastern states. Southern Power constructs, acquires, owns, and manages generation assets and sells electricity at market-based rates in the wholesale market. SCS, the system service company, provides, at cost, specialized services to Southern Company and its subsidiary companies. SouthernLINC Wireless provides digital wireless communications for use by Southern Company and its subsidiary companies and also markets these services to the public and provides fiber cable services within the Southeast. Southern Holdings is an intermediate holding company subsidiary for Southern Company’s investments in leveraged leases. Southern Nuclear operates and provides services to Southern Company’s nuclear power plants. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The financial statements reflect Southern Company’s investments in the subsidiaries on a consolidated basis. The equity method is used for entities in which the Company has significant influence but does not control and for variable interest entities where the Company has an equity investment, but is not the primary beneficiary. All material intercompany transactions have been eliminated in consolidation. Certain prior years’ data presented in the financial statements have been reclassified to conform to the current year presentation. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The traditional operating companies, Southern Power, and certain of their subsidiaries are subject to regulation by the Federal Energy Regulatory Commission (FERC) and the traditional operating companies are also subject to regulation by their respective state public service commissions (PSC). The companies follow generally accepted accounting principles (GAAP) in the U.S. and comply with the accounting policies and practices prescribed by their respective commissions. The preparation of financial statements in conformity with GAAP requires the use of estimates, and the actual results may differ from those estimates. </div>   </div>  <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>Regulatory Assets and Liabilities</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The traditional operating companies are subject to the provisions of the Financial Accounting Standards Board in accounting for the effects of rate regulation. Regulatory assets represent probable future revenues associated with certain costs that are expected to be recovered from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are expected to be credited to customers through the ratemaking process. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </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="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">Note</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="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax charges </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,204</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,048</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax charges — Medicare subsidy </div></td> <td> </td> <td> </td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(k</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Asset retirement obligations-asset </div></td> <td> </td> <td> </td> <td align="right"><b>79</b></td> <td> </td> <td> </td> <td> </td> <td align="right">125</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Asset retirement obligations-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(82</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(47</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other cost of removal obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(1,188</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,307</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax credits </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(237</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(249</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Loss on reacquired debt </div></td> <td> </td> <td> </td> <td align="right"><b>274</b></td> <td> </td> <td> </td> <td> </td> <td align="right">255</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(b</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Vacation pay </div></td> <td> </td> <td> </td> <td align="right"><b>151</b></td> <td> </td> <td> </td> <td> </td> <td align="right">145</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(c,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Under recovered regulatory clause revenues </div></td> <td> </td> <td> </td> <td align="right"><b>27</b></td> <td> </td> <td> </td> <td> </td> <td align="right">40</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Over recovered regulatory clause revenues </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(40</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Building leases </div></td> <td> </td> <td> </td> <td align="right"><b>45</b></td> <td> </td> <td> </td> <td> </td> <td align="right">47</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(f</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Generating plant outage costs </div></td> <td> </td> <td> </td> <td align="right"><b>31</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Under recovered storm damage costs </div></td> <td> </td> <td> </td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Property damage reserves </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(216</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(157</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fuel hedging-asset </div></td> <td> </td> <td> </td> <td align="right"><b>211</b></td> <td> </td> <td> </td> <td> </td> <td align="right">187</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Fuel hedging-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(7</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other assets </div></td> <td> </td> <td> </td> <td align="right"><b>171</b></td> <td> </td> <td> </td> <td> </td> <td align="right">156</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental remediation-asset </div></td> <td> </td> <td> </td> <td align="right"><b>67</b></td> <td> </td> <td> </td> <td> </td> <td align="right">68</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental remediation-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(10</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental compliance cost recovery </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(96</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(g</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other liabilities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(13</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(51</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(j</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Retiree benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>2,041</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,268</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(e,i</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Total assets (liabilities), net </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,598</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,260</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows: </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="1%" nowrap="nowrap" align="left">(a)</td> <td width="1%"> </td> <td>Asset retirement and removal assets and liabilities are recorded, deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 65 years. Asset retirement and other cost of removal liabilities will be settled and trued up following completion of the related activities. Other cost of removal obligations include $92 million at Georgia Power that will be amortized over a three-year period beginning January 1, 2011 in accordance with a Georgia PSC order. See Note 3 under “Retail Regulatory Matters — Georgia Power — Retail Rate Plans” for additional information.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(b)</td> <td width="1%"> </td> <td>Recovered over either the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(c)</td> <td width="1%"> </td> <td>Recorded as earned by employees and recovered as paid, generally within one year.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(d)</td> <td width="1%"> </td> <td>Recorded and recovered or amortized as approved by the appropriate state PSCs over periods not exceeding 10 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(e)</td> <td width="1%"> </td> <td>Recovered and amortized over the average remaining service period which may range up to 15 years. See Note 2 for additional information.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(f)</td> <td width="1%"> </td> <td>Recovered over the remaining lives of the buildings through 2026.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(g)</td> <td width="1%"> </td> <td>Deferred revenue associated with the levelization of Georgia Power’s environmental compliance cost recovery (ECCR) tariff revenue for the years 2008 through 2010 in accordance with a Georgia PSC order.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(h)</td> <td width="1%"> </td> <td>Recovered as storm restoration or environmental remediation expenses are incurred.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(i)</td> <td width="1%"> </td> <td>Not earning a return as offset in rate base by a corresponding asset or liability.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(j)</td> <td width="1%"> </td> <td>Recorded and recovered or amortized as approved by the appropriate state PSC over periods up to the life of the plant or the remaining life of the original issue or, if refinanced, over the life of the new issue which may range up to 50 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(k)</td> <td width="1%"> </td> <td>Recovered and amortized as approved by the appropriate state PSCs over periods not exceeding 14 years. See Note 5 under “Current and Deferred Income Taxes” for additional information.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the event that a portion of a traditional operating company’s operations is no longer subject to applicable accounting rules for rate regulation, such company would be required to write off or reclassify to accumulated other comprehensive income (OCI) related regulatory assets and liabilities that are not specifically recoverable through regulated rates. In addition, the traditional operating company would be required to determine if any impairment to other assets, including plant, exists and write down the assets, if impaired, to their fair values. All regulatory assets and liabilities are to be reflected in rates. See Note 3 under “Retail Regulatory Matters — Alabama Power,” “Retail Regulatory Matters — Georgia Power,” and “Retail Regulatory Matters — Mississippi Power Integrated Coal Gasification Combined Cycle” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Revenues</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Wholesale capacity revenues are generally recognized on a levelized basis over the appropriate contract periods. Energy and other revenues are recognized as services are provided. Unbilled revenues related to retail sales are accrued at the end of each fiscal period. Electric rates for the traditional operating companies include provisions to adjust billings for fluctuations in fuel costs, fuel hedging, the energy component of purchased power costs, and certain other costs. Revenues are adjusted for differences between these actual costs and amounts billed in current regulated rates. Under or over recovered regulatory clause revenues are recorded in the balance sheets and are recovered or returned to customers through adjustments to the billing factors. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has a diversified base of customers. No single customer or industry comprises 10% or more of revenues. For all periods presented, uncollectible accounts averaged less than 1% of revenues. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fuel Costs</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Fuel costs are expensed as the fuel is used. Fuel expense generally includes the cost of purchased emissions allowances as they are used. Fuel expense also includes the amortization of the cost of nuclear fuel and a charge, based on nuclear generation, for the permanent disposal of spent nuclear fuel. See Note 3 under “Nuclear Fuel Disposal Costs” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Income and Other Taxes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company uses the liability method of accounting for deferred income taxes and provides deferred income taxes for all significant income tax temporary differences. Taxes that are collected from customers on behalf of governmental agencies to be remitted to these agencies are presented net on the statements of income. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with regulatory requirements, deferred investment tax credits (ITCs) for the traditional operating companies are amortized over the lives of the related property with such amortization normally applied as a credit to reduce depreciation in the statements of income. Credits amortized in this manner amounted to $23 million in 2010, $24 million in 2009, and $23 million in 2008. At December 31, 2010, all ITCs available to reduce federal income taxes payable had been utilized. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Under the American Recovery and Reinvestment Act of 2009, certain projects at certain Southern Company subsidiaries are eligible for ITCs or cash grants. These subsidiaries have elected to receive ITCs. The credits are recorded as a deferred credit, which will be amortized over the life of the asset, and the tax basis of the asset is reduced by 50% of the credits received, resulting in a deferred tax asset. The subsidiaries have elected to recognize the tax benefit of this basis difference as a reduction to income tax expense as costs are incurred during the construction period. These basis differences will reverse and be recorded to income tax expense over the useful life of the asset once placed in service. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with accounting standards related to the uncertainty in income taxes, Southern Company recognizes tax positions that are “more likely than not” of being sustained upon examination by the appropriate taxing authorities. See Note 5 under “Unrecognized Tax Benefits” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Property, Plant, and Equipment</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Property, plant, and equipment is stated at original cost less regulatory disallowances and impairments. Original cost includes: materials; labor; minor items of property; appropriate administrative and general costs; payroll-related costs such as taxes, pensions, and other benefits; and the interest capitalized and/or cost of funds used during construction. </div>   </div>  <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">Southern Company’s property, plant, and equipment consisted of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Generation </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>30,121</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">28,204</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Transmission </div></td> <td> </td> <td> </td> <td align="right"><b>7,835</b></td> <td> </td> <td> </td> <td> </td> <td align="right">7,380</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Distribution </div></td> <td> </td> <td> </td> <td align="right"><b>14,870</b></td> <td> </td> <td> </td> <td> </td> <td align="right">14,335</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">General </div></td> <td> </td> <td> </td> <td align="right"><b>3,116</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,917</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plant acquisition adjustment </div></td> <td> </td> <td> </td> <td align="right"><b>43</b></td> <td> </td> <td> </td> <td> </td> <td align="right">43</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Utility plant in service </div></td> <td> </td> <td> </td> <td align="right"><b>55,985</b></td> <td> </td> <td> </td> <td> </td> <td align="right">52,879</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Information technology equipment and software </div></td> <td> </td> <td> </td> <td align="right"><b>216</b></td> <td> </td> <td> </td> <td> </td> <td align="right">182</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Communications equipment </div></td> <td> </td> <td> </td> <td align="right"><b>423</b></td> <td> </td> <td> </td> <td> </td> <td align="right">423</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right"><b>107</b></td> <td> </td> <td> </td> <td> </td> <td align="right">104</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other plant in service </div></td> <td> </td> <td> </td> <td align="right"><b>746</b></td> <td> </td> <td> </td> <td> </td> <td align="right">709</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total plant in service </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>56,731</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">53,588</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The cost of replacements of property, exclusive of minor items of property, is capitalized. The cost of maintenance, repairs, and replacement of minor items of property is charged to maintenance expense as incurred or performed with the exception of nuclear refueling costs, which are recorded in accordance with specific state PSC orders. Alabama Power and Georgia Power defer and amortize nuclear refueling costs over the unit’s operating cycle. The refueling cycles for Alabama Power and Georgia Power range from 18 to 24 months for each unit. In accordance with a Georgia PSC order, Georgia Power also defers the costs of certain significant inspection costs for the combustion turbines at Plant McIntosh and amortizes such costs over 10 years, which approximates the expected maintenance cycle. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The amount of non-cash property additions recognized for the years ended December 31, 2010, 2009, and 2008 was $427 million, $370 million, and $309 million, respectively. These amounts are comprised of construction related accounts payable outstanding at each year end together with retention amounts accrued during the respective year. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Depreciation and Amortization</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Depreciation of the original cost of utility plant in service is provided primarily by using composite straight-line rates, which approximated 3.3% in 2010, 3.2% in 2009, and 3.2% in 2008. Depreciation studies are conducted periodically to update the composite rates. These studies are filed with the respective state PSC for the traditional operating companies. Accumulated depreciation for utility plant in service totaled $19.7 billion and $18.7 billion at December 31, 2010 and 2009, respectively. When property subject to composite depreciation is retired or otherwise disposed of in the normal course of business, its original cost, together with the cost of removal, less salvage, is charged to accumulated depreciation. For other property dispositions, the applicable cost and accumulated depreciation are removed from the balance sheet accounts and a gain or loss is recognized. Minor items of property included in the original cost of the plant are retired when the related property unit is retired. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2009, the Georgia PSC approved an accounting order allowing Georgia Power to amortize a portion of its regulatory liability related to other cost of removal obligations. See Note 3 under “Retail Regulatory Matters — Georgia Power — Retail Rate Plans” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Depreciation of the original cost of other plant in service is provided primarily on a straight-line basis over estimated useful lives ranging from three to 30 years. Accumulated depreciation for other plant in service totaled $441 million and $419 million at December 31, 2010 and 2009, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Asset Retirement Obligations and Other Costs of Removal</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Asset retirement obligations are computed as the present value of the ultimate costs for an asset’s future retirement and are recorded in the period in which the liability is incurred. The costs are capitalized as part of the related long-lived asset and depreciated over the asset’s useful life. The Company has received accounting guidance from the various state PSCs allowing the continued accrual of other future retirement costs for long-lived assets that the Company does not have a legal obligation to retire. Accordingly, the accumulated removal costs for these obligations are reflected in the balance sheets as a regulatory liability. See Note 3 under “Retail Regulatory Matters — Georgia Power — Retail Rate Plans” for additional information related to Georgia Power’s cost of removal regulatory liability. </div>   </div>  <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">The liability recognized to retire long-lived assets primarily relates to the Company’s nuclear facilities, Plants Farley, Hatch, and Vogtle. In addition, the Company has retirement obligations related to various landfill sites, ash ponds, underground storage tanks, asbestos removal, and disposal of polychlorinated biphenyls in certain transformers. The Company also has identified retirement obligations related to certain transmission and distribution facilities, co-generation facilities, certain wireless communication towers, and certain structures authorized by the U.S. Army Corps of Engineers. However, liabilities for the removal of these assets have not been recorded because the range of time over which the Company may settle these obligations is unknown and cannot be reasonably estimated. The Company will continue to recognize in the statements of income allowed removal costs in accordance with its regulatory treatment. Any differences between costs recognized in accordance with accounting standards related to asset retirement and environmental obligations and those reflected in rates are recognized as either a regulatory asset or liability, as ordered by the various state PSCs, and are reflected in the balance sheets. See “Nuclear Decommissioning” herein for further information on amounts included in rates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Details of the asset retirement obligations included in the balance sheets are as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at beginning of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,206</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,185</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities incurred </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities settled </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(16</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Accretion </div></td> <td> </td> <td> </td> <td align="right"><b>78</b></td> <td> </td> <td> </td> <td> </td> <td align="right">77</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flow revisions </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(48</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at end of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,266</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,206</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Nuclear Decommissioning</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Nuclear Regulatory Commission (NRC) requires licensees of commercial nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. Alabama Power and Georgia Power have external trust funds (the Funds) to comply with the NRC’s regulations. Use of the Funds is restricted to nuclear decommissioning activities and the Funds are managed and invested in accordance with applicable requirements of various regulatory bodies, including the NRC, the FERC, and state PSCs, as well as the Internal Revenue Service (IRS). The Funds are required to be held by one or more trustees with an individual net worth of at least $100 million. The FERC requires the Funds’ managers to exercise the standard of care in investing that a “prudent investor” would use in the same circumstances. The FERC regulations also require, except for investments tied to market indices or other mutual funds, that the Funds’ managers may not invest in any securities of the utility for which it manages funds or its affiliates. In addition, the NRC prohibits investments in securities of power reactor licensees. While Southern Company is allowed to prescribe an overall investment policy to the Funds’ managers, neither Southern Company nor its subsidiaries or affiliates are allowed to engage in the day-to-day management of the Funds or to mandate individual investment decisions. Day-to-day management of the investments in the Funds is delegated to unrelated third party managers with oversight by Southern Company, Alabama Power, and Georgia Power management. The Funds’ managers are authorized, within broad limits, to actively buy and sell securities at their own discretion in order to maximize the return on the Funds’ investments. The Funds are invested in a tax-efficient manner in a diversified mix of equity and fixed income securities and are reported as trading securities. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company records the investment securities held in the Funds at fair value, as disclosed in Note 10. Gains and losses, whether realized or unrealized, are recorded in the regulatory liability for asset retirement obligations in the balance sheets and are not included in net income or OCI. Fair value adjustments and realized gains and losses are determined on a specific identification basis. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Funds at Georgia Power participate in a securities lending program through the managers of the Funds. Under this program, the Funds’ investment securities are loaned to investment brokers for a fee. Securities so loaned are fully collateralized by cash, letters of credit, and securities issued or guaranteed by the U.S. government, its agencies, and the instrumentalities. As of December 31, 2010 and 2009, approximately $141 million and $14 million, respectively, of the fair market value of the Funds’ securities were on loan and pledged to creditors under the Funds’ managers’ securities lending program. The fair value of the collateral received was approximately $144 million and $14 million at December 31, 2010 and 2009, respectively, and can only be sold upon the return of the loaned securities. The collateral received is treated as a non-cash item in the statements of cash flows. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, investment securities in the Funds totaled $1.4 billion consisting of equity securities of $664 million, debt securities of $632 million, and $74 million of other securities. At December 31, 2009, investment securities in the Funds totaled $1.1 billion consisting of equity securities of $774 million, debt securities of $272 million, and $22 million of other securities. These amounts include the investment securities pledged to creditors and collateral received, and exclude receivables related to investment income and pending investment sales, and payables related to pending investment purchases and the lending pool. </div>   </div>  <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">Sales of the securities held in the Funds resulted in cash proceeds of $2.0 billion, $1.2 billion, and $712 million in 2010, 2009, and 2008, respectively, all of which were reinvested. For 2010, fair value increases, including reinvested interest and dividends and excluding the Funds’ expenses, were $139 million, of which $6 million related to securities held in the Funds at December 31, 2010. For 2009, fair value increases, including reinvested interest and dividends and excluding the Funds’ expenses, were $215 million, of which $198 million related to securities held in the Funds at December 31, 2009. For 2008, fair value reductions, including reinvested interest and dividends and excluding the Funds’ expenses, were $(278) million. While the investment securities held in the Funds are reported as trading securities, the Funds continue to be managed with a long-term focus. Accordingly, all purchases and sales within the Funds are presented separately in the statements of cash flows as investing cash flows, consistent with the nature of and purpose for which the securities were acquired. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts previously recorded in internal reserves are being transferred into the external trust funds over periods approved by the Alabama PSC. The NRC’s minimum external funding requirements are based on a generic estimate of the cost to decommission only the radioactive portions of a nuclear unit based on the size and type of reactor. Alabama Power and Georgia Power have filed plans with the NRC designed to ensure that, over time, the deposits and earnings of the Funds will provide the minimum funding amounts prescribed by the NRC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the accumulated provisions for decommissioning were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">External trust funds </div></td> <td> </td> <td align="left">$</td> <td align="right">553</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Internal reserves </div></td> <td> </td> <td> </td> <td align="right">24</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="13" 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">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">577</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Site study cost is the estimate to decommission a specific facility as of the site study year. The estimated costs of decommissioning based on the most current studies, which were performed in 2008 for Alabama Power’s Plant Farley and in 2009 for the Georgia Power plants, were as follows for Alabama Power’s Plant Farley and Georgia Power’s ownership interests in Plants Hatch and Vogtle: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</b></td> <td style="border-bottom: 1px solid #000000"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Decommissioning periods: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Beginning year </div></td> <td> </td> <td> </td> <td align="right">2037</td> <td> </td> <td> </td> <td> </td> <td align="right">2034</td> <td> </td> <td> </td> <td> </td> <td align="right">2047</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Completion year </div></td> <td> </td> <td> </td> <td align="right">2065</td> <td> </td> <td> </td> <td> </td> <td align="right">2063</td> <td> </td> <td> </td> <td> </td> <td align="right">2067</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td colspan="11" align="center"><i style="font-size: 8pt">(in millions)</i><br /></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Site study costs: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Radiated structures </div></td> <td> </td> <td align="left">$</td> <td align="right">1,060</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">583</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">500</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Non-radiated structures </div></td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> <td> </td> <td> </td> <td align="right">46</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">1,132</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">629</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">571</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The decommissioning periods and site study costs for Plant Vogtle reflect the extended operating license approved by the NRC in June 2009. The decommissioning cost estimates are based on prompt dismantlement and removal of the plant from service. The actual decommissioning costs may vary from the above estimates because of changes in the assumed date of decommissioning, changes in NRC requirements, or changes in the assumptions used in making these estimates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For ratemaking purposes, Alabama Power’s decommissioning costs are based on the site study, and Georgia Power’s decommissioning costs are based on the NRC generic estimate to decommission the radioactive portion of the facilities as of 2006. The estimates used in current rates are $575 million and $420 million for Plant Hatch and Plant Vogtle Units 1 and 2, respectively. Amounts expensed were $3 million annually for Plant Vogtle Units 1 and 2 for 2008 through 2010. Effective for the years 2011 through 2013, the annual decommissioning cost for ratemaking is $2 million for Plant Hatch. Georgia Power projects the external trust funds for Plant Vogtle Units 1 and 2 would be adequate to meet the decommissioning obligations of the NRC with no further contributions. Significant assumptions used to determine these costs for ratemaking were an inflation rate of 4.5% and 2.4% for Alabama Power and Georgia Power, respectively, and a trust earnings rate of 7.0% and 4.4% for Alabama Power and Georgia Power, respectively. As a result of license extensions, amounts previously contributed to the external trust funds for Plant Farley are currently projected to be adequate to meet the decommissioning obligations. </div>   </div>  <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>Allowance for Funds Used During Construction (AFUDC) and Interest Capitalized</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with regulatory treatment, the traditional operating companies record AFUDC, which represents the estimated debt and equity costs of capital funds that are necessary to finance the construction of new regulated facilities. While cash is not realized currently from such allowance, it increases the revenue requirement over the service life of the plant through a higher rate base and higher depreciation. The equity component of AFUDC is not included in calculating taxable income. Interest related to the construction of new facilities not included in the traditional operating companies’ regulated rates is capitalized in accordance with standard interest capitalization requirements. AFUDC and interest capitalized, net of income taxes were 12.5%, 15.3%, and 11.2% of net income for 2010, 2009, and 2008, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Cash payments for interest totaled $789 million, $788 million, and $787 million in 2010, 2009, and 2008, respectively, net of amounts capitalized of $86 million, $84 million, and $71 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Impairment of Long-Lived Assets and Intangibles</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company evaluates long-lived assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The determination of whether an impairment has occurred is based on either a specific regulatory disallowance or an estimate of undiscounted future cash flows attributable to the assets, as compared with the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by either the amount of regulatory disallowance or by estimating the fair value of the assets and recording a loss if the carrying value is greater than the fair value. For assets identified as held for sale, the carrying value is compared to the estimated fair value less the cost to sell in order to determine if an impairment loss is required. Until the assets are disposed of, their estimated fair value is re-evaluated when circumstances or events change. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Storm Damage Reserves</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Each traditional operating company maintains a reserve to cover the cost of damages from major storms to its transmission and distribution lines and generally the cost of uninsured damages to its generation facilities and other property. In accordance with their respective state PSC orders, the traditional operating companies accrued $32 million in 2010 and $44 million in 2009. Alabama Power, Gulf Power, and Mississippi Power also have discretionary authority from their state PSCs to accrue certain additional amounts as circumstances warrant. In 2010 and 2009, such additional accruals totaled $48 million and $40 million, respectively, all at Alabama Power. There were no material accruals for 2008. See Note 3 under “Retail Regulatory Matters — Alabama Power — Natural Disaster Reserve” for additional information regarding Alabama Power’s natural disaster reserve. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Leveraged Leases</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has several leveraged lease agreements, with terms ranging up to 45 years, which relate to international and domestic energy generation, distribution, and transportation assets. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt related to these investments. The Company reviews all important lease assumptions at least annually, or more frequently if events or changes in circumstances indicate that a change in assumptions has occurred or may occur. These assumptions include the effective tax rate, the residual value, the credit quality of the lessees, and the timing of expected tax cash flows. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s net investment in domestic leveraged leases consists of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>475</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">487</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(207</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>268</b></td> <td> </td> <td> </td> <td> </td> <td align="right">269</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(223</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(211</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>45</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of income from domestic leveraged leases was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Net leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s net investment in international leveraged leases consists of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>733</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">734</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(377</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(393</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>356</b></td> <td> </td> <td> </td> <td> </td> <td align="right">341</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current taxes payable </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(40</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>316</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">301</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of income from international leveraged leases was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>14</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">19</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(99</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax benefit (expense) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Net leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>9</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(64</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company terminated two international leveraged lease investments during 2009. The proceeds were used to extinguish all debt related to leveraged lease investments, a portion of which had make-whole redemption provisions. This resulted in a $17 million loss which partially offset a $26 million gain on the terminations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Cash and Cash Equivalents</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For purposes of the financial statements, temporary cash investments are considered cash equivalents. Temporary cash investments are securities with original maturities of 90 days or less. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Materials and Supplies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Generally, materials and supplies include the average costs of transmission, distribution, and generating plant materials. Materials are charged to inventory when purchased and then expensed or capitalized to plant, as appropriate, at weighted average cost when installed. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fuel Inventory</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Fuel inventory includes the average costs of oil, coal, natural gas, and emissions allowances. Fuel is charged to inventory when purchased and then expensed as used and recovered by the traditional operating companies through fuel cost recovery rates approved by each state PSC. Emissions allowances granted by the Environmental Protection Agency (EPA) are included in inventory at zero cost. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Financial Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company uses derivative financial instruments to limit exposure to fluctuations in interest rates, the prices of certain fuel purchases, electricity purchases and sales, and occasionally foreign currency exchange rates. All derivative financial instruments are recognized as either assets or liabilities (included in “Other” or shown separately as “Risk Management Activities”) and are measured at fair value. See Note 10 for additional information. Substantially all of Southern Company’s bulk energy purchases and sales contracts that meet the definition of a derivative are excluded from fair value accounting requirements because they qualify for the “normal” scope exception, and are accounted for under the accrual method. Other derivative contracts qualify as cash flow hedges of anticipated transactions or are recoverable through the traditional operating companies’ fuel hedging programs. This results in the deferral of related gains and losses in OCI or regulatory assets and liabilities, respectively, until the hedged transactions occur. Any ineffectiveness arising from cash flow hedges is recognized currently in net income. Other derivative contracts are marked to market through current period income and are recorded on a net basis in the statements of income. See Note 11 for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not offset fair value amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement. At December 31, 2010, the amount included in accounts payable in the balance sheets that the Company has recognized for the obligation to return cash collateral arising from derivative instruments was not material. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company is exposed to losses related to financial instruments in the event of counterparties’ nonperformance. The Company has established controls to determine and monitor the creditworthiness of counterparties in order to mitigate the Company’s exposure to counterparty credit risk. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Comprehensive Income</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The objective of comprehensive income is to report a measure of all changes in common stock equity of an enterprise that result from transactions and other economic events of the period other than transactions with owners. Comprehensive income consists of net income, changes in the fair value of qualifying cash flow hedges and marketable securities, certain changes in pension and other postretirement benefit plans, and reclassifications for amounts included in net income. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Accumulated OCI (loss) balances, net of tax effects, were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="32%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </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 nowrap="nowrap" align="center" colspan="3"><b>Pension and Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated Other</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Qualifying</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Marketable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Postretirement</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></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="3" style="border-bottom: 1px solid #000000"><b>Hedges</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="3" style="border-bottom: 1px solid #000000"><b>Securities</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Plans</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Income (Loss)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2009 </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(49</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(49</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(88</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current period change </div></td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2010</b> </div></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(35</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>7</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(42</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(70</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Variable Interest Entities</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Effective January 1, 2010, the traditional operating companies and Southern Power adopted new accounting guidance which modified the consolidation model and expanded disclosures related to variable interest entities (VIE). The primary beneficiary of a VIE is required to consolidate the VIE when it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The adoption of this new accounting guidance did not result in the traditional operating companies or Southern Power consolidating any VIEs that were not already consolidated under previous guidance, nor deconsolidating any VIEs. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the traditional operating companies have established certain wholly-owned trusts to issue preferred securities. See Note 6 under “Long-Term Debt Payable to Affiliated Trusts” for additional information. However, Southern Company and the applicable traditional operating companies are not considered the primary beneficiaries of the trusts. Therefore, the investments in these trusts are reflected as other investments, and the related loans from the trusts are reflected in long-term debt in the balance sheets. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. RETIREMENT BENEFITS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has a defined benefit, trusteed, pension plan covering substantially all employees. This qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). In December 2010, the traditional operating companies and certain other subsidiaries contributed approximately $620 million to the qualified pension plan. No contributions to the qualified pension plan are expected for the year ending December 31, 2011. Southern Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, Southern Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions. For the year ending December 31, 2011, other postretirement trust contributions are expected to total approximately $31 million. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average rates assumed in the actuarial calculations used to determine both the benefit obligations as of the measurement date and the net periodic costs for the pension and other postretirement benefit plans for the following year are presented below. Net periodic benefit costs were calculated in 2007 for the 2008 plan year using a discount rate of 6.30% and an annual salary increase of 3.75%. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 nowrap="nowrap" align="right" colspan="2"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2">2009</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2">2008</td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="13" 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">Discount rate: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Pension plans </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>5.52</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">5.93</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">6.75</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other postretirement benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>5.40</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.83</td> <td> </td> <td> </td> <td> </td> <td align="right">6.75</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Annual salary increase </div></td> <td> </td> <td> </td> <td align="right"><b>3.84</b></td> <td> </td> <td> </td> <td> </td> <td align="right">4.18</td> <td> </td> <td> </td> <td> </td> <td align="right">3.75</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term return on plan assets: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Pension plans </div></td> <td> </td> <td> </td> <td align="right"><b>8.75</b></td> <td> </td> <td> </td> <td> </td> <td align="right">8.50</td> <td> </td> <td> </td> <td> </td> <td align="right">8.50</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other postretirement benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>7.40</b></td> <td> </td> <td> </td> <td> </td> <td align="right">7.51</td> <td> </td> <td> </td> <td> </td> <td align="right">7.59</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company estimates the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of seven different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust’s target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust’s target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust’s portfolio. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) was a weighted average medical care cost trend rate of 8.25% for 2011, decreasing gradually to 5.0% through the year 2019 and remaining at that level thereafter. An annual increase or decrease in the assumed medical care cost trend rate of 1% would affect the APBO and the service and interest cost components at December 31, 2010 as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>1 Percent</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>1 Percent</b></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="3" style="border-bottom: 1px solid #000000"><b>Increase</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Decrease</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="8"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefit obligation </div></td> <td> </td> <td align="right">$</td> <td align="right">128</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">108</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Service and interest costs </div></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Pension Plans</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total accumulated benefit obligation for the pension plans was $6.7 billion in 2010 and $6.3 billion in 2009. Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2010 and 2009 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="8"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in benefit obligation</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Benefit obligation at beginning of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>6,758</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,879</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service cost </div></td> <td> </td> <td> </td> <td align="right"><b>172</b></td> <td> </td> <td> </td> <td> </td> <td align="right">146</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>391</b></td> <td> </td> <td> </td> <td> </td> <td align="right">387</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(296</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(282</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Actuarial loss (gain) </div></td> <td> </td> <td> </td> <td align="right"><b>198</b></td> <td> </td> <td> </td> <td> </td> <td align="right">628</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Balance at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>7,223</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6,758</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in plan assets</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Fair value of plan assets at beginning of year </div></td> <td> </td> <td> </td> <td align="right"><b>5,627</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,093</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Actual return (loss) on plan assets </div></td> <td> </td> <td> </td> <td align="right"><b>859</b></td> <td> </td> <td> </td> <td> </td> <td align="right">792</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Employer contributions </div></td> <td> </td> <td> </td> <td align="right"><b>644</b></td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(296</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(282</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Fair value of plan assets at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>6,834</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,627</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued liability </div></td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(389</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,131</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the projected benefit obligations for the qualified and non-qualified pension plans were $6.7 billion and $0.5 billion, respectively. All pension plan assets are related to the qualified pension plan. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts recognized in the balance sheets at December 31, 2010 and 2009 related to the Company’s pension plans consist of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Prepaid pension costs </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>88</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other regulatory assets, deferred </div></td> <td> </td> <td> </td> <td align="right"><b>1,749</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,894</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other current liabilities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(28</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(25</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(449</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,106</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td> </td> <td align="right"><b>68</b></td> <td> </td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Presented below are the amounts included in accumulated OCI and regulatory assets at December 31, 2010 and 2009 related to the defined benefit pension plans that had not yet been recognized in net periodic pension cost along with the estimated amortization of such amounts for 2011. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Prior Service Cost</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Net (Gain) Loss</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2010:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>60</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right"><b>159</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,590</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>167</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,650</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">64</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">188</td> <td> </td> <td> </td> <td> </td> <td align="right">1,706</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">198</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,770</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Estimated amortization in net periodic pension cost in 2011:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">32</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The components of OCI and the changes in the balance of regulatory assets related to the defined benefit pension plans for the years ended December 31, 2010 and 2009 are presented in the following table: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Regulatory</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>OCI</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Assets</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2008</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">54</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,579</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net loss </div></td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td align="right">355</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(34</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(41</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td> </td> <td align="right">315</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2009</b> </div></td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> <td> </td> <td> </td> <td align="right">1,894</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(4</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(106</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></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"><b>(32</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></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"><b>(9</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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"><b>(41</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(6</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(145</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>68</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,749</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Components of net periodic pension cost were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</td> <td style="border-bottom: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="12"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>172</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">146</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">146</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>391</b></td> <td> </td> <td> </td> <td> </td> <td align="right">387</td> <td> </td> <td> </td> <td> </td> <td align="right">348</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(552</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(541</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(525</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Recognized net loss </div></td> <td> </td> <td> </td> <td align="right"><b>10</b></td> <td> </td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net amortization </div></td> <td> </td> <td> </td> <td align="right"><b>33</b></td> <td> </td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> <td> </td> <td> </td> <td align="right">37</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net periodic pension cost </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>54</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">34</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic pension cost is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Company has elected to amortize changes in the market value of all plan assets over five years rather than recognize the changes immediately. As a result, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2010, estimated benefit payments were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Payments</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2011 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top">$</td> <td align="right" valign="top">335</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2012 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">353</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2013 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">372</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2014 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">392</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2015 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">413</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2016 to 2020 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2,368</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" valign="top" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Other Postretirement Benefits</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the APBO and in the fair value of plan assets during the plan years ended December 31, 2010 and 2009 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in benefit obligation</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefit obligation at beginning of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,759</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,733</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td> </td> <td align="right"><b>25</b></td> <td> </td> <td> </td> <td> </td> <td align="right">26</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>100</b></td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(95</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(93</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actuarial loss (gain) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(41</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">34</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plan amendments </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Retiree drug subsidy </div></td> <td> </td> <td> </td> <td align="right"><b>6</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Balance at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>1,752</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,759</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in plan assets</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fair value of plan assets at beginning of year </div></td> <td> </td> <td> </td> <td align="right"><b>743</b></td> <td> </td> <td> </td> <td> </td> <td align="right">631</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return (loss) on plan assets </div></td> <td> </td> <td> </td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td> </td> <td align="right">127</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Employer contributions </div></td> <td> </td> <td> </td> <td align="right"><b>66</b></td> <td> </td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(89</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(87</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Fair value of plan assets at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>802</b></td> <td> </td> <td> </td> <td> </td> <td align="right">743</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Accrued liability </div></td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(950</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,016</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts recognized in the balance sheets at December 31, 2010 and 2009 related to the Company’s other postretirement benefit plans consist of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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 style="border-bottom: 1px solid #000000"> </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: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other regulatory assets, deferred </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>292</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">374</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other current liabilities </div></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> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(949</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1,016</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Presented below are the amounts included in accumulated OCI and regulatory assets at December 31, 2010 and 2009 related to the other postretirement benefit plans that had not yet been recognized in net periodic other postretirement benefit cost along with the estimated amortization of such amounts for 2011. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Prior Service</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net (Gain)</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Transition</b></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="3" style="border-bottom: 1px solid #000000"><b>Cost</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Loss</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Obligation</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="13"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2010:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right"><b>34</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>233</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>25</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>34</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>236</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>25</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td> </td> <td align="right">298</td> <td> </td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">41</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">303</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Estimated amortization as net periodic postretirement benefit cost in 2011:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></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> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The components of OCI, along with the changes in the balance of regulatory assets, related to the other postretirement benefit plans for the plan years ended December 31, 2010 and 2009 are presented in the following table: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Regulatory</b></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="3" style="border-bottom: 1px solid #000000"><b>OCI</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Assets</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2008</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">489</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(33</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs/transition obligation </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(56</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of transition obligation </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(8</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total reclassification adjustments </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(26</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(115</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b> </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">374</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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">(<b>60</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs/transition obligation </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of transition obligation </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(10</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(20</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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"><b>(82</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>292</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Components of the other postretirement benefit plans’ net periodic cost were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="20"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>25</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>100</b></td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> <td> </td> <td> </td> <td align="right">111</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(63</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(61</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net amortization </div></td> <td> </td> <td> </td> <td align="right"><b>20</b></td> <td> </td> <td> </td> <td> </td> <td align="right">25</td> <td> </td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net postretirement cost </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">103</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">111</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare Act) provides a 28% prescription drug subsidy for Medicare eligible retirees. The effect of the subsidy reduced Southern Company’s expenses for the years ended December 31, 2010, 2009, and 2008 by approximately $28 million, $33 million, and $35 million, respectively, and is expected to have a similar impact on future expenses. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Future benefit payments, including prescription drug benefits, reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans. Estimated benefit payments are reduced by drug subsidy receipts expected as a result of the Medicare Act as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Payments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Subsidy Receipts</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">108</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(8</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">100</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2012 </div></td> <td> </td> <td> </td> <td align="right">114</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(9</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">105</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2013 </div></td> <td> </td> <td> </td> <td align="right">121</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(10</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">111</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2014 </div></td> <td> </td> <td> </td> <td align="right">127</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(12</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">115</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2015 </div></td> <td> </td> <td> </td> <td align="right">133</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">120</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2016 to 2020 </div></td> <td> </td> <td> </td> <td align="right">695</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(69</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">626</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Benefit Plan Assets</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Pension plan and other postretirement plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code of 1986, as amended (Internal Revenue Code). In 2009, in determining the optimal asset allocation for the pension fund, the Company performed an extensive study based on projections of both assets and liabilities over a 10-year forward horizon. The primary goal of the study was to maximize plan funded status. The Company’s investment policies for both the pension and the other postretirement benefit plans cover a diversified mix of assets, including equity and fixed income securities, real estate, and private equity. Derivative instruments are used primarily to gain efficient exposure to the various asset classes and as hedging tools. The Company minimizes the risk of large losses primarily through diversification but also monitors and manages other aspects of risk. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The composition of the Company’s pension plan and other postretirement benefit plan assets as of December 31, 2010 and 2009, along with the targeted mix of assets for each plan, is presented below: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Target</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Pension plan assets:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">29</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>29</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">33</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity </div></td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>27</b></td> <td> </td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income </div></td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>22</b></td> <td> </td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>13</b></td> <td> </td> <td> </td> <td> </td> <td align="right">13</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>9</b></td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>100</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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="left" colspan="11"><b>Other postretirement benefit plan assets:</b></td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">42</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>40</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">37</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">International equity </div></td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>21</b></td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic fixed income </div></td> <td> </td> <td> </td> <td align="right">27</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>29</b></td> <td> </td> <td> </td> <td> </td> <td align="right">32</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Global fixed income </div></td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>100</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The investment strategy for plan assets related to the Company’s qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Company employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Investment Strategies</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Detailed below is a description of the investment strategies for each major asset category for the pension and other postretirement benefit plans disclosed above: </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><b><i>Domestic equity. </i></b>A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes managed both actively and through passive index approaches.</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><b><i>International equity. </i></b>An actively-managed mix of growth stocks and value stocks with both developed and emerging market exposure.</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><b><i>Fixed income. </i></b>A mix of domestic and international bonds.</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><b><i>Trust-owned life insurance. </i></b>Investments of the Company’s taxable trusts aimed at minimizing the impact of taxes on the portfolio.</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><b><i>Special situations. </i></b>Though currently unfunded, established both to execute opportunistic investment strategies with the objectives of diversifying and enhancing returns and exploiting short-term inefficiencies, as well as to invest in promising new strategies of a longer-term nature.</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><b><i>Real estate investments. </i></b>Investments in traditional private market, equity-oriented investments in real properties (indirectly through pooled funds or partnerships) and in publicly traded real estate securities.</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><b><i>Private equity. </i></b>Investments in private partnerships that invest in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt.</td> </tr> </table> </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Benefit Plan Asset Fair Values</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Following are the fair value measurements for the pension plan and the other postretirement benefit plan assets as of December 31, 2010 and 2009. The fair values presented are prepared in accordance with applicable accounting standards regarding fair value. For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan’s trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Securities for which the activity is observable on an active market or traded exchange are categorized as Level 1. Fixed income securities classified as Level 2 are valued using matrix pricing, a common model utilizing observable inputs. Domestic and international equity securities classified as Level 2 consist of pooled funds where the value is not quoted on an exchange but where the value is determined using observable inputs from the market. Securities that are valued using unobservable inputs are classified as Level 3 and include investments in real estate and investments in limited partnerships. The Company invests (through the pension plan trustee) directly in the limited partnerships which then invest in various types of funds or various private entities within a fund. The fair value of the limited partnerships’ investments is based on audited annual capital accounts statements which are generally prepared on a fair value basis. The Company also relies on the fact that, in most instances, the underlying assets held by the limited partnerships are reported at fair value. External investment managers typically send valuations to both the custodian and to the Company within 90 days of quarter end. The custodian reports the most recent value available and adjusts the value for cash flows since the statement date for each respective fund. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values of pension plan assets as of December 31, 2010 and 2009 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></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>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">1,266</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">511</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,778</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">1,277</td> <td> </td> <td> </td> <td> </td> <td align="right">443</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,720</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">304</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">304</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">594</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">596</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">201</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">201</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">478</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">480</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">184</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">674</td> <td> </td> <td> </td> <td> </td> <td align="right">858</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">638</td> <td> </td> <td> </td> <td> </td> <td align="right">638</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,729</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,778</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,315</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,822</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,728</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,778</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,315</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,821</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table>   </div>  <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: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Inputs</b></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>As of December 31, 2009:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">1,117</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">462</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,579</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">1,444</td> <td> </td> <td> </td> <td> </td> <td align="right">144</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,588</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">416</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">416</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">279</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">279</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">341</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">344</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">174</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">547</td> <td> </td> <td> </td> <td> </td> <td align="right">721</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">555</td> <td> </td> <td> </td> <td> </td> <td align="right">555</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,738</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,765</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,605</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</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> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,733</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,764</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,599</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the fair value measurement of the Level 3 items in the pension plan assets valued using significant unobservable inputs for the years ended December 31, 2010 and 2009 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="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="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>547</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>555</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">839</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">490</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return on investments: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments held at year end </div></td> <td> </td> <td> </td> <td align="right"><b>59</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>67</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(240</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">37</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments sold during the year </div></td> <td> </td> <td> </td> <td align="right"><b>18</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>18</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(65</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total return on investments </div></td> <td> </td> <td> </td> <td align="right"><b>77</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>85</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(305</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">47</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases, sales, and settlements </div></td> <td> </td> <td> </td> <td align="right"><b>50</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">13</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers into/out of Level 3 </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</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="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>674</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>638</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">547</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">555</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values of other postretirement benefit plan assets as of December 31, 2010 and 2009 are presented below. These fair value measurements exclude cash, receivables related to investment income, pending investments sales, and payables related to pending investment purchases. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></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>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">176</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">45</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">221</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">49</td> <td> </td> <td> </td> <td> </td> <td align="right">50</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">99</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">34</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">34</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trust-owned life insurance </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">291</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">291</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">26</td> <td> </td> <td> </td> <td> </td> <td align="right">33</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">232</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">509</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">49</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">790</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></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>As of December 31, 2009:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">149</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">42</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">191</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">62</td> <td> </td> <td> </td> <td> </td> <td align="right">36</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">54</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">54</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trust-owned life insurance </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">270</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">270</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">218</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">459</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">48</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">725</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the fair value measurement of the Level 3 items in the other postretirement benefit plan assets valued using significant unobservable inputs for the years ended December 31, 2010 and 2009 were as follows: </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="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="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>24</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>24</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">36</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return on investments: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments held at year end </div></td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </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">(10</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments sold during the year </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total return on investments </div></td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </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">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases, sales, and settlements </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers into/out of Level 3 </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</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="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>26</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>23</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Employee Savings Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company also sponsors a 401(k) defined contribution plan covering substantially all employees. The Company provides an 85% matching contribution on up to 6% of an employee’s base salary. Total matching contributions made to the plan for 2010, 2009, and 2008 were $76 million, $78 million, and $76 million, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. CONTINGENCIES AND REGULATORY MATTERS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>General Litigation Matters</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company and its subsidiaries are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the business activities of Southern Company’s subsidiaries are subject to extensive governmental regulation related to public health and the environment such as regulation of air emissions and water discharges. Litigation over environmental issues and claims of various types, including property damage, personal injury, common law nuisance, and citizen enforcement of environmental requirements such as opacity and air and water quality standards, has increased generally throughout the U.S. In particular, personal injury and other claims for damages caused by alleged exposure to hazardous materials, and common law nuisance claims for injunctive relief and property damage allegedly caused by greenhouse gas and other emissions, have become more frequent. The ultimate outcome of such pending or potential litigation against Southern Company and its subsidiaries cannot be predicted at this time; however, for current proceedings not specifically reported herein, management does not anticipate that the liabilities, if any, arising from such current proceedings would have a material adverse effect on Southern Company’s financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Environmental Matters</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>New Source Review Actions</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In November 1999, the EPA brought a civil action in the U.S. District Court for the Northern District of Georgia against certain Southern Company subsidiaries, including Alabama Power and Georgia Power, alleging that these subsidiaries had violated the New Source Review (NSR) provisions of the Clean Air Act and related state laws at certain coal-fired generating facilities. After Alabama Power was dismissed from the original action, the EPA filed a separate action in January 2001 against Alabama Power in the U.S. District Court for the Northern District of Alabama. In these lawsuits, the EPA alleges that NSR violations occurred at eight coal-fired generating facilities operated by Alabama Power and Georgia Power, including facilities co-owned by Mississippi Power and Gulf Power. The civil actions request penalties and injunctive relief, including an order requiring installation of the best available control technology at the affected units. The EPA concurrently issued notices of violation to Gulf Power and Mississippi Power relating to Gulf Power’s Plant Crist and Mississippi Power’s Plant Watson. In early 2000, the EPA filed a motion to amend its complaint to add Gulf Power and Mississippi Power as defendants based on the allegations in the notices of violation. However, in March 2001, the court denied the motion based on lack of jurisdiction, and the EPA has not re-filed. The original action, now solely against Georgia Power, has been administratively closed since the spring of 2001, and the case has not been reopened. The separate action against Alabama Power is ongoing. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2006, the U.S. District Court for the Northern District of Alabama entered a consent decree between Alabama Power and the EPA, resolving a portion of the Alabama Power lawsuit relating to the alleged NSR violations at Plant Miller. In July 2008, the U.S. District Court for the Northern District of Alabama granted partial summary judgment in favor of Alabama Power with respect to its other affected units regarding the proper legal test for determining whether projects are routine maintenance, repair, and replacement and therefore are excluded from NSR permitting. On September 2, 2010, the EPA dismissed five of its eight remaining claims against Alabama Power, leaving only three claims for summary disposition or trial, including the claim relating to a facility co-owned by Mississippi Power. The parties each filed motions for summary judgment on September 30, 2010. The court has set a trial date for October 2011 for any remaining claims. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company believes that the traditional operating companies complied with applicable laws and the EPA regulations and interpretations in effect at the time the work in question took place. The Clean Air Act authorizes maximum civil penalties of $25,000 to $37,500 per day, per violation at each generating unit, depending on the date of the alleged violation. An adverse outcome could require substantial capital expenditures or affect the timing of currently budgeted capital expenditures that cannot be determined at this time and could possibly require payment of substantial penalties. Such expenditures could affect future results of operations, cash flows, and financial condition if such costs are not recovered through regulated rates. The ultimate outcome of this matter cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Carbon Dioxide Litigation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>New York Case</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2004, three environmental groups and attorneys general from eight states, each outside of Southern Company’s service territory, and the corporation counsel for New York City filed complaints in the U.S. District Court for the Southern District of New York against Southern Company and four other electric power companies. The complaints allege that the companies’ emissions of carbon dioxide, a greenhouse gas, contribute to global warming, which the plaintiffs assert is a public nuisance. Under common law public and private nuisance theories, the plaintiffs seek a judicial order (1) holding each defendant jointly and severally liable for creating, contributing to, and/or maintaining global warming and (2) requiring each of the defendants to cap its emissions of carbon dioxide and then reduce those emissions by a specified percentage each year for at least a decade. The plaintiffs have not, however, requested that damages be awarded in connection with their claims. Southern Company believes these claims are without merit and notes that the complaint cites no statutory or regulatory basis for the claims. In September 2005, the U.S. District Court for the Southern District of New York granted Southern Company’s and the other defendants’ motions to dismiss these cases. The plaintiffs filed an appeal to the U.S. Court of Appeals for the Second Circuit in October 2005 and, in September 2009, the U.S. Court of Appeals for the Second Circuit reversed the district court’s ruling, vacating the dismissal of the plaintiffs’ claim, and remanding the case to the district court. On December 6, 2010, the U.S. Supreme Court granted the defendants’ petition for writ of certiorari. The ultimate outcome of these matters cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Kivalina Case</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In February 2008, the Native Village of Kivalina and the City of Kivalina filed a suit in the U.S. District Court for the Northern District of California against several electric utilities (including Southern Company), several oil companies, and a coal company. The plaintiffs are the governing bodies of an Inupiat village in Alaska. The plaintiffs contend that the village is being destroyed by erosion allegedly caused by global warming that the plaintiffs attribute to emissions of greenhouse gases by the defendants. The plaintiffs assert claims for public and private nuisance and contend that some of the defendants have acted in concert and are therefore jointly and severally liable for the plaintiffs’ damages. The suit seeks damages for lost property values and for the cost of relocating the village, which is alleged to be $95 million to $400 million. Southern Company believes that these claims are without merit and notes that the complaint cites no statutory or regulatory basis for the claims. In September 2009, the U.S. District Court for the Northern District of California granted the defendants’ motions to dismiss the case based on lack of jurisdiction and ruled the claims were barred by the political question doctrine and by the plaintiffs’ failure to establish the standard for determining that the defendants’ conduct caused the injury alleged. In November 2009, the plaintiffs filed an appeal with the U.S. Court of Appeals for the Ninth Circuit challenging the district court’s order dismissing the case. On January 24, 2011, the defendants filed a motion with the U.S. Court of Appeals for the Ninth Circuit to defer scheduling the case pending the decision of the U.S. Supreme Court in the New York case discussed above. The ultimate outcome of this matter cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Other Litigation</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Common law nuisance claims for injunctive relief and property damage allegedly caused by greenhouse gas emissions have become more frequent, and, as illustrated by the New York and Kivalina cases, courts have been debating whether private parties and states have standing to bring such claims. In another common law nuisance case, the U.S. District Court for the Southern District of Mississippi dismissed private party claims against certain oil, coal, chemical, and utility companies alleging damages as a result of Hurricane Katrina. The court ruled that the parties lacked standing to bring the claims and the claims were barred by the political question doctrine. In October 2009, the U.S. Court of Appeals for the Fifth Circuit reversed the district court and held that the plaintiffs did have standing to assert their nuisance, trespass, and negligence claims and none of the claims were barred by the political question doctrine. On May 28, 2010, however, the U.S. Court of Appeals for the Fifth Circuit dismissed the plaintiffs’ appeal of the case based on procedural grounds, reinstating the district court decision in favor of the defendants. On January 10, 2011, the U.S. Supreme Court denied the plaintiffs’ petition to reinstate the appeal. This case is now concluded. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Environmental Remediation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s subsidiaries must comply with environmental laws and regulations that cover the handling and disposal of waste and releases of hazardous substances. Under these various laws and regulations, the subsidiaries may also incur substantial costs to clean up properties. The traditional operating companies have each received authority from their respective state PSCs to recover approved environmental compliance costs through regulatory mechanisms. Within limits approved by the state PSCs, these rates are adjusted annually or as necessary. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power’s environmental remediation liability as of December 31, 2010 was $13 million. Georgia Power has been designated or identified as a potentially responsible party (PRP) at sites governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), including a large site in Brunswick, Georgia on the CERCLA National Priorities List (NPL). The parties have completed the removal of wastes from the Brunswick site as ordered by the EPA. Additional claims for recovery of natural resource damages at this site or for the assessment and potential cleanup of other sites on the Georgia Hazardous Sites Inventory and CERCLA NPL are anticipated. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In September 2008, the EPA advised Georgia Power that it has been designated as a PRP at the Ward Transformer Superfund site located in Raleigh, North Carolina. Numerous other entities have also received notices regarding this site from the EPA. Georgia Power, along with other named PRPs, is negotiating with the EPA to address cleanup of the site and reimbursement for past expenditures related to work performed at the site. In addition, in April 2009, two PRPs filed separate actions in the U.S. District Court for the Eastern District of North Carolina against numerous other PRPs, including Georgia Power, seeking contribution from the defendants for expenses incurred by the plaintiffs related to work performed at a portion of the site. The ultimate outcome of these matters will depend upon further environmental assessment and the ultimate number of PRPs and cannot be determined at this time; however, it is not expected to have a material impact on Southern Company’s financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Gulf Power’s environmental remediation liability includes estimated costs of environmental remediation projects of approximately $62 million as of December 31, 2010. These estimated costs relate to site closure criteria by the Florida Department of Environmental Protection (FDEP) for potential impacts to soil and groundwater from herbicide applications at Gulf Power substations. The schedule for completion of the remediation projects will be subject to FDEP approval. The projects have been approved by the Florida PSC for recovery through Gulf Power’s environmental cost recovery clause; therefore, there was no impact on net income as a result of these estimates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The final outcome of these matters cannot now be determined. However, based on the currently known conditions at these sites and the nature and extent of activities relating to these sites, management does not believe that additional liabilities, if any, at these sites would be material to the financial statements<i>.</i> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Right of Way Litigation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company and certain of its subsidiaries, including Mississippi Power, have been named as defendants in numerous lawsuits brought by landowners since 2001. The plaintiffs’ lawsuits claim that defendants may not use, or sublease to third parties, some or all of the fiber optic communications lines on the rights of way that cross the plaintiffs’ properties and that such actions exceed the easements or other property rights held by defendants. The plaintiffs assert claims for, among other things, trespass and unjust enrichment and seek compensatory and punitive damages and injunctive relief. Management of Southern Company believes that its subsidiaries have complied with applicable laws and that the plaintiffs’ claims are without merit. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Mississippi Power has entered into agreements with plaintiffs in approximately 95% of the actions pending against Mississippi Power to clarify its easement rights in the State of Mississippi. These agreements have been approved by the Circuit Courts of Harrison County and Jasper County, Mississippi (First Judicial Circuit), and the related cases have been dismissed. These agreements have not resulted in any material effects on Southern Company’s financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, in late 2001, certain subsidiaries of Southern Company, including Mississippi Power, were named as defendants in a lawsuit brought in Troup County, Georgia, Superior Court by Interstate Fiber Network Inc. a subsidiary of telecommunications company ITC DeltaCom, Inc. that uses certain of the defendants’ rights of way. This lawsuit alleges, among other things, that the defendants are contractually obligated to indemnify, defend, and hold harmless the telecommunications company from any liability that may be assessed against it in pending and future right of way litigation. The Company believes that the plaintiff’s claims are without merit. In the fall of 2004, the trial court stayed the case until resolution of the underlying landowner litigation discussed above. In January 2005, the Georgia Court of Appeals dismissed the telecommunications company’s appeal of the trial court’s order for lack of jurisdiction. On August 24, 2010, the defendants filed a motion to dismiss the suit for lack of prosecution. In January 2011, the court indicated that it intended to deny the defendant’s motion to dismiss the claim; however, no written order denying the motion has been entered into the record. An adverse outcome in this matter, combined with an adverse outcome against the telecommunications company in one or more of the right of way lawsuits, could result in substantial judgments; however, the final outcome of these matters cannot now be determined. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Nuclear Fuel Disposal Costs</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power and Georgia Power have contracts with the U.S., acting through the U.S. Department of Energy (DOE), that provide for the permanent disposal of spent nuclear fuel. The DOE failed to begin disposing of spent nuclear fuel in 1998 as required by the contracts, and Alabama Power and Georgia Power are pursuing legal remedies against the government for breach of contract. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In July 2007, the U.S. Court of Federal Claims awarded Georgia Power approximately $30 million, based on its ownership interests, and awarded Alabama Power approximately $17 million, representing substantially all of the direct costs of the expansion of spent nuclear fuel storage facilities at Plants Farley, Hatch, and Vogtle from 1998 through 2004. In November 2007, the government’s motion for reconsideration was denied. In January 2008, the government filed an appeal and, in February 2008, filed a motion to stay the appeal, which the U.S. Court of Appeals for the Federal Circuit granted in April 2008. On May 5, 2010, the U.S. Court of Appeals for the Federal Circuit lifted the stay. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2008, a second claim against the government was filed for damages incurred after December 31, 2004 (the court-mandated cut-off in the original claim), due to the government’s alleged continuing breach of contract. The complaint does not contain any specific dollar amount for recovery of damages. Damages will continue to accumulate until the issue is resolved or the storage is provided. No amounts have been recognized in the financial statements as of December 31, 2010 for either claim. The final outcome of these matters cannot be determined at this time, but no material impact on net income is expected as any damage amounts collected from the government are expected to be returned to customers. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Sufficient pool storage capacity for spent fuel is available at Plant Vogtle to maintain full-core discharge capability for both units into 2014. Construction of an on-site dry storage facility at Plant Vogtle is expected to begin in sufficient time to maintain pool full-core discharge capability. At Plants Hatch and Farley, on-site dry spent fuel storage facilities are operational and can be expanded to accommodate spent fuel through the expected life of each plant. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Income Tax Matters</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Georgia State Income Tax Credits</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power’s 2005 through 2009 income tax filings for the State of Georgia include state income tax credits for increased activity through Georgia ports. Georgia Power also filed similar claims for the years 2002 through 2004. The Georgia Department of Revenue (DOR) has not responded to these claims. In July 2007, Georgia Power filed a complaint in the Superior Court of Fulton County to recover the credits claimed for the years 2002 through 2004. On March 22, 2010, the Superior Court of Fulton County ruled in favor of Georgia Power’s motion for summary judgment. The Georgia DOR has appealed to the Georgia Court of Appeals and a decision is expected later this year. Any decision may be subject to further appeal to the Georgia Supreme Court. An unrecognized tax benefit has been recorded related to these credits. If Georgia Power prevails, no material impact on Southern Company’s net income is expected as a significant portion of any tax benefit is expected to be returned to retail customers in accordance with the Georgia PSC - approved Alternate Rate Plan for Georgia Power which became effective January 1, 2011 and will continue through December 31, 2013 (the 2010 ARP). If Georgia Power is not successful, payment of the related state tax could have a significant, and possibly material, negative effect on Southern Company’s cash flow. See Note 5 under “Unrecognized Tax Benefits” for additional information. The ultimate outcome of this matter cannot now be determined. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Tax Method of Accounting for Repairs</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company submitted a change in the tax accounting method for repair costs associated with Southern Company’s generation, transmission, and distribution systems with the filing of the 2009 federal income tax return in September 2010. On a consolidated basis, the new tax method resulted in net positive cash flow in 2010 of approximately $297 million. Although Internal Revenue Service (IRS) approval of this change is considered automatic, the amount claimed is subject to review because the IRS will be issuing final guidance on this matter. Currently, the IRS is working with the utility industry in an effort to resolve this matter in a consistent manner for all utilities. Due to uncertainty concerning the ultimate resolution of this matter, an unrecognized tax benefit has been recorded for the change in the tax accounting method for repair costs. See Note 5 under “Unrecognized Tax Benefits” for additional information. The ultimate outcome of this matter cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Retail Regulatory Matters</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Alabama Power</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Rate RSE</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power operates under the rate stabilization and equalization plan (Rate RSE) approved by the Alabama PSC. Alabama Power’s Rate RSE adjustments are based on forward-looking information for the applicable upcoming calendar year. Rate adjustments for any two-year period, when averaged together, cannot exceed 4.0% and any annual adjustment is limited to 5.0%. Retail rates remain unchanged when the retail return on common equity (ROE) is projected to be between 13.0% and 14.5%. If Alabama Power’s actual retail ROE is above the allowed equity return range, customer refunds will be required; however, there is no provision for additional customer billings should the actual retail return on common equity fall below the allowed equity return range. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Rate RSE increase for 2010 was 3.24%, or $152 million annually, and was effective in January 2010. In December 2010, Alabama Power made its Rate RSE submission to the Alabama PSC of projected data for calendar year 2011 and earnings were within the specified return range. Consequently, the retail rates will remain unchanged in 2011 under Rate RSE. Under the terms of Rate RSE, the maximum increase for 2012 cannot exceed 5.00%. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Rate CNP</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power’s retail rates, approved by the Alabama PSC, provide for adjustments to recognize the placing of new generating facilities into retail service and the recovery of retail costs associated with certificated power purchase agreements (PPA) under Rate CNP. There was no adjustment to the Rate CNP to recover certificated PPA costs in 2008 or 2009. Effective April 2010, rate certificated new plant (Rate CNP) was reduced by approximately $70 million annually, primarily due to the expiration on May 31, 2010, of the PPA with Southern Power covering the capacity of Plant Harris Unit 1. It is estimated that there will be a slight decrease to the current Rate CNP effective April 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Rate CNP also allows for the recovery of Alabama Power’s retail costs associated with environmental laws, regulations, or other such mandates. The rate mechanism is based on forward-looking information and provides for the recovery of these costs pursuant to a factor that is calculated annually. Environmental costs to be recovered include operations and maintenance expenses, depreciation, and a return on certain invested capital. Retail rates increased approximately 2.4% in January 2008 and 4.3% in January 2010 due to environmental costs. In October 2008, Alabama Power agreed to defer collection of any increase in rates under this portion of Rate CNP, which permits recovery of costs associated with environmental laws and regulations, from 2009 until 2010. The deferral of the retail rate adjustments had an immaterial impact on annual cash flows, and had no significant effect on the Company’s revenues or net income. On December 1, 2010, Alabama Power submitted calculations associated with its cost of complying with environmental mandates, as provided under Rate CNP Environmental. The filing reflects an incremental increase in the revenue requirement associated with such environmental compliance, which would be recoverable in the billing months of January 2011 through December 2011. In order to afford additional rate stability to customers as the economy continues to recover from the recession, the Alabama PSC ordered on January 4, 2011 that Alabama Power leave in effect for 2011 the factors associated with Alabama Power’s environmental compliance costs for the year 2010. Any recoverable amounts associated with 2011 will be reflected in the 2012 filing. The ultimate outcome of this matter cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Fuel Cost Recovery</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power has established fuel cost recovery rates under Alabama Power’s energy cost recovery rate mechanism (Rate ECR) as approved by the Alabama PSC. Rates are based on an estimate of future energy costs and the current over or under recovered balance. Revenues recognized under Rate ECR and recorded on the financial statements are adjusted for the difference in actual recoverable fuel costs and amounts billed in current regulated rates. The difference in the recoverable fuel costs and amounts billed give rise to the over or under recovered amounts recorded as regulatory assets or liabilities. Alabama Power, along with the Alabama PSC, continually monitors the over or under recovered cost balance to determine whether an adjustment to billing rates is required. Changes in the Rate ECR factor have no significant effect on net income, but will impact operating cash flows. Currently, the Alabama PSC may approve billing rates under Rate ECR of up to 5.910 cents per kilowatt hour (KWH). The Rate ECR factor as of January 1, 2011 is 2.403 cents per KWH. Effective with billings beginning in April 2011, the Rate ECR factor will be 2.681 cents per KWH. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, Alabama Power had an under recovered fuel balance of approximately $4 million which is included in deferred under recovered regulatory clause revenues in the balance sheets. As of December 31, 2009, Alabama Power had an over recovered fuel balance of approximately $200 million of which approximately $22 million was included in deferred over recovered regulatory clause revenues in the balance sheets. These classifications are based on estimates, which include such factors as weather, generation availability, energy demand, and the price of energy. A change in any of these factors could have a material impact on the timing of any return of the over recovered fuel costs or recovery of under recovered fuel costs. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Natural Disaster Reserve</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Based on an order from the Alabama PSC, Alabama Power maintains a reserve for operations and maintenance expenses to cover the cost of damages from major storms to its transmission and distribution facilities. The order approves a separate monthly natural disaster rate mechanism (Rate NDR) charge to customers consisting of two components. The first component is intended to establish and maintain a reserve balance for future storms and is an on-going part of customer billing. The second component of the Rate NDR charge is intended to allow recovery of any existing deferred storm-related operations and maintenance costs and any future reserve deficits over a 24-month period. The Alabama PSC order gives Alabama Power authority to record a deficit balance in the NDR when costs of storm damage exceed any established reserve balance. Alabama Power has discretionary authority to accrue certain additional amounts as circumstances warrant. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As revenue from the Rate NDR charge is recognized, an equal amount of operations and maintenance expenses related to the NDR will also be recognized. As a result, the Rate NDR charge will not have an effect on net income but will impact operating cash flows. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On August 20, 2010, the Alabama PSC approved an order enhancing the NDR that eliminated the $75 million authorized limit and allows Alabama Power to make additional accruals to the NDR. The order also allows for reliability-related expenditures to be charged against the additional accruals when the NDR balance exceeds $75 million. Alabama Power may designate a portion of the NDR to reliability-related expenditures as a part of an annual budget process for the following year or during the current year for identified unbudgeted reliability-related expenditures that are incurred. Accruals that have not been designated can be used to offset storm charges. Additional accruals to the NDR will enhance Alabama Power’s ability to deal with the financial effects of future natural disasters, promote system reliability, and offset costs retail customers would otherwise bear. The structure of the monthly Rate NDR charge to customers is not altered and continues to include a component to maintain the reserve. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended December 31, 2010, Alabama Power accrued an additional $48 million to the NDR, resulting in an accumulated balance of approximately $127 million. For the year ended December 31, 2009, Alabama Power accrued an additional $40 million to the NDR, resulting in an accumulated balance of approximately $75 million. These accruals are included in the balance sheets under other regulatory liabilities, deferred and are reflected as operations and maintenance expense in the statements of income. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Georgia Power</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Retail Rate Plans</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The economic recession significantly reduced Georgia Power’s revenues upon which retail rates were set by the Georgia PSC for 2008 through 2010 (the 2007 Retail Rate Plan). In June 2009, despite stringent efforts to reduce expenses, Georgia Power’s projected retail ROE for both 2009 and 2010 was below 10.25%. However, in lieu of filing to increase customer rates as allowed under the 2007 Retail Rate Plan, in June 2009, Georgia Power filed a request with the Georgia PSC for an accounting order that would allow Georgia Power to amortize up to $324 million of its regulatory liability related to other cost of removal obligations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2009, the Georgia PSC approved the accounting order. Under the terms of the accounting order, Georgia Power could amortize up to $108 million of the regulatory liability in 2009 and up to $216 million in 2010, limited to the amount needed to earn no more than a 9.75% and 10.15% retail ROE in 2009 and 2010, respectively. For the years ended December 31, 2009 and 2010, Georgia Power amortized $41 million and $174 million of the regulatory liability, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On December 21, 2010, the Georgia PSC approved an Alternate Rate Plan for Georgia Power which became effective January 1, 2011 and continuing through December 31, 2013 (the 2010 ARP). The terms of the 2010 ARP reflect a settlement agreement among Georgia Power, the Georgia PSC’s Public Interest Advocacy Staff (PSC Staff) and eight other intervenors. Under the terms of the 2010 ARP, Georgia Power will amortize approximately $92 million of its remaining regulatory liability related to other cost of removal obligations over the three years ending December 31, 2013. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Also under the terms of the 2010 ARP, effective January 1, 2011, Georgia Power increased its (1) traditional base tariff rates by approximately $347 million; (2) Demand-Side Management (DSM) tariff rates by approximately $31 million; (3) ECCR tariff rate by approximately $168 million; and (4) Municipal Franchise Fee (MFF) tariff rate by approximately $16 million, for a total increase in base revenues of approximately $562 million. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Under the 2010 ARP, the following additional base rate adjustments will be made to Georgia Power’s tariffs in 2012 and 2013: </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>Effective January 1, 2012, the DSM tariffs will increase by $17 million;</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>Effective April 1, 2012, the traditional base tariffs will increase to recover the revenue requirements for the lesser of actual capital costs incurred or the amounts certified by the Georgia PSC for Plant McDonough Units 4 and 5 for the period from commercial operation through December 31, 2013;</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>Effective January 1, 2013, the DSM tariffs will increase by $18 million;</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>Effective January 1, 2013, the traditional base tariffs will increase to recover the revenue requirements for the lesser of actual capital costs incurred or the amounts certified by the Georgia PSC for Plant McDonough Unit 6 for the period from commercial operation through December 31, 2013; and</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>The MFF tariff will increase consistent with these adjustments.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power currently estimates these adjustments will result in annualized base revenue increases of approximately $190 million in 2012 and $93 million in 2013. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Under the 2010 ARP, Georgia Power’s retail ROE is set at 11.15% and earnings will be evaluated against a retail ROE range of 10.25% to 12.25%. Two-thirds of any earnings above 12.25% will be directly refunded to customers, with the remaining one-third retained by Georgia Power. If at any time during the term of the 2010 ARP, Georgia Power projects that retail earnings will be below 10.25% for any calendar year, it may petition the Georgia PSC for the implementation of an Interim Cost Recovery (ICR) tariff to adjust Georgia Power’s earnings back to a 10.25% retail ROE. The Georgia PSC will have 90 days to rule on any such request. If approved, any ICR tariff would expire at the earlier of January 1, 2014 or the end of the calendar year in which the ICR tariff becomes effective. In lieu of requesting implementation of an ICR tariff, or if the Georgia PSC chooses not to implement the ICR, Georgia Power may file a full rate case. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided above, Georgia Power will not file for a general base rate increase while the 2010 ARP is in effect. Georgia Power is required to file a general rate case by July 1, 2013, in response to which the Georgia PSC would be expected to determine whether the 2010 ARP should be continued, modified, or discontinued. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power currently expects to file an update to its integrated resource plan (IRP) in June 2011. Under the terms of the 2010 ARP, any costs associated with changes to Georgia Power’s approved environmental operating or capital budgets (resulting from new or revised environmental regulations) through 2013 that are approved by the Georgia PSC in connection with an updated IRP will be deferred as a regulatory asset to be recovered over a time period deemed appropriate by the Georgia PSC. Such costs that may be deferred as a regulatory asset include any impairment losses that may result from a decision to retire certain units that are no longer cost effective in light of new or modified environmental regulations. In addition, in connection with the 2010 ARP, the Georgia PSC also approved revised depreciation rates that will recover the remaining book value of certain of Georgia Power’s existing coal-fired units by December 31, 2014. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The ultimate outcome of these matters cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Fuel Cost Recovery</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power has established fuel cost recovery rates approved by the Georgia PSC. The Georgia PSC approved increases in Georgia Power’s total annual billings of approximately $222 million effective June 1, 2008 and $373 million effective April 1, 2010. In addition, the Georgia PSC has authorized an interim fuel rider, which would allow Georgia Power to adjust its fuel cost recovery rates prior to the next fuel case if the under recovered fuel balance exceeds budget by more than $75 million. Georgia Power is currently required to file its next fuel case by March 1, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, Georgia Power’s under recovered fuel balance totaled approximately $398 million, of which approximately $214 million is included in deferred charges and other assets in the balance sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Fuel cost recovery revenues as recorded in the financial statements are adjusted for differences in actual recoverable costs and amounts billed in current regulated rates. Accordingly, a change in the billing factor has no significant effect on Southern Company’s revenues or net income, but does impact annual cash flow. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Nuclear Construction</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In August 2009, the NRC issued an Early Site Permit and Limited Work Authorization to Southern Nuclear, on behalf of Georgia Power, Oglethorpe Power Corporation (OPC), the Municipal Electric Authority of Georgia (MEAG Power), and the City of Dalton, Georgia, an incorporated municipality in the State of Georgia acting by and through its Board of Water, Light and Sinking Fund Commissioners (collectively, Owners), related to two additional nuclear units on the site of Plant Vogtle (Plant Vogtle Units 3 and 4). See Note 4 for additional information on these co-owners. In March 2008, Southern Nuclear filed an application with the NRC for a combined construction and operating license (COL) for the new units. If licensed by the NRC, Plant Vogtle Units 3 and 4 are scheduled to be placed in service in 2016 and 2017, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2008, Georgia Power, acting for itself and as agent for the Owners, and a consortium consisting of Westinghouse Electric Company LLC (Westinghouse) and Stone & Webster, Inc. (collectively, Consortium) entered into an engineering, procurement, and construction agreement to design, engineer, procure, construct, and test two AP1000 nuclear units with electric generating capacity of approximately 1,100 megawatts (MWs) each and related facilities, structures, and improvements at Plant Vogtle (Vogtle 3 and 4 Agreement). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Vogtle 3 and 4 Agreement is an arrangement whereby the Consortium supplies and constructs the entire facility with the exception of certain items provided by the Owners. Under the terms of the Vogtle 3 and 4 Agreement, the Owners agreed to pay a purchase price that will be subject to certain price escalations and adjustments, including fixed escalation amounts and certain index-based adjustments, as well as adjustments for change orders, and performance bonuses for early completion and unit performance. Each Owner is severally (and not jointly) liable for its proportionate share, based on its ownership interest, of all amounts owed to the Consortium under the Vogtle 3 and 4 Agreement. Georgia Power’s proportionate share is 45.7%. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Owners and the Consortium have agreed to certain liquidated damages upon the Consortium’s failure to comply with the schedule and performance guarantees. The Consortium’s liability to the Owners for schedule and performance liquidated damages and warranty claims is subject to a cap. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Certain payment obligations of Westinghouse and Stone & Webster, Inc. under the Vogtle 3 and 4 Agreement are guaranteed by Toshiba Corporation and The Shaw Group, Inc., respectively. In the event of certain credit rating downgrades of any Owner, such Owner will be required to provide a letter of credit or other credit enhancement. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Owners may terminate the Vogtle 3 and 4 Agreement at any time for their convenience, provided that the Owners will be required to pay certain termination costs and, at certain stages of the work, cancellation fees to the Consortium. The Consortium may terminate the Vogtle 3 and 4 Agreement under certain circumstances, including delays in receipt of the COL or delivery of full notice to proceed, certain Owner suspension or delays of work, action by a governmental authority to permanently stop work, certain breaches of the Vogtle 3 and 4 Agreement by the Owners, Owner insolvency, and certain other events. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In March 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4. In addition, the Georgia PSC voted to approve inclusion of the related construction work in progress accounts in rate base. In April 2009, the Governor of the State of Georgia signed into law the Georgia Nuclear Energy Financing Act that allows Georgia Power to recover financing costs for nuclear construction projects by including the related construction work in progress accounts in rate base during the construction period. With respect to Plant Vogtle Units 3 and 4, this legislation allows Georgia Power to recover projected financing costs of approximately $1.7 billion during the construction period beginning in 2011, which reduces the projected in-service cost to approximately $4.4 billion. The Georgia PSC has ordered Georgia Power to report against this total certified cost of approximately $6.1 billion. In addition, on December 21, 2010, the Georgia PSC approved Georgia Power’s Nuclear Construction Cost Recovery (NCCR) tariff. The NCCR tariff became effective January 1, 2011 and is expected to collect approximately $223 million in revenues during 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On February 21, 2011, the Georgia PSC voted to approve Georgia Power’s third semi-annual construction monitoring report including total costs of $1.048 billion for Plant Vogtle Units 3 and 4 incurred through June 30, 2010. In connection with its certification of Plant Vogtle Units 3 and 4, the Georgia PSC ordered Georgia Power and the PSC Staff to work together to develop a risk sharing or incentive mechanism that would provide some level of protection to ratepayers in the event of significant cost overruns, but also not penalize Georgia Power’s earnings if and when overruns are due to mandates from governing agencies. Such discussions have continued through the third semi-annual construction monitoring proceedings; however, the Georgia PSC has deferred a decision with respect to any related incentive or risk-sharing mechanism until a later date. Georgia Power will continue to file construction monitoring reports by February 28 and August 31 of each year during the construction period. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In 2009, the Southern Alliance for Clean Energy (SACE) and the Fulton County Taxpayers Foundation, Inc. (FCTF) filed separate petitions in the Superior Court of Fulton County, Georgia seeking review of the Georgia PSC’s certification order and challenging the constitutionality of the Georgia Nuclear Energy Financing Act. On May 5, 2010, the court dismissed as premature the plaintiffs’ claim challenging the Georgia Nuclear Energy Financing Act. FCTF appealed the decision, and the Georgia Supreme Court ruled against FCTF, finding the suit premature. In addition, on May 5, 2010, the Superior Court of Fulton County issued an order remanding the Georgia PSC’s certification order for inclusion of further findings of fact and conclusions of law by the Georgia PSC. In compliance with the court’s order, the Georgia PSC issued its order on remand to include further findings of fact and conclusions of law on June 23, 2010. On July 5, 2010, SACE and FCTF filed separate motions with the Georgia PSC for reconsideration of the order on remand. On August 17, 2010, the Georgia PSC voted to reaffirm its order. The matter is no longer subject to judicial review and is now concluded. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On December 2, 2010, Westinghouse submitted an AP1000 Design Certification Amendment (DCA) to the NRC. On February 10, 2011, the NRC announced that it was seeking public comment on a proposed rule to approve the DCA and amend the certified AP1000 reactor design for use in the U.S. The Advisory Committee on Reactor Safeguards also issued a letter on January 24, 2011 endorsing the issuance of the COL for Plant Vogtle Units 3 and 4. Georgia Power currently expects to receive the COL for Plant Vogtle Units 3 and 4 from the NRC in late 2011 based on the NRC’s February 16, 2011 release of its COL schedule framework. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">There are other pending technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4. Similar additional challenges at the state and federal level are expected as construction proceeds. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The ultimate outcome of these matters cannot now be determined. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Other Construction</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 6, 2010, the Georgia PSC approved Georgia Power’s request to extend the construction schedule for Plant McDonough Units 4, 5, and 6 as a result of the short-term reduction in forecasted demand, as well as the requested increase in the certified amount. As a result, the units are expected to be placed into service in January 2012, May 2012, and January 2013, respectively. The Georgia PSC has approved Georgia Power’s quarterly construction monitoring reports, including actual project expenditures incurred, through June 30, 2010. Georgia Power will continue to file quarterly construction monitoring reports throughout the construction period. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Mississippi Power Integrated Coal Gasification Combined Cycle</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2009, Mississippi Power filed for a Certificate of Public Convenience and Necessity (CPCN) with the Mississippi PSC to allow the acquisition, construction, and operation of a new electric generating plant located in Kemper County, Mississippi that would utilize an integrated coal gasification combined cycle (IGCC) technology with an output capacity of 582 MWs. The estimated cost of the plant is $2.4 billion, net of $245 million of grants awarded to the project by the DOE under the Clean Coal Power Initiative Round 2 (CCPI2). The plant will use locally mined lignite (an abundant, lower heating value coal) from a proposed mine adjacent to the plant as fuel. In conjunction with the Kemper IGCC, Mississippi Power will own a lignite mine and equipment and will acquire mineral reserves located around the plant site in Kemper County. The estimated capital cost of the mine is approximately $214 million. On May 27, 2010, Mississippi Power executed a 40-year management fee contract with Liberty Fuels Company, LLC, a subsidiary of The North American Coal Corporation, which will develop, construct, and manage the mining operations. The agreement is effective June 1, 2010 through the end of the mine reclamation. The plant, subject to federal and state reviews and certain regulatory approvals, is expected to begin commercial operation in May 2014. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On April 29, 2010, the Mississippi PSC issued an order finding that Mississippi Power’s application to acquire, construct, and operate the plant did not satisfy the requirement of public convenience and necessity in the form that the project and the related cost recovery were originally proposed by Mississippi Power, unless Mississippi Power accepted certain conditions on the issuance of the CPCN, including a cost cap of approximately $2.4 billion. Following additional proceedings, on May 26, 2010, the Mississippi PSC issued an order revising its findings from the April 29, 2010 order. Among other things, the Mississippi PSC’s May 26, 2010 order (1) approved an alternate construction cost cap of up to $2.88 billion (and any amounts that fall within specified exemptions from the cost cap; such exemptions include the cost of the lignite mine and equipment and the carbon dioxide pipeline facilities), subject to determinations by the Mississippi PSC that such costs in excess of $2.4 billion are prudent and required by the public convenience and necessity; (2) provided for the establishment of operational cost and revenue parameters based upon assumptions in Mississippi Power’s proposal; (3) approved financing cost recovery on construction work in progress (CWIP) balances, which provides for the accrual of AFUDC in 2010 and 2011 and recovery of financing costs on 100% of CWIP in 2012, 2013, and through May 1, 2014 (provided that the amount of CWIP allowed is (i) reduced by the amount of state and federal government construction cost incentives received by Mississippi Power in excess of $296 million to the extent that such amount increases cash flow for the pertinent regulatory period and (ii) justified by a showing that such CWIP allowance will benefit customers over the life of the plant). The Mississippi PSC order established periodic prudence reviews during the annual CWIP review process. More frequent prudence determinations may be requested at a later time. On May 27, 2010, Mississippi Power filed a motion with the Mississippi PSC accepting the conditions contained in the order. On June 3, 2010, the Mississippi PSC issued the CPCN for the Kemper IGCC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On August 19, 2010, the National Environmental Policy Act (NEPA) Record of Decision (ROD) by the DOE for Mississippi Power’s CCPI2 grants was noted in the Federal Register. The NEPA ROD and its accompanying final environmental impact statement were the final major hurdles necessary for Mississippi Power to receive grand funds of $245 million during the construction of the plant and $25 million during the initial operation of the Kemper IGCC. As of December 31, 2010, Mississippi Power has received $23 million and billed an additional $9 million associated with this grant. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2009, the Governor of the State of Mississippi signed into law a bill that will provide an ad valorem tax exemption for a portion of the assessed value of all property utilized in certain electric generating facilities with integrated gasification process facilities. This tax exemption, which may not exceed 50% of the total value of the project, is for projects with a capital investment from private sources of $1 billion or more. Mississippi Power expects the Kemper IGCC, including the gasification portion, to be a qualifying project under the law. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On June 17, 2010, the Mississippi Chapter of the Sierra Club (Sierra Club) filed an appeal of the Mississippi PSC’s June 3, 2010 decision to grant the CPCN for the Kemper IGCC with the Chancery Court of Harrison County, Mississippi (Chancery Court). On December 22, 2010, the Chancery Court denied Mississippi Power’s motion to dismiss the suit. A decision on the Sierra Club’s appeal from the Chancery Court is expected in March 2011. In addition, in a separate proceeding, the Sierra Club has requested an evidentiary hearing regarding the issuance of a modified Prevention of Significant Deterioration air permit for the Kemper IGCC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Mississippi Power has been awarded certain tax credits available to projects using clean and advance coal technologies under the Energy Policy Act of 2005 (Phase I tax credits) and under the Energy Improvement and Extension Act of 2008 (Phase II tax credits). In November 2006, the IRS allocated $133 million of Phase I tax credits to Mississippi Power and in April 2010, the IRS allocated $279 million of Phase II tax credits to Mississippi Power. The utilization of Phase I and Phase II credits is dependent upon meeting the IRS certification requirements, including an in-service date no later than May 2014 for the Phase I credits. In order to remain eligible for the Phase II tax credits, Mississippi Power must also capture and sequester at least 65% of the carbon dioxide produced by the plant during operations in accordance with recapture rules for Section 48A tax credits. Through December 31, 2010, Mississippi Power received tax benefits of $22 million for these tax credits. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In February 2008, Mississippi Power requested that the DOE transfer the remaining funds previously granted under the CCPI2 from a cancelled IGCC project of one of Southern Company’s affiliates that would have been located in Orlando, Florida. In December 2008, an agreement was reached to assign the remaining funds ($270 million) to the Kemper IGCC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On July 27, 2010, Mississippi Power and South Mississippi Electric Power Association (SMEPA) entered into an Asset Purchase Agreement whereby SMEPA will purchase a 17.5% undivided ownership interest in the Kemper IGCC. The closing of this transaction is conditioned upon execution of a joint ownership and operating agreement, receipt of all construction permits, appropriate regulatory approvals, financing, and other conditions. On December 2, 2010, Mississippi Power and SMEPA filed a joint petition with the Mississippi PSC requesting regulatory approval for SMEPA’s 17.5% ownership of the Kemper IGCC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Mississippi PSC has issued orders allowing Mississippi Power to defer the costs associated with the generation resource planning, evaluation, and screening activities for the Kemper IGCC as a regulatory asset. In addition, on November 12, 2010, Mississippi Power filed a petition with the Mississippi PSC requesting an accounting order that would establish regulatory assets for certain non-capital costs related to the Kemper IGCC. In its petition, Mississippi Power outlined three categories of non-capital, plant-related costs that it proposed to defer in a regulatory asset until construction is complete and a cost recovery mechanism is established for the Kemper IGCC: (1) regulatory costs; (2) cost of executing nonconstruction contracts; and (3) other project-related costs not permitted to be capitalized. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, Mississippi Power had spent a total of $255 million on the Kemper IGCC, including regulatory filing costs. Of this total, $208 million was included in CWIP (net of $33 million of CCPI2 grant funds), $12 million was recorded in other regulatory assets, $2 million was recorded in other deferred charges and assets, and $1 million was previously expensed. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The ultimate outcome of these matters cannot be determined at this time. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. JOINT OWNERSHIP AGREEMENTS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power owns an undivided interest in units 1 and 2 of Plant Miller and related facilities jointly with Power South Energy Cooperative, Inc. Georgia Power owns undivided interests in Plants Vogtle, Hatch, Scherer, and Wansley in varying amounts jointly with OPC, MEAG Power, the City of Dalton, Georgia, Florida Power & Light Company, and Jacksonville Electric Authority. In addition, Georgia Power has joint ownership agreements with OPC for the Rocky Mountain facilities and with Florida Power Corporation for a combustion turbine unit at Intercession City, Florida. Southern Power owns an undivided interest in Plant Stanton Unit A and related facilities jointly with the Orlando Utilities Commission, Kissimmee Utility Authority, and Florida Municipal Power Agency. </div>   </div>  <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: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, Alabama Power’s, Georgia Power’s, and Southern Power’s percentage ownership and investment (exclusive of nuclear fuel) in jointly owned facilities in commercial operation with the above entities were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Percent</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amount of</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></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="3" style="border-bottom: 1px solid #000000"><b>Ownership</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Investment</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Depreciation</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Vogtle (nuclear) Units 1 and 2 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right" style="font-weight: bold">45.7</td> <td nowrap="nowrap" style="font-weight: bold">%</td> <td> </td> <td align="right">$</td> <td align="right">3,292</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,935</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Hatch (nuclear) </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">50.1</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">962</td> <td> </td> <td> </td> <td> </td> <td align="right">534</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Miller (coal) Units 1 and 2 </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">91.8</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">1,253</td> <td> </td> <td> </td> <td> </td> <td align="right">477</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Scherer (coal) Units 1 and 2 </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">8.4</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">148</td> <td> </td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Wansley (coal) </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">53.5</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">700</td> <td> </td> <td> </td> <td> </td> <td align="right">208</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Rocky Mountain (pumped storage) </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">25.4</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">175</td> <td> </td> <td> </td> <td> </td> <td align="right">109</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Intercession City (combustion turbine) </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">33.3</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Plant Stanton (combined cycle) Unit A </div></td> <td> </td> <td> </td> <td align="right" style="font-weight: bold">65.0</td> <td nowrap="nowrap" style="font-weight: bold"> </td> <td> </td> <td> </td> <td align="right">156</td> <td> </td> <td> </td> <td> </td> <td align="right">25</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the portion of total construction work in progress related to Plants Miller, Scherer, Wansley, and Vogtle Units 3 and 4 was $125 million, $110 million, $11 million, and $1.3 billion, respectively. Construction at Plants Miller, Wansley, and Scherer relates primarily to environmental projects. See Note 3 under “Retail Regulatory Matters – Georgia Power — Nuclear Construction” for information on Plant Vogtle Units 3 and 4. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power, Georgia Power, and Southern Power have contracted to operate and maintain the jointly owned facilities, except for Rocky Mountain and Intercession City, as agents for their respective co-owners. The companies’ proportionate share of their plant operating expenses is included in the corresponding operating expenses in the statements of income and each company is responsible for providing its own financing. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. INCOME TAXES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company files a consolidated federal income tax return and combined state income tax returns for the States of Alabama, Georgia, and Mississippi. Under a joint consolidated income tax allocation agreement, each subsidiary’s current and deferred tax expense is computed on a stand-alone basis and no subsidiary is allocated more expense than would be paid if it filed a separate income tax return. In accordance with IRS regulations, each company is jointly and severally liable for the tax liability. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Current and Deferred Income Taxes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Details of income tax provisions are as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Federal — </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Current </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>42</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">771</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">628</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred </div></td> <td> </td> <td> </td> <td align="right"><b>898</b></td> <td> </td> <td> </td> <td> </td> <td align="right">40</td> <td> </td> <td> </td> <td> </td> <td align="right">177</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right"><b>940</b></td> <td> </td> <td> </td> <td> </td> <td align="right">811</td> <td> </td> <td> </td> <td> </td> <td align="right">805</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">State — </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Current </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(54</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">100</td> <td> </td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred </div></td> <td> </td> <td> </td> <td align="right"><b>140</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(15</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">38</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right"><b>86</b></td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> <td> </td> <td> </td> <td align="right">110</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,026</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">896</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">915</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Net cash payments for income taxes in 2010, 2009, and 2008 were $276 million, $975 million, and $537 million, respectively. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred tax liabilities — </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accelerated depreciation </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>6,833</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,938</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Property basis differences </div></td> <td> </td> <td> </td> <td align="right"><b>1,150</b></td> <td> </td> <td> </td> <td> </td> <td align="right">986</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Leveraged lease basis differences </div></td> <td> </td> <td> </td> <td align="right"><b>263</b></td> <td> </td> <td> </td> <td> </td> <td align="right">251</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td> </td> <td align="right"><b>485</b></td> <td> </td> <td> </td> <td> </td> <td align="right">384</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Under recovered fuel clause </div></td> <td> </td> <td> </td> <td align="right"><b>179</b></td> <td> </td> <td> </td> <td> </td> <td align="right">271</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Premium on reacquired debt </div></td> <td> </td> <td> </td> <td align="right"><b>78</b></td> <td> </td> <td> </td> <td> </td> <td align="right">100</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets associated with employee benefit obligations </div></td> <td> </td> <td> </td> <td align="right"><b>814</b></td> <td> </td> <td> </td> <td> </td> <td align="right">939</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets associated with asset retirement obligations </div></td> <td> </td> <td> </td> <td align="right"><b>509</b></td> <td> </td> <td> </td> <td> </td> <td align="right">486</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right"><b>246</b></td> <td> </td> <td> </td> <td> </td> <td align="right">216</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total </div></td> <td> </td> <td> </td> <td align="right"><b>10,557</b></td> <td> </td> <td> </td> <td> </td> <td align="right">9,571</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred tax assets — </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Federal effect of state deferred taxes </div></td> <td> </td> <td> </td> <td align="right"><b>386</b></td> <td> </td> <td> </td> <td> </td> <td align="right">302</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">State effect of federal deferred taxes </div></td> <td> </td> <td> </td> <td align="right"><b>50</b></td> <td> </td> <td> </td> <td> </td> <td align="right">108</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td> </td> <td align="right"><b>1,179</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,435</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Over recovered fuel clause </div></td> <td> </td> <td> </td> <td align="right"><b>40</b></td> <td> </td> <td> </td> <td> </td> <td align="right">119</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other property basis differences </div></td> <td> </td> <td> </td> <td align="right"><b>119</b></td> <td> </td> <td> </td> <td> </td> <td align="right">132</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred costs </div></td> <td> </td> <td> </td> <td align="right"><b>100</b></td> <td> </td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Cost of removal </div></td> <td> </td> <td> </td> <td align="right"><b>52</b></td> <td> </td> <td> </td> <td> </td> <td align="right">109</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Unbilled revenue </div></td> <td> </td> <td> </td> <td align="right"><b>126</b></td> <td> </td> <td> </td> <td> </td> <td align="right">96</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other comprehensive losses </div></td> <td> </td> <td> </td> <td align="right"><b>69</b></td> <td> </td> <td> </td> <td> </td> <td align="right">81</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Asset retirement obligations </div></td> <td> </td> <td> </td> <td align="right"><b>509</b></td> <td> </td> <td> </td> <td> </td> <td align="right">486</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right"><b>523</b></td> <td> </td> <td> </td> <td> </td> <td align="right">458</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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> </td> <td align="right"><b>3,153</b></td> <td> </td> <td> </td> <td> </td> <td align="right">3,391</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total deferred tax liabilities, net </div></td> <td> </td> <td> </td> <td align="right"><b>7,404</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6,180</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Portion included in prepaid expenses (accrued income taxes), net </div></td> <td> </td> <td> </td> <td align="right"><b>117</b></td> <td> </td> <td> </td> <td> </td> <td align="right">229</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred state tax assets </div></td> <td> </td> <td> </td> <td align="right"><b>91</b></td> <td> </td> <td> </td> <td> </td> <td align="right">105</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Valuation allowance </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(58</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Accumulated deferred income taxes </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>7,554</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,455</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, Southern Company had a State of Georgia net operating loss (NOL) carryforward totaling $0.9 billion, which could result in net state income tax benefits of $53 million, if utilized. However, Southern Company has established a valuation allowance for the potential $53 million tax benefit due to the remote likelihood that the tax benefit will be realized. These NOLs expire between 2011 and 2021. Beginning in 2002, the State of Georgia allowed Southern Company to file a combined return, which has prevented the creation of any additional NOL carryforwards. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the tax-related regulatory assets and liabilities were $1.3 billion and $237 million, respectively. These assets are attributable to tax benefits flowed through to customers in prior years, to deferred taxes previously recognized at rates lower than the current enacted tax law, and to taxes applicable to capitalized interest. In 2010, $82 million was deferred as a regulatory asset related to the impact of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (together, the Acts). The Acts eliminated the deductibility of healthcare costs that are covered by federal Medicare subsidy payments. These liabilities are attributable to deferred taxes previously recognized at rates higher than the current enacted tax law and to unamortized investment tax credits. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with regulatory requirements, deferred investment tax credits are amortized over the life of the related property with such amortization normally applied as a credit to reduce depreciation in the statements of income. Credits amortized in this manner amounted to $23 million in 2010, $24 million in 2009, and $23 million in 2008. At December 31, 2010, all investment tax credits available to reduce federal income taxes payable had been utilized. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On September 27, 2010, the Small Business Jobs and Credit Act of 2010 (SBJCA) was signed into law. The SBJCA includes an extension of the 50% bonus depreciation for certain property acquired and placed in service in 2010 (and for certain long-term construction projects to be placed in service in 2011). Additionally, on December 17, 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (Tax Relief Act) was signed into law. Major tax incentives in the Tax Relief Act include 100% bonus depreciation for property placed in service after September 8, 2010 and through 2011 (and for certain long-term construction projects to be placed in service in 2012) and 50% bonus depreciation for property placed in service in 2012 (and for certain long-term construction projects to be placed in service in 2013). The application of the bonus depreciation provisions in these acts in 2010 significantly increased deferred tax liabilities related to accelerated depreciation. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Effective Tax Rate</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Federal statutory rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>35.0</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">35.0</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">35.0</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">State income tax, net of federal deduction </div></td> <td> </td> <td> </td> <td align="right"><b>1.8</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2.1</td> <td> </td> <td> </td> <td> </td> <td align="right">2.6</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Employee stock plans dividend deduction </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(1.2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1.4</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1.3</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Non-deductible book depreciation </div></td> <td> </td> <td> </td> <td align="right"><b>0.8</b></td> <td> </td> <td> </td> <td> </td> <td align="right">0.9</td> <td> </td> <td> </td> <td> </td> <td align="right">0.8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Difference in prior years’ deferred and current tax rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(0.1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.2</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">AFUDC-Equity </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2.2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(2.7</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1.9</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Production activities deduction </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.7</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.4</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">ITC basis difference </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(0.4</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Leveraged lease termination </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.9</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">MC Asset Recovery </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2.7</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Donations </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.4</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(0.2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(0.1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1.0</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Effective income tax rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>33.5</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">34.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">33.6</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s effective tax rate is lower than the statutory rate primarily due to the employee stock plans’ dividend deduction and AFUDC equity, which is not taxable. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s 2010 effective tax rate decreased from 2009 primarily due to the $202 million charge recorded for the MC Asset Recovery litigation settlement in 2009, which completed and resolved all claims by MC Asset Recovery against Southern Company. Southern Company is currently evaluating potential recovery of the settlement payment through various means including insurance, claims in U.S. Bankruptcy Court, and other avenues. The degree to which any recovery is realized will determine, in part, the final income tax treatment of the settlement payment. The ultimate outcome of any such recovery and/or income tax treatment cannot be determined at this time. The decrease in Southern Company’s effective tax rate was partially offset by the elimination of the production activities deduction in 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The American Jobs Creation Act of 2004 created a tax deduction for a portion of income attributable to U.S. production activities as defined in Section 199 of the Internal Revenue Code (production activities deduction). The deduction is equal to a stated percentage of qualified production activities net income. The percentage was phased in over the years 2005 through 2010. For 2008 and 2009, a 6% reduction was available to Southern Company. Thereafter, the allowed rate is 9%; however, due to increased tax deductions from bonus depreciation and pension contributions, there was no domestic production deduction available to Southern Company for 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Unrecognized Tax Benefits</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For 2010, the total amount of unrecognized tax benefits increased by $97 million, resulting in a balance of $296 million as of December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Changes during the year in unrecognized tax benefits were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td> </tr>   <tr> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Unrecognized tax benefits at beginning of year </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>199</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">146</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">264</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Tax positions from current periods </div></td> <td> </td> <td> </td> <td align="right"><b>62</b></td> <td> </td> <td> </td> <td> </td> <td align="right">53</td> <td> </td> <td> </td> <td> </td> <td align="right">49</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Tax positions increase from prior periods </div></td> <td> </td> <td> </td> <td align="right"><b>62</b></td> <td> </td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> <td> </td> <td> </td> <td align="right">130</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Tax positions decrease from prior periods </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(27</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(10</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Reductions due to settlements </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(297</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reductions due to expired statute of limitations </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(2</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Balance at end of year </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>296</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">199</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">146</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The tax positions from current periods relate primarily to the Georgia state tax credits litigation, tax accounting method change for repairs, and other miscellaneous uncertain tax positions. The tax positions increase from prior periods relates primarily to the tax accounting method change for repairs and other miscellaneous positions. The tax positions decrease from prior periods relates primarily to the Georgia state tax credit litigation and miscellaneous tax positions. See Note 3 under “Income Tax Matters — Georgia State Income Tax Credits” and “Tax Method of Accounting for Repairs” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The impact on Southern Company’s effective tax rate, if recognized, is as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td> </tr>   <tr> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Tax positions impacting the effective tax rate </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>217</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">199</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">143</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Tax positions not impacting the effective tax rate </div></td> <td> </td> <td> </td> <td align="right"><b>79</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Balance of unrecognized tax benefits </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>296</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">199</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">146</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The tax positions impacting the effective tax rate primarily relate to Georgia state tax credit litigation at Georgia Power and the production activities deduction tax position. However, as discussed in Note 3 under “Income Tax Matters,” if Georgia Power is successful in its claim against the Georgia DOR, a significant portion of the tax benefit is expected to be deferred and returned to retail customers and therefore no material impact to net income is expected. The tax positions not impacting the effective tax rate relate to the timing difference associated with the tax accounting method change for repairs. These amounts are presented on a gross basis without considering the related federal or state income tax impact. See Note 3 under “Income Tax Matters — Georgia State Income Tax Credits” and “Tax Method of Accounting for Repairs” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Accrued interest for unrecognized tax benefits was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td> </tr>   <tr> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest accrued at beginning of year </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>21</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">15</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">31</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest reclassified due to settlements </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(49</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest accrued during the year </div></td> <td> </td> <td> </td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> <td> </td> <td> </td> <td align="right">33</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at end of year </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>29</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">15</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company classifies interest on tax uncertainties as interest expense. The net amount of interest accrued during 2010 was primarily associated with the Georgia state tax credit litigation. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company did not accrue any penalties on uncertain tax positions. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">It is reasonably possible that the amount of the unrecognized tax benefits associated with a majority of Southern Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. The resolution of the Georgia state tax credit litigation would substantially reduce the balances. The conclusion or settlement of state audits could also impact the balances significantly. At this time, an estimate of the range of reasonably possible outcomes cannot be determined. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The IRS has audited and closed all tax returns prior to 2007. The audits for the state returns have either been concluded, or the statute of limitations has expired, for years prior to 2006. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. FINANCING</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Long-Term Debt Payable to Affiliated Trusts</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the traditional operating companies have formed certain wholly-owned trust subsidiaries for the purpose of issuing preferred securities. The proceeds of the related equity investments and preferred security sales were loaned back to the applicable traditional operating company through the issuance of junior subordinated notes totaling $412 million, which constitute substantially all of the assets of these trusts and are reflected in the balance sheets as long-term debt. Each traditional operating company considers that the mechanisms and obligations relating to the preferred securities issued for its benefit, taken together, constitute a full and unconditional guarantee by it of the respective trust’s payment obligations with respect to these securities. At December 31, 2010, preferred securities of $400 million were outstanding. See Note 1 under “Variable Interest Entities” for additional information on the accounting treatment for these trusts and the related securities. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Securities Due Within One Year</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of scheduled maturities and redemptions of securities due within one year at December 31 was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pollution control revenue bonds </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Capitalized leases </div></td> <td> </td> <td> </td> <td align="right"><b>23</b></td> <td> </td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Senior notes </div></td> <td> </td> <td> </td> <td align="right"><b>600</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,090</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other long-term debt </div></td> <td> </td> <td> </td> <td align="right"><b>670</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,301</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,113</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Maturities through 2015 applicable to total long-term debt are as follows: $1.3 billion in 2011; $1.8 billion in 2012; $1.7 billion in 2013; $441 million in 2014; and $1.2 billion in 2015. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Bank Term Loans</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Certain of the traditional operating companies have entered into bank term loan agreements. In 2010, Mississippi Power entered into a one-year $125 million aggregate principal amount long-term floating rate bank loan that bears interest based on one-month London Interbank Offered Rate (LIBOR). The proceeds from this loan were used to repay maturing long-term and short-term indebtedness and for other general corporate purposes, including Mississippi Power’s continuous construction program. At December 31, 2010 and 2009, certain of the traditional operating companies had outstanding bank term loans totaling $615 million and $490 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Senior Notes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company and its subsidiaries issued a total of $2.9 billion of senior notes in 2010. Southern Company issued $400 million, and the traditional operating companies’ combined issuances totaled $2.5 billion. The proceeds of these issuances were used to repay long-term and short-term indebtedness and for other general corporate purposes including the applicable subsidiary’s continuous construction program. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010 and 2009, Southern Company and its subsidiaries had a total of $15.2 billion and $14.7 billion, respectively, of senior notes outstanding. At December 31, 2010 and 2009, Southern Company had a total of $1.6 billion and $1.8 billion, respectively, of senior notes outstanding. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Subsequent to December 31, 2010, Georgia Power issued $300 million aggregate principal amount of Series 2011A Floating Rate Senior Notes due January 15, 2013. The proceeds were used to repay a portion of Georgia Power’s outstanding short-term indebtedness and for general corporate purposes, including Georgia Power’s continuous construction program. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Pollution Control and Other Revenue Bonds</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Pollution control obligations represent loans to the traditional operating companies from public authorities of funds derived from sales by such authorities of revenue bonds issued to finance pollution control and solid waste disposal facilities. The traditional operating companies have $3.1 billion of outstanding pollution control revenue bonds and are required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. Proceeds from certain issuances are restricted until qualifying expenditures are incurred. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In December 2010, Mississippi Power incurred obligations relating to the issuance of $100 million of revenue bonds in two series, each of which is due December 1, 2040. The first series of $50 million was issued with an initial fixed rate of 2.25% through January 14, 2013 and the second series of $50 million was issued with a floating rate. Proceeds from the second series bonds were classified as restricted cash at December 31, 2010 and these bonds were redeemed on February 8, 2011. The proceeds from the first series bonds were used to finance the acquisition and construction of buildings and immovable equipment in connection with Mississippi Power’s construction of the Kemper IGCC. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Assets Subject to Lien</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Each of Southern Company’s subsidiaries is organized as a legal entity, separate and apart from Southern Company and its other subsidiaries. Alabama Power and Gulf Power have granted one or more liens on certain of their respective property in connection with the issuance of certain pollution control revenue bonds with an outstanding principal amount of $194 million. There are no agreements or other arrangements among the Southern Company system companies under which the assets of one company have been pledged or otherwise made available to satisfy obligations of Southern Company or any of its other subsidiaries. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Bank Credit Arrangements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table outlines the credit arrangements by company: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="19%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="3%"> </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 nowrap="nowrap" align="center" colspan="7"><b>Executable</b></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="7"><b>Expires Within One</b></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 nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Term-Loans</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Expires</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Year</b><sup style="font-size: 85%; vertical-align: text-top"><b>(a)</b></sup></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> </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> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Term</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>No Term</b></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 nowrap="nowrap" align="center" colspan="3"><b>One</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Two</b></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="3"><b>Loan</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Loan</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Company</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Unused</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Year</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Years</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2012</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2013</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Option</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Option</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i>(in millions)</i></td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i>(in millions)</i></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Company </div></td> <td> </td> <td align="right">$</td> <td align="right">950</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">950</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">950</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Alabama Power </div></td> <td> </td> <td> </td> <td align="right">1,271</td> <td> </td> <td> </td> <td> </td> <td align="right">1,271</td> <td> </td> <td> </td> <td> </td> <td align="right">372</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">506</td> <td> </td> <td> </td> <td> </td> <td align="right">765</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">372</td> <td> </td> <td> </td> <td> </td> <td align="right">134</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Georgia Power </div></td> <td> </td> <td> </td> <td align="right">1,715</td> <td> </td> <td> </td> <td> </td> <td align="right">1,703</td> <td> </td> <td> </td> <td> </td> <td align="right">220</td> <td> </td> <td> </td> <td> </td> <td align="right">40</td> <td> </td> <td> </td> <td> </td> <td align="right">595</td> <td> </td> <td> </td> <td> </td> <td align="right">1,120</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">260</td> <td> </td> <td> </td> <td> </td> <td align="right">335</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Gulf Power </div></td> <td> </td> <td> </td> <td align="right">240</td> <td> </td> <td> </td> <td> </td> <td align="right">240</td> <td> </td> <td> </td> <td> </td> <td align="right">210</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">240</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">210</td> <td> </td> <td> </td> <td> </td> <td align="right">30</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Mississippi Power </div></td> <td> </td> <td> </td> <td align="right">161</td> <td> </td> <td> </td> <td> </td> <td align="right">161</td> <td> </td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td> </td> <td align="right">161</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">106</td> <td> </td> <td> </td> <td> </td> <td align="right">55</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Power </div></td> <td> </td> <td> </td> <td align="right">400</td> <td> </td> <td> </td> <td> </td> <td align="right">400</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">400</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> <td colspan="1" align="left" style="border-top: 0px double #000000"> </td> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> <td colspan="1" align="left" style="border-top: 0px double #000000"> </td> <td colspan="7" 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="right">$</td> <td align="right">4,797</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4,785</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">927</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">81</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,562</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3,235</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,008</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">554</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> <td colspan="1" align="left" style="border-top: 0px double #000000"> </td> <td colspan="11" align="left" style="border-top: 3px double #000000"> </td> <td colspan="1" align="left" style="border-top: 0px double #000000"> </td> <td colspan="7" align="left" style="border-top: 3px double #000000"> </td> </tr>  </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">(a)</td> <td> </td> <td>Reflects facilities expiring on or before December 31, 2011.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">All of the credit arrangements require payment of commitment fees based on the unused portion of the commitments or the maintenance of compensating balances with the banks. Commitment fees average approximately <font style="font-size: 70%"><sup>1</sup></font>/<font style="font-size: 60%">2</font> of 1% or less for Southern Company, the traditional operating companies, and Southern Power. Compensating balances are not legally restricted from withdrawal. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Most of the credit arrangements with banks have covenants that limit debt levels to 65% of total capitalization, as defined in the agreements. For purposes of these definitions, debt excludes the long-term debt payable to affiliated trusts and, in certain arrangements, other hybrid securities. At December 31, 2010, Southern Company, Southern Power, and the traditional operating companies were each in compliance with their respective debt limit covenants. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the credit arrangements typically contain cross default provisions that would be triggered if the borrower defaulted on other indebtedness above a specified threshold. The cross default provisions are restricted only to the indebtedness, including any guarantee obligations, of the company that has such credit arrangements. Southern Company and its subsidiaries are currently in compliance with all such covenants. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A portion of the $4.8 billion unused credit with banks is allocated to provide liquidity support to the traditional operating companies’ variable rate pollution control revenue bonds. The amount of variable rate pollution control revenue bonds requiring liquidity support as of December 31, 2010 was approximately $1.3 billion. Subsequent to December 31, 2010, Georgia Power’s remarketing of $137 million of puttable variable rate pollution control bonds increased the total requiring liquidity support to $522 million. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company, the traditional operating companies, and Southern Power make short-term borrowings primarily through commercial paper programs that have the liquidity support of committed bank credit arrangements. Southern Company and the traditional operating companies may also borrow through various other arrangements with banks. The amount of short-term bank loans included in notes payable in the balance sheets at December 31, 2010 was $1 million. There were no short term-bank loans included in notes payable in the balance sheets at December 31, 2009. At December 31, 2010, the Southern Company system had approximately $1.3 billion of commercial paper borrowings outstanding with a weighted average interest rate of 0.3% per annum. During 2010, Southern Company had an average of $690 million of commercial paper outstanding at a weighted average interest rate of 0.3% per annum and the maximum amount outstanding was $1.3 billion. At December 31, 2009, the Southern Company system had approximately $638 million of commercial paper borrowings outstanding with a weighted average interest rate of 0.3% per annum. During 2009, Southern Company had an average of $956 million of commercial paper outstanding at a weighted average interest rate of 0.4% per annum and the maximum amount outstanding was $1.4 billion. </div>   </div>  <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>Changes in Redeemable Preferred Stock of Subsidiaries</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Each of the traditional operating companies has issued preferred and/or preference stock. The preferred stock of Alabama Power and Mississippi Power contains a feature that allows the holders to elect a majority of such subsidiary’s board of directors if dividends are not paid for four consecutive quarters. Because such a potential redemption-triggering event is not solely within the control of Alabama Power and Mississippi Power, this preferred stock is presented as “Redeemable Preferred Stock of Subsidiaries” in a manner consistent with temporary equity under applicable accounting standards. The preferred and preference stock at Georgia Power and the preference stock at Alabama Power and Gulf Power do not contain such a provision that would allow the holders to elect a majority of such subsidiary’s board. As a result, under applicable accounting standards, the preferred and preference stock at Georgia Power and the preference stock at Alabama Power and Gulf Power are required to be shown as “noncontrolling interest,” separately presented as a component of “Stockholders’ Equity” on Southern Company’s balance sheets, statements of capitalization, and statements of stockholders’ equity. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents changes during the year in redeemable preferred stock of subsidiaries for Southern Company: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Redeemable Preferred Stock</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>of Subsidiaries</b></td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2007</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">498</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Issued </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Redeemed </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(125</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" 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>Balance at December 31, 2008</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">375</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Issued </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Redeemed </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">375</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Issued </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Redeemed </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>375</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. COMMITMENTS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Construction Program</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The construction programs of the Company’s subsidiaries are currently estimated to include a base level investment of $4.9 billion in 2011, $5.1 billion in 2012, and $4.5 billion in 2013. These amounts include $335 million, $207 million, and $220 million in 2011, 2012, and 2013, respectively, for construction expenditures related to contractual purchase commitments for nuclear fuel included herein under “Fuel and Purchased Power Commitments.” Included in these estimated amounts are environmental expenditures to comply with existing statutes and regulations of $341 million, $427 million, and $452 million for 2011, 2012, and 2013, respectively. The capital budget amounts for 2011-2013 include amounts for the construction of Plant Vogtle Units 3 and 4. Of the estimated total $4.4 billion in capital costs for Plant Vogtle Units 3 and 4, approximately $943 million is expected to be incurred from 2014 through 2017. The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental statutes and regulations; changes in generating plants, including unit retirement and replacement decisions, to meet new regulatory requirements; changes in FERC rules and regulations; PSC approvals; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; storm impacts; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered. At December 31, 2010, significant purchase commitments were outstanding in connection with the ongoing construction program, which includes new facilities and capital improvements to transmission, distribution, and generation facilities, including those to meet environmental standards. See Note 3 under “Retail Regulatory Matters – Georgia Power – Nuclear Construction,” “Retail Regulatory Matters – Georgia Power – Other Construction,” and “Retail Regulatory Matters – Mississippi Power Integrated Coal Gasification Combined Cycle” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Long-Term Service Agreements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The traditional operating companies and Southern Power have entered into long-term service agreements (LTSAs) with General Electric (GE), Alstom Power, Inc., Mitsubishi Power Systems Americas, Inc., and Siemens AG for the purpose of securing maintenance support for the combined cycle and combustion turbine generating facilities owned or under construction by the subsidiaries. The LTSAs cover all planned inspections on the covered equipment, which generally includes the cost of all labor and materials. The LTSAs are also obligated to cover the costs of unplanned maintenance on the covered equipment subject to limits and scope specified in each contract. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In general, these LTSAs are in effect through two major inspection cycles per unit. Scheduled payments under the LTSAs, which are subject to price escalation, are made at various intervals based on actual operating hours or number of gas turbine starts of the respective units. Total remaining payments under these agreements for facilities owned are currently estimated at $2.1 billion over the remaining life of the agreements, which are currently estimated to range up to 23 years. However, the LTSAs contain various cancellation provisions at the option of the purchasers. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Georgia Power has also entered into a LTSA with GE through 2014 for neutron monitoring system parts and electronics at Plant Hatch. Total remaining payments to GE under this agreement are currently estimated at $6 million. The contract contains cancellation provisions at the option of Georgia Power. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Payments made under the LTSAs prior to the performance of any work are recorded as a prepayment in the balance sheets. All work performed is capitalized or charged to expense (net of any joint owner billings), as appropriate based on the nature of the work. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Limestone Commitments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As part of Southern Company’s program to reduce sulfur dioxide emissions from its coal plants, the traditional operating companies have entered into various long-term commitments for the procurement of limestone to be used in flue gas desulfurization equipment. Limestone contracts are structured with tonnage minimums and maximums in order to account for fluctuations in coal burn and sulfur content. Southern Company has a minimum contractual obligation of 6.9 million tons, equating to approximately $282 million, through 2019. Estimated expenditures (based on minimum contracted obligated dollars) over the next five years are $39 million in 2011, $40 million in 2012, $42 million in 2013, $43 million in 2014, and $29 million in 2015. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fuel and Purchased Power Commitments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">To supply a portion of the fuel requirements of the generating plants, Southern Company has entered into various long-term commitments for the procurement of fossil, biomass fuel, and nuclear fuel. In most cases, these contracts contain provisions for price escalations, minimum purchase levels, and other financial commitments. Coal commitments include forward contract purchases for sulfur dioxide and nitrogen oxide emissions allowances. Natural gas purchase commitments contain fixed volumes with prices based on various indices at the time of delivery; amounts included in the chart below represent estimates based on New York Mercantile Exchange future prices at December 31, 2010. Also, Southern Company has entered into various long-term commitments for the purchase of capacity and electricity. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Total estimated minimum long-term obligations at December 31, 2010 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="19" style="border-bottom: 1px solid #000000"><b>Commitments</b></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="3" style="border-bottom: 1px solid #000000">Natural Gas</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Coal</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Nuclear Fuel</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Biomass Fuel</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Purchased Power*</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="18"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></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> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">1,357</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3,810</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">335</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">260</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2012 </div></td> <td> </td> <td> </td> <td align="right">1,226</td> <td> </td> <td> </td> <td> </td> <td align="right">1,882</td> <td> </td> <td> </td> <td> </td> <td align="right">207</td> <td> </td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td> </td> <td align="right">269</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2013 </div></td> <td> </td> <td> </td> <td align="right">1,054</td> <td> </td> <td> </td> <td> </td> <td align="right">1,362</td> <td> </td> <td> </td> <td> </td> <td align="right">220</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">237</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2014 </div></td> <td> </td> <td> </td> <td align="right">908</td> <td> </td> <td> </td> <td> </td> <td align="right">873</td> <td> </td> <td> </td> <td> </td> <td align="right">208</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">268</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2015 </div></td> <td> </td> <td> </td> <td align="right">779</td> <td> </td> <td> </td> <td> </td> <td align="right">783</td> <td> </td> <td> </td> <td> </td> <td align="right">141</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">291</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2016 and thereafter </div></td> <td> </td> <td> </td> <td align="right">3,413</td> <td> </td> <td> </td> <td> </td> <td align="right">1,798</td> <td> </td> <td> </td> <td> </td> <td align="right">807</td> <td> </td> <td> </td> <td> </td> <td align="right">110</td> <td> </td> <td> </td> <td> </td> <td align="right">2,439</td> <td> </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">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">8,737</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10,508</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,918</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">178</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3,764</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 3px double #000000"> </td> </tr>  </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>Certain PPAs reflected in the table are accounted for as operating leases.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Additional commitments for fuel will be required to supply Southern Company’s future needs. Total charges for nuclear fuel included in fuel expense amounted to $184 million in 2010, $160 million in 2009, and $147 million in 2008. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Coal commitments for Mississippi Power include a minimum annual management fee of $38 million beginning in 2014 from the executed 40-year management contract with Liberty Fuels, LLC related to the Kemper IGCC. </div>   </div>  <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>Operating Leases</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In 2001, Mississippi Power began the initial 10-year term of a lease agreement for a combined cycle generating facility built at Plant Daniel for approximately $370 million. In 2003, the generating facility was acquired by Juniper Capital L.P. (Juniper), a limited partnership whose investors are unaffiliated with Mississippi Power. Simultaneously, Juniper entered into a restructured lease agreement with Mississippi Power. Juniper has also entered into leases with other parties unrelated to Mississippi Power. The assets leased by Mississippi Power comprise less than 50% of Juniper’s assets. Mississippi Power is not required to consolidate the leased assets and related liabilities, and the lease with Juniper is considered an operating lease. The lease agreement is treated as an operating lease for accounting purposes as well as for both retail and wholesale rate recovery purposes. The initial lease term ends in 2011, and the lease includes a purchase and renewal option based on the cost of the facility at the inception of the lease. Mississippi Power is required to amortize approximately 4% of the initial acquisition cost over the initial lease term. In April 2010, Mississippi Power was required to notify the lessor, Juniper, if it intended to terminate the lease at the end of the initial term expiring in October 2011. Mississippi Power chose not to give notice to terminate the lease. Mississippi Power has the option to purchase the Plant Daniel combined cycle generating units for approximately $354 million or renew the lease for approximately $31 million annually for 10 years. Mississippi Power will have to provide notice of its intent to either renew the lease or purchase the facility by July 2011. If the lease is renewed, the agreement calls for Mississippi Power to amortize an additional 17% of the initial completion cost over the renewal period. Upon termination of the lease, at Mississippi Power’s option, it may either exercise its purchase option or the facility can be sold to a third party. If Mississippi Power does not exercise either its purchase option or its renewal option, Mississippi Power could lose its rights to some or all of the 1,064 MWs of capacity at that time. The ultimate outcome of this matter cannot be determined at this time. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The lease provides for a residual value guarantee, approximately 73% of the acquisition cost, by Mississippi Power that is due upon termination of the lease in the event that Mississippi Power does not renew the lease or purchase the assets and that the fair market value is less than the unamortized cost of the asset. A liability of approximately $2 million, $3 million, and $5 million for the fair market value of this residual value guarantee is included in the balance sheets as of December 31, 2010, 2009, and 2008, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company also has other operating lease agreements with various terms and expiration dates. Total operating lease expenses were $188 million, $186 million, and $184 million for 2010, 2009, and 2008, respectively. Southern Company includes any step rents, escalations, and lease concessions in its computation of minimum lease payments, which are recognized on a straight-line basis over the minimum lease term. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, estimated minimum lease payments for noncancelable operating leases were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Minimum Lease Payments</b></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="3" style="border-bottom: 1px solid #000000">Plant Daniel</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Barges & Rail Cars</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Other</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Total</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">74</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">52</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">154</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2012 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">58</td> <td> </td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> <td> </td> <td> </td> <td align="right">93</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2013 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">48</td> <td> </td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> <td> </td> <td> </td> <td align="right">77</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2014 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">39</td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> <td> </td> <td> </td> <td align="right">63</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2015 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2016 and thereafter </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16</td> <td> </td> <td> </td> <td> </td> <td align="right">87</td> <td> </td> <td> </td> <td> </td> <td align="right">103</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" 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">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">249</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">244</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">521</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the traditional operating companies, a majority of the barge and rail car lease expenses are recoverable through fuel cost recovery provisions. In addition to the above rental commitments, Alabama Power and Georgia Power have obligations upon expiration of certain leases with respect to the residual value of the leased property. These leases expire in 2011, 2012, 2013, 2014, 2015, and 2016 and the maximum obligations under these leases are $40 million, $1 million, $39 million, $8 million, $5 million, and $4 million, respectively. At the termination of the leases, the lessee may either exercise its purchase option, or the property can be sold to a third party. Alabama Power and Georgia Power expect that the fair market value of the leased property would substantially reduce or eliminate the payments under the residual value obligations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Guarantees</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As discussed earlier in this Note under “Operating Leases,” Alabama Power, Georgia Power, and Mississippi Power have entered into certain residual value guarantees. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. COMMON STOCK</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Stock Issued</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">During 2010, Southern Company issued 19.6 million shares of common stock for $629 million through the Southern Investment Plan and employee and director stock plans. In addition, Southern Company issued 4.1 million shares of common stock through at-the-market issuances pursuant to sales agency agreements related to Southern Company’s continuous equity offering program and received cash proceeds of $143 million, net of $1 million in fees and commissions. In 2009, Southern Company raised $673 million from the issuance of 22.6 million new common shares through the Southern Investment Plan and employee and director stock plans. In 2009, Southern Company issued 19.9 million shares of common stock through at-the-market issuances pursuant to sales agency agreements related to Southern Company’s continuous equity offering program and received cash proceeds of $613 million, net of $6 million in fees and commissions. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Shares Reserved</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, a total of 66 million shares were reserved for issuance pursuant to the Southern Investment Plan, the Employee Savings Plan, the Outside Directors Stock Plan, and the Omnibus Incentive Compensation Plan (which includes stock options and performance shares units as discussed below). Of the total 66 million shares reserved, there were 10 million shares of common stock remaining available for awards under the stock option and performance share plans as of December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Stock Option Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company provides non-qualified stock options to a large segment of Southern Company system employees ranging from line management to executives. As of December 31, 2010, there were 7,330 current and former employees participating in the stock option plan. The prices of options were at the fair market value of the shares on the dates of grant. These options become exercisable pro rata over a maximum period of three years from the date of grant. Southern Company generally recognizes stock option expense on a straight-line basis over the vesting period which equates to the requisite service period; however, for employees who are eligible for retirement, the total cost is expensed at the grant date. Options outstanding will expire no later than 10 years after the date of grant, unless terminated earlier by the Southern Company Board of Directors in accordance with the stock option plan. For certain stock option awards, a change in control will provide accelerated vesting. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The estimated fair values of stock options granted in 2010, 2009, and 2008 were derived using the Black-Scholes stock option pricing model. Expected volatility was based on historical volatility of Southern Company’s stock over a period equal to the expected term. Southern Company used historical exercise data to estimate the expected term that represents the period of time that options granted to employees are expected to be outstanding. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant that covers the expected term of the stock options. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the assumptions used in the pricing model and the weighted average grant-date fair value of stock options granted: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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="left"><b>Year Ended December 31</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2009</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2008</td> </tr>   <tr style="font-size: 1px"> <td colspan="13" 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">Expected volatility </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>17.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">15.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">13.1</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected term <i>(in years)</i> </div></td> <td> </td> <td> </td> <td align="right"><b>5.0</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>2.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">1.9</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">2.8</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividend yield </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>5.6</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">5.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.5</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average grant-date fair value </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>2.23</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1.80</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2.37</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s activity in the stock option plan for 2010 is summarized below: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Shares Subject</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>To Option</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Exercise Price</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" 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">Outstanding at December 31, 2009 </div></td> <td> </td> <td> </td> <td align="right">48,247,319</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">32.10</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">9,582,288</td> <td> </td> <td> </td> <td> </td> <td align="right">31.22</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7,024,176</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">28.15</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(93,845</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31.02</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Outstanding at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>50,711,586</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.48</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Exercisable at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>34,564,434</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.81</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <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">The number of stock options vested, and expected to vest in the future, as of December 31, 2010 was not significantly different from the number of stock options outstanding at December 31, 2010 as stated above. As of December 31, 2010, the weighted average remaining contractual term for the options outstanding and options exercisable was approximately six years and five years, respectively, and the aggregate intrinsic value for the options outstanding and options exercisable was $292 million and $188 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, there was $5 million of total unrecognized compensation cost related to stock option awards not yet vested. That cost is expected to be recognized over a weighted-average period of approximately 10 months. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the years ended December 31, 2010, 2009, and 2008, total compensation cost for stock option awards recognized in income was $22 million, $23 million, and $20 million, respectively, with the related tax benefit also recognized in income of $9 million, $9 million, and $8 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The total intrinsic value of options exercised during the years ended December 31, 2010, 2009, and 2008 was $57 million, $9 million, and $45 million, respectively. The actual tax benefit realized by the Company for the tax deductions from stock option exercises totaled $22 million, $4 million, and $17 million for the years ended December 31, 2010, 2009, and 2008, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has a policy of issuing shares to satisfy share option exercises. Cash received from issuances related to option exercises under the share-based payment arrangements for the years ended December 31, 2010, 2009, and 2008 was $198 million, $19 million, and $113 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Performance Share Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In 2010, Southern Company implemented the performance share program under its omnibus incentive compensation plan, which provides performance share award units to a large segment of Southern Company system employees ranging from line management to executives. The performance share units granted under the plan vest at the end of a three-year performance period which equates to the requisite service period. Employees that retire prior to the end of the three-year period receive a pro rata number of shares, issued at the end of the performance period, based on actual months of service prior to retirement. The value of the award units is based on Southern Company’s total shareholder return (TSR) over the three-year performance period which measures Southern Company’s relative performance against a group of industry peers. The performance shares are delivered in common stock following the end of the performance period based on Southern Company’s actual TSR and may range from 0% to 200% of the original target performance share amount. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of performance share awards is determined as of the grant date using a Monte Carlo simulation model to estimate the TSR of Southern Company’s stock among the industry peers over the performance period. The Company recognizes compensation expense on a straight-line basis over the three-year performance period without remeasurement. Compensation expense for awards where the service condition is met is recognized regardless of the actual number of shares issued. Expected volatility used in the model of 20.7% was based on historical volatility of Southern Company’s stock over a period equal to the performance period. The risk-free rate of 1.4% was based on the U.S. Treasury yield curve in effect at the time of grant that covers the performance period of the award units. The annualized dividend rate at the time of the grant was $1.75. During 2010, 1,050,052 performance share units were granted with a weighted-average grant date fair value of $30.13. During 2010, 141,711 performance share units were forfeited resulting in 908,341 unvested units outstanding at December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended December 31, 2010, total compensation cost for performance share units recognized in income was $9 million, with the related tax benefit also recognized in income of $4 million. As of December 31, 2010, there was $18 million of total unrecognized compensation cost related to performance share award units that will be recognized over the next two years. </div>   </div>  <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>Diluted Earnings Per Share</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For Southern Company, the only difference in computing basic and diluted earnings per share is attributable to awards outstanding under the stock option and performance share plans. The effect of both stock options and performance share award units were determined using the treasury stock method. Shares used to compute diluted earnings per share were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Average Common Stock Shares</b></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="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: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in thousands)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">As reported shares </div></td> <td> </td> <td> </td> <td align="right"><b>832,189</b></td> <td> </td> <td> </td> <td> </td> <td align="right">794,795</td> <td> </td> <td> </td> <td> </td> <td align="right">771,039</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of options </div></td> <td> </td> <td> </td> <td align="right"><b>4,792</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,620</td> <td> </td> <td> </td> <td> </td> <td align="right">3,809</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Diluted shares </div></td> <td> </td> <td> </td> <td align="right"><b>836,981</b></td> <td> </td> <td> </td> <td> </td> <td align="right">796,415</td> <td> </td> <td> </td> <td> </td> <td align="right">774,848</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Stock options that were not included in the diluted earnings per share calculation because they were anti-dilutive were 13.1 million and 37.7 million at December 31, 2010 and 2009, respectively. Assuming an average stock price of $38.01 (the highest exercise price of the anti-dilutive options outstanding), the effect of options would have increased by 0.8 million and 3.4 million shares for the years ended December 31, 2010 and 2009, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Common Stock Dividend Restrictions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The income of Southern Company is derived primarily from equity in earnings of its subsidiaries. At December 31, 2010, consolidated retained earnings included $5.9 billion of undistributed retained earnings of the subsidiaries. Southern Power’s credit facility contains potential limitations on the payment of common stock dividends; as of December 31, 2010, Southern Power was in compliance with all such requirements. </div> </div>   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. NUCLEAR INSURANCE</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Under the Price-Anderson Amendments Act (Act), Alabama Power and Georgia Power maintain agreements of indemnity with the NRC that, together with private insurance, cover third-party liability arising from any nuclear incident occurring at the companies’ nuclear power plants. The Act provides funds up to $12.6 billion for public liability claims that could arise from a single nuclear incident. Each nuclear plant is insured against this liability to a maximum of $375 million by American Nuclear Insurers (ANI), with the remaining coverage provided by a mandatory program of deferred premiums that could be assessed, after a nuclear incident, against all owners of commercial nuclear reactors. A company could be assessed up to $117.5 million per incident for each licensed reactor it operates but not more than an aggregate of $17.5 million per incident to be paid in a calendar year for each reactor. Such maximum assessment, excluding any applicable state premium taxes, for Alabama Power and Georgia Power, based on its ownership and buyback interests, is $235 million and $237 million, respectively, per incident, but not more than an aggregate of $35 million per company to be paid for each incident in any one year. Both the maximum assessment per reactor and the maximum yearly assessment are adjusted for inflation at least every five years. The next scheduled adjustment is due no later than October 29, 2013. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power and Georgia Power are members of Nuclear Electric Insurance Limited (NEIL), a mutual insurer established to provide property damage insurance in an amount up to $500 million for members’ operating nuclear generating facilities. Additionally, both companies have policies that currently provide decontamination, excess property insurance, and premature decommissioning coverage up to $2.25 billion for losses in excess of the $500 million primary coverage. This excess insurance is also provided by NEIL. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">NEIL also covers the additional costs that would be incurred in obtaining replacement power during a prolonged accidental outage at a member’s nuclear plant. Members can purchase this coverage, subject to a deductible waiting period of up to 26 weeks, with a maximum per occurrence per unit limit of $490 million. After the deductible period, weekly indemnity payments would be received until either the unit is operational or until the limit is exhausted in approximately three years. Alabama Power and Georgia Power each purchase the maximum limit allowed by NEIL, subject to ownership limitations. Each facility has elected a 12-week deductible waiting period. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A builders’ risk property insurance policy has been purchased from NEIL for the construction of Plant Vogtle Units 3 and 4. This policy provides the Owners up to $2.75 billion in limits for accidental property damage occurring during construction. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Under each of the NEIL policies, members are subject to assessments if losses each year exceed the accumulated funds available to the insurer under that policy. The current maximum annual assessments for Alabama Power and Georgia Power under the NEIL policies would be $42 million and $70 million, respectively. </div>   </div>  <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">Claims resulting from terrorist acts are covered under both the ANI and NEIL policies (subject to normal policy limits). The aggregate, however, that NEIL will pay for all claims resulting from terrorist acts in any 12-month period is $3.2 billion plus such additional amounts NEIL can recover through reinsurance, indemnity, or other sources. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For all on-site property damage insurance policies for commercial nuclear power plants, the NRC requires that the proceeds of such policies shall be dedicated first for the sole purpose of placing the reactor in a safe and stable condition after an accident. Any remaining proceeds are to be applied next toward the costs of decontamination and debris removal operations ordered by the NRC, and any further remaining proceeds are to be paid either to the Company or to its debt trustees as may be appropriate under the policies and applicable trust indentures. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">All retrospective assessments, whether generated for liability, property, or replacement power, may be subject to applicable state premium taxes. In the event of a loss, the amount of insurance available may not be adequate to cover property damage and other incurred expenses. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. FAIR VALUE MEASUREMENTS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value measurements are based on inputs of observable and unobservable market data that a market participant would use in pricing the asset or liability. The use of observable inputs is maximized where available and the use of unobservable inputs is minimized for fair value measurement and reflects a three-tier fair value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement. </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>Level 1 consists of observable market data in an active market for identical assets or liabilities.</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>Level 2 consists of observable market data, other than that included in Level 1, that is either directly or indirectly observable.</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>Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company of what a market participant would use in pricing an asset or liability. If there is little available market data, then the Company’s own assumptions are the best available information.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the case of multiple inputs being used in a fair value measurement, the lowest level input that is significant to the fair value measurement represents the level in the fair value hierarchy in which the fair value measurement is reported. </div>   </div>  <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">As of December 31, 2010, assets and liabilities measured at fair value on a recurring basis during the period, together with the level of the fair value hierarchy in which they fall, were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></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>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency derivatives </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Nuclear decommissioning trusts:<sup style="font-size: 85%; vertical-align: text-top">(a)</sup> </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Domestic equity </div></td> <td> </td> <td> </td> <td align="right">604</td> <td> </td> <td> </td> <td> </td> <td align="right">60</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">664</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury and government agency securities </div></td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td> </td> <td align="right">220</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">240</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Municipal bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">53</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">53</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">220</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">220</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage and asset backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">119</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">119</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cash equivalents and restricted cash </div></td> <td> </td> <td> </td> <td align="right">351</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">351</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td> </td> <td align="right">51</td> <td> </td> <td> </td> <td> </td> <td align="right">19</td> <td> </td> <td> </td> <td> </td> <td align="right">79</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">984</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">820</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,823</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="top"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">206</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">206</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">207</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">207</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </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">(a)</td> <td> </td> <td>Includes the investment securities pledged to creditors and collateral received, and excludes receivables related to investment income, pending investment sales, and payables related to pending investment purchases and the lending pool. See Note 1 under “Nuclear Decommissioning” for additional information.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Valuation Methodologies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The energy-related derivatives primarily consist of over-the-counter financial products for natural gas and physical power products including, from time to time, basis swaps. These are standard products used within the energy industry and are valued using the market approach. The inputs used are mainly from observable market sources, such as forward natural gas prices, power prices, implied volatility, and LIBOR interest rates. Interest rate and foreign currency derivatives are also standard over-the-counter financial products valued using the market approach. Inputs for interest rate derivatives include LIBOR interest rates, interest rate futures contracts, and occasionally implied volatility of interest rate options. Inputs for foreign currency derivatives are from observable market sources. See Note 11 for additional information on how these derivatives are used. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">“Other investments” include investments in funds that are valued using the market approach and income approach. Securities that are traded in the open market are valued at the closing price on their principal exchange as of the measurement date. Discounts are applied in accordance with GAAP when certain trading restrictions exist. For investments that are not traded in the open market, the price paid will have been determined based on market factors including comparable multiples and the expectations regarding cash flows and business plan execution. As the investments mature or if market conditions change materially, further analysis of the fair market value of the investment is performed. This analysis is typically based on a metric, such as multiple of earnings, revenues, earnings before interest and income taxes, or earnings adjusted for certain cash changes. These multiples are based on comparable multiples for publicly traded companies or other relevant prior transactions. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For fair value measurements of investments within the nuclear decommissioning trusts and rabbi trust funds, specifically the fixed income assets using significant other observable inputs and unobservable inputs, the primary valuation technique used is the market approach. External pricing vendors are designated for each of the asset classes in the nuclear decommissioning trusts and rabbi trust funds with each security discriminately assigned a primary pricing source, based on similar characteristics. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A market price secured from the primary source vendor is then used in the valuation of the assets within the trusts. As a general approach, market pricing vendors gather market data (including indices and market research reports) and integrate relative credit information, observed market movements, and sector news into proprietary pricing models, pricing systems, and mathematical tools. Dealer quotes and other market information including live trading levels and pricing analysts’ judgment are also obtained when available. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, the fair value measurements of investments calculated at net asset value per share (or its equivalent), as well as the nature and risks of those investments, were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="45%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="3%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fair</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Unfunded</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Redemption</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Redemption</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Commitments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Frequency</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Notice Period</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <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> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nuclear decommissioning trusts: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds – commingled funds </div></td> <td> </td> <td align="right">$</td> <td align="right">65</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">1 to 3 days</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other – commingled funds </div></td> <td> </td> <td> </td> <td align="right">67</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">Not applicable</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trust-owned life insurance </div></td> <td> </td> <td> </td> <td align="right">86</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">15 days</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash equivalents and restricted cash: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market funds </div></td> <td> </td> <td> </td> <td align="right">351</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom" nowrap="nowrap">Not applicable</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market funds </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">Not applicable</td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The commingled funds in the nuclear decommissioning trusts are invested primarily in a diversified portfolio of high grade money market instruments, including, but not limited to, commercial paper, notes, repurchase agreements, and other evidences of indebtedness with a maturity not exceeding 13 months from the date of purchase. The commingled funds will, however, maintain a dollar-weighted average portfolio maturity of 90 days or less. The assets may be longer term investment grade fixed income obligations having a maximum five-year final maturity with put features or floating rates with a reset rate date of 13 months or less. The primary objective for the commingled funds is a high level of current income consistent with stability of principal and liquidity. The corporate bonds — commingled funds represent the investment of cash collateral received under the Funds’ managers’ securities lending program that can only be sold upon the return of the loaned securities. See Note 1 under “Nuclear Decommissioning” for additional information. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power’s nuclear decommissioning trust includes investments in Trust-Owned Life Insurance (TOLI). The taxable nuclear decommissioning trust invests in the TOLI in order to minimize the impact of taxes on the portfolio and can draw on the value of the TOLI through death proceeds, loans against the cash surrender value, and/or the cash surrender value, subject to legal restrictions. The amounts reported in the table above reflect the fair value of investments the insurer has made in relation to the TOLI agreements. The nuclear decommissioning trust does not own the underlying investments, but the fair value of the investments approximates the cash surrender value of the TOLI policies. The investments made by the insurer are in commingled funds. The commingled funds primarily include investments in domestic and international equity securities and predominantly high-quality fixed income securities. These fixed income securities include U.S. Treasury and government agency fixed income securities, non-U.S. government and agency fixed income securities, domestic and foreign corporate fixed income securities, and, to some degree, mortgage and asset backed securities. The passively managed funds seek to replicate the performance of a related index. The actively managed funds seek to exceed the performance of a related index through security analysis and selection. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The money market funds are short-term investments of excess funds in various money market mutual funds, which are portfolios of short-term debt securities. The money market funds are regulated by the Securities and Exchange Commission and typically receive the highest rating from credit rating agencies. Regulatory and rating agency requirements for money market funds include minimum credit ratings and maximum maturities for individual securities and a maximum weighted average portfolio maturity. Redemptions are available on a same day basis up to the full amount of the Company’s investment in the money market funds. </div>   </div>  <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">Changes in the fair value measurement of the Level 3 items using significant unobservable inputs for the year ended December 31, 2010 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level 3</b></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="3" style="border-bottom: 1px solid #000000"><b>Other</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance at December 31, 2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">35</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total gains (losses) — realized/unrealized: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Included in earnings </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Included in OCI </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Transfers out of Level 3 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(20</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Ending balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>19</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Transfers in and out of the levels of fair value hierarchy are recognized as of the end of the reporting period. The value of one of the investments was reclassified from Level 3 to Level 1 because the securities began trading on the public market. The reclassification is reflected in the table above as a transfer out of Level 3 at its fair value. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010 and 2009, other financial instruments for which the carrying amount did not equal fair value were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Carrying Amount</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term debt: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:75px; text-indent:-15px"><b>2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>19,356</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>20,073</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:75px; text-indent:-15px">2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">19,145</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19,567</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values were based on either closing market prices (Level 1) or closing prices of comparable instruments (Level 2). </div> </div>

<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>   </div>  <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%">  <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>   <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>  </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>   </div>  <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%">  <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>   <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>  </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%">  <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>   <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>  </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>  <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%">  <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>   <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">$</td> <td align="right">177</td> <td nowrap="nowrap"> </td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as hedging instruments in cash flow and fair value hedges</b> </div></td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td align="left"> <div style="margin-left:15px; text-indent:-15px">Other current assets </div></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</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">$</td> <td align="right">11</td> <td nowrap="nowrap"> </td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as hedging instruments</b> </div></td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td align="left"> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td align="left"> <div style="margin-left:15px; text-indent:-15px">Other current assets </div></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</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>  </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>   </div>  <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%">  <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>   <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>  </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%">  <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>   <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>  </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%">  <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>   <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>  </table> </div>   </div>  <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>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>12. SEGMENT AND RELATED INFORMATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s reportable business segments are the sale of electricity in the Southeast by the four traditional operating companies and Southern Power. Southern Power’s revenues from sales to the traditional operating companies were $371 million, $544 million, and $638 million in 2010, 2009, and 2008, respectively. The “All Other” column includes parent Southern Company, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include investments in telecommunications, renewable energy projects, and leveraged lease projects. All other intersegment revenues are not material. Financial data for business segments and products and services was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="23%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Electric Utilities</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Traditional</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Operating</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></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"><b>All</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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Companies</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Power</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Other</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>2010</b> </div></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> <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> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Operating revenues</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>16,713</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,129</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(468</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>17,374</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>162</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(80</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>17,456</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td nowrap="nowrap"> <div style="margin-left:15px; text-indent:-15px"><b>Depreciation and amortization</b> </div></td> <td> </td> <td> </td> <td align="right"><b>1,375</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>119</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,494</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>19</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,513</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Interest income</b> </div></td> <td> </td> <td> </td> <td align="right"><b>22</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>22</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </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> </td> <td align="right"><b>24</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Interest expense</b> </div></td> <td> </td> <td> </td> <td align="right"><b>757</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>76</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>833</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>62</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>895</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Income taxes</b> </div></td> <td> </td> <td> </td> <td align="right"><b>1,039</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>77</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,116</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(90</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,026</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Segment net income (loss)*</b> </div></td> <td> </td> <td> </td> <td align="right"><b>1,859</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>130</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,989</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(10</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(4</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>1,975</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Total assets</b> </div></td> <td> </td> <td> </td> <td align="right"><b>51,145</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3,276</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(128</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>54,293</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,279</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(540</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right"><b>55,032</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Gross property additions</b> </div></td> <td> </td> <td> </td> <td align="right"><b>4,029</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>300</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4,329</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>114</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4,443</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="29" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></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> <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> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2009 </div></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> <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> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="right">$</td> <td align="right">15,304</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">947</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(609</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">15,642</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">165</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(64</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">15,743</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">1,378</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,476</td> <td> </td> <td> </td> <td> </td> <td align="right">27</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,503</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest income </div></td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense </div></td> <td> </td> <td> </td> <td align="right">749</td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">834</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">905</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income taxes </div></td> <td> </td> <td> </td> <td align="right">902</td> <td> </td> <td> </td> <td> </td> <td align="right">86</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">988</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(92</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">896</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Segment net income (loss)* </div></td> <td> </td> <td> </td> <td align="right">1,679</td> <td> </td> <td> </td> <td> </td> <td align="right">156</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,835</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(193</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">1,643</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total assets </div></td> <td> </td> <td> </td> <td align="right">48,403</td> <td> </td> <td> </td> <td> </td> <td align="right">3,043</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(143</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">51,303</td> <td> </td> <td> </td> <td> </td> <td align="right">1,223</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(480</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">52,046</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Gross property additions </div></td> <td> </td> <td> </td> <td align="right">4,568</td> <td> </td> <td> </td> <td> </td> <td align="right">331</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,899</td> <td> </td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,913</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="29" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></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> <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> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2008 </div></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> <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> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="right">$</td> <td align="right">16,521</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,314</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(835</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">17,000</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">182</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(55</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">17,127</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">1,325</td> <td> </td> <td> </td> <td> </td> <td align="right">89</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,414</td> <td> </td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,443</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest income </div></td> <td> </td> <td> </td> <td align="right">32</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense </div></td> <td> </td> <td> </td> <td align="right">689</td> <td> </td> <td> </td> <td> </td> <td align="right">83</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">772</td> <td> </td> <td> </td> <td> </td> <td align="right">94</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">866</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income taxes </div></td> <td> </td> <td> </td> <td align="right">944</td> <td> </td> <td> </td> <td> </td> <td align="right">93</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,037</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(122</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">915</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Segment net income (loss)* </div></td> <td> </td> <td> </td> <td align="right">1,703</td> <td> </td> <td> </td> <td> </td> <td align="right">144</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,847</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(104</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> </td> <td align="right">1,742</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total assets </div></td> <td> </td> <td> </td> <td align="right">44,794</td> <td> </td> <td> </td> <td> </td> <td align="right">2,813</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(139</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">47,468</td> <td> </td> <td> </td> <td> </td> <td align="right">1,407</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(528</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">48,347</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross property additions </div></td> <td> </td> <td> </td> <td align="right">4,058</td> <td> </td> <td> </td> <td> </td> <td align="right">50</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,108</td> <td> </td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,122</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="29" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </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>After dividends on preferred and preference stock of subsidiaries</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Products and Services</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <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> <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="17" style="border-bottom: 1px solid #000000"><b>Electric Utilities’ Revenues</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Year</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Retail</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Wholesale</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Other</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>14,791</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,994</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>589</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>17,374</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2009 </div></td> <td> </td> <td> </td> <td align="right">13,307</td> <td> </td> <td> </td> <td> </td> <td align="right">1,802</td> <td> </td> <td> </td> <td> </td> <td align="right">533</td> <td> </td> <td> </td> <td> </td> <td align="right">15,642</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2008 </div></td> <td> </td> <td> </td> <td align="right">14,055</td> <td> </td> <td> </td> <td> </td> <td align="right">2,400</td> <td> </td> <td> </td> <td> </td> <td align="right">545</td> <td> </td> <td> </td> <td> </td> <td align="right">17,000</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>13. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Summarized quarterly financial data for 2010 and 2009 are as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="23%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </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 nowrap="nowrap" align="center" colspan="3"><b>Consolidated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"> </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 nowrap="nowrap" align="center" colspan="3"><b>Net Income After</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"> </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 nowrap="nowrap" align="center" colspan="3"><b>Dividends on</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Per Common Share</b></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 nowrap="nowrap" align="center" colspan="3"><b>Preferred and</b></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="7"><b>Trading</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Operating</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Operating</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Preference Stock</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Basic</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Price Range</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Quarter Ended</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Revenues</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Income</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>of Subsidiaries</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Earnings</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Dividends</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>High</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Low</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>March 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>4,157</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>922</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>495</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>0.60</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>0.4375</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>33.73</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>30.85</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>June 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>4,208</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>951</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>510</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.62</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.4550</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>35.45</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>32.04</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>September 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>5,320</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,459</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>817</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.98</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.4550</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>37.73</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>33.00</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>December 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>3,771</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>470</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>153</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.18</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>0.4550</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>38.62</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>37.10</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></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> <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> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">March 2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">3,666</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">490</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">126</td> <td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">*</sup></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">0.16</td> <td nowrap="nowrap"><sup style="font-size: 85%; vertical-align: text-top">*</sup></td> <td> </td> <td align="right">$</td> <td align="right">0.4200</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">37.62</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26.48</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">June 2009 </div></td> <td> </td> <td> </td> <td align="right">3,885</td> <td> </td> <td> </td> <td> </td> <td align="right">886</td> <td> </td> <td> </td> <td> </td> <td align="right">478</td> <td> </td> <td> </td> <td> </td> <td align="right">0.61</td> <td> </td> <td> </td> <td> </td> <td align="right">0.4375</td> <td> </td> <td> </td> <td> </td> <td align="right">32.05</td> <td> </td> <td> </td> <td> </td> <td align="right">27.19</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">September 2009 </div></td> <td> </td> <td> </td> <td align="right">4,682</td> <td> </td> <td> </td> <td> </td> <td align="right">1,415</td> <td> </td> <td> </td> <td> </td> <td align="right">790</td> <td> </td> <td> </td> <td> </td> <td align="right">0.99</td> <td> </td> <td> </td> <td> </td> <td align="right">0.4375</td> <td> </td> <td> </td> <td> </td> <td align="right">32.67</td> <td> </td> <td> </td> <td> </td> <td align="right">30.27</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">December 2009 </div></td> <td> </td> <td> </td> <td align="right">3,510</td> <td> </td> <td> </td> <td> </td> <td align="right">477</td> <td> </td> <td> </td> <td> </td> <td align="right">249</td> <td> </td> <td> </td> <td> </td> <td align="right">0.31</td> <td> </td> <td> </td> <td> </td> <td align="right">0.4375</td> <td> </td> <td> </td> <td> </td> <td align="right">34.47</td> <td> </td> <td> </td> <td> </td> <td align="right">30.89</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="29" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s business is influenced by seasonal weather conditions. </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="1%" nowrap="nowrap" align="left">*</td> <td width="1%"> </td> <td>Southern Company’s MC Asset Recovery litigation settlement reduced earnings by $202 million, or 25 cents per share, during the first quarter 2009.</td> </tr> </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Regulatory Assets and Liabilities</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The traditional operating companies are subject to the provisions of the Financial Accounting Standards Board in accounting for the effects of rate regulation. Regulatory assets represent probable future revenues associated with certain costs that are expected to be recovered from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are expected to be credited to customers through the ratemaking process. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </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="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">Note</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="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax charges </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,204</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,048</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax charges — Medicare subsidy </div></td> <td> </td> <td> </td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(k</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Asset retirement obligations-asset </div></td> <td> </td> <td> </td> <td align="right"><b>79</b></td> <td> </td> <td> </td> <td> </td> <td align="right">125</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Asset retirement obligations-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(82</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(47</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other cost of removal obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(1,188</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,307</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred income tax credits </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(237</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(249</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(a</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Loss on reacquired debt </div></td> <td> </td> <td> </td> <td align="right"><b>274</b></td> <td> </td> <td> </td> <td> </td> <td align="right">255</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(b</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Vacation pay </div></td> <td> </td> <td> </td> <td align="right"><b>151</b></td> <td> </td> <td> </td> <td> </td> <td align="right">145</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(c,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Under recovered regulatory clause revenues </div></td> <td> </td> <td> </td> <td align="right"><b>27</b></td> <td> </td> <td> </td> <td> </td> <td align="right">40</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Over recovered regulatory clause revenues </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(40</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Building leases </div></td> <td> </td> <td> </td> <td align="right"><b>45</b></td> <td> </td> <td> </td> <td> </td> <td align="right">47</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(f</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Generating plant outage costs </div></td> <td> </td> <td> </td> <td align="right"><b>31</b></td> <td> </td> <td> </td> <td> </td> <td align="right">39</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Under recovered storm damage costs </div></td> <td> </td> <td> </td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Property damage reserves </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(216</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(157</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fuel hedging-asset </div></td> <td> </td> <td> </td> <td align="right"><b>211</b></td> <td> </td> <td> </td> <td> </td> <td align="right">187</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Fuel hedging-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(7</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other assets </div></td> <td> </td> <td> </td> <td align="right"><b>171</b></td> <td> </td> <td> </td> <td> </td> <td align="right">156</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(d</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental remediation-asset </div></td> <td> </td> <td> </td> <td align="right"><b>67</b></td> <td> </td> <td> </td> <td> </td> <td align="right">68</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h,i</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental remediation-liability </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(10</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(h</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Environmental compliance cost recovery </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(96</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(g</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other liabilities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(13</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(51</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(j</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Retiree benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>2,041</b></td> <td> </td> <td> </td> <td> </td> <td align="right">2,268</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(e,i</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Total assets (liabilities), net </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>2,598</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,260</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows: </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="1%" nowrap="nowrap" align="left">(a)</td> <td width="1%"> </td> <td>Asset retirement and removal assets and liabilities are recorded, deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 65 years. Asset retirement and other cost of removal liabilities will be settled and trued up following completion of the related activities. Other cost of removal obligations include $92 million at Georgia Power that will be amortized over a three-year period beginning January 1, 2011 in accordance with a Georgia PSC order. See Note 3 under “Retail Regulatory Matters — Georgia Power — Retail Rate Plans” for additional information.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(b)</td> <td width="1%"> </td> <td>Recovered over either the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(c)</td> <td width="1%"> </td> <td>Recorded as earned by employees and recovered as paid, generally within one year.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(d)</td> <td width="1%"> </td> <td>Recorded and recovered or amortized as approved by the appropriate state PSCs over periods not exceeding 10 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(e)</td> <td width="1%"> </td> <td>Recovered and amortized over the average remaining service period which may range up to 15 years. See Note 2 for additional information.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(f)</td> <td width="1%"> </td> <td>Recovered over the remaining lives of the buildings through 2026.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(g)</td> <td width="1%"> </td> <td>Deferred revenue associated with the levelization of Georgia Power’s environmental compliance cost recovery (ECCR) tariff revenue for the years 2008 through 2010 in accordance with a Georgia PSC order.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(h)</td> <td width="1%"> </td> <td>Recovered as storm restoration or environmental remediation expenses are incurred.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(i)</td> <td width="1%"> </td> <td>Not earning a return as offset in rate base by a corresponding asset or liability.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(j)</td> <td width="1%"> </td> <td>Recorded and recovered or amortized as approved by the appropriate state PSC over periods up to the life of the plant or the remaining life of the original issue or, if refinanced, over the life of the new issue which may range up to 50 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="1%" nowrap="nowrap" align="left">(k)</td> <td width="1%"> </td> <td>Recovered and amortized as approved by the appropriate state PSCs over periods not exceeding 14 years. See Note 5 under “Current and Deferred Income Taxes” for additional information.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In the event that a portion of a traditional operating company’s operations is no longer subject to applicable accounting rules for rate regulation, such company would be required to write off or reclassify to accumulated other comprehensive income (OCI) related regulatory assets and liabilities that are not specifically recoverable through regulated rates. In addition, the traditional operating company would be required to determine if any impairment to other assets, including plant, exists and write down the assets, if impaired, to their fair values. All regulatory assets and liabilities are to be reflected in rates. See Note 3 under “Retail Regulatory Matters — Alabama Power,” “Retail Regulatory Matters — Georgia Power,” and “Retail Regulatory Matters — Mississippi Power Integrated Coal Gasification Combined Cycle” for additional information. </div> </div>

<div align="left" style="font-size: 8pt; font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Nuclear Decommissioning</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Nuclear Regulatory Commission (NRC) requires licensees of commercial nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. Alabama Power and Georgia Power have external trust funds (the Funds) to comply with the NRC’s regulations. Use of the Funds is restricted to nuclear decommissioning activities and the Funds are managed and invested in accordance with applicable requirements of various regulatory bodies, including the NRC, the FERC, and state PSCs, as well as the Internal Revenue Service (IRS). The Funds are required to be held by one or more trustees with an individual net worth of at least $100 million. The FERC requires the Funds’ managers to exercise the standard of care in investing that a “prudent investor” would use in the same circumstances. The FERC regulations also require, except for investments tied to market indices or other mutual funds, that the Funds’ managers may not invest in any securities of the utility for which it manages funds or its affiliates. In addition, the NRC prohibits investments in securities of power reactor licensees. While Southern Company is allowed to prescribe an overall investment policy to the Funds’ managers, neither Southern Company nor its subsidiaries or affiliates are allowed to engage in the day-to-day management of the Funds or to mandate individual investment decisions. Day-to-day management of the investments in the Funds is delegated to unrelated third party managers with oversight by Southern Company, Alabama Power, and Georgia Power management. The Funds’ managers are authorized, within broad limits, to actively buy and sell securities at their own discretion in order to maximize the return on the Funds’ investments. The Funds are invested in a tax-efficient manner in a diversified mix of equity and fixed income securities and are reported as trading securities. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company records the investment securities held in the Funds at fair value, as disclosed in Note 10. Gains and losses, whether realized or unrealized, are recorded in the regulatory liability for asset retirement obligations in the balance sheets and are not included in net income or OCI. Fair value adjustments and realized gains and losses are determined on a specific identification basis. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Funds at Georgia Power participate in a securities lending program through the managers of the Funds. Under this program, the Funds’ investment securities are loaned to investment brokers for a fee. Securities so loaned are fully collateralized by cash, letters of credit, and securities issued or guaranteed by the U.S. government, its agencies, and the instrumentalities. As of December 31, 2010 and 2009, approximately $141 million and $14 million, respectively, of the fair market value of the Funds’ securities were on loan and pledged to creditors under the Funds’ managers’ securities lending program. The fair value of the collateral received was approximately $144 million and $14 million at December 31, 2010 and 2009, respectively, and can only be sold upon the return of the loaned securities. The collateral received is treated as a non-cash item in the statements of cash flows. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, investment securities in the Funds totaled $1.4 billion consisting of equity securities of $664 million, debt securities of $632 million, and $74 million of other securities. At December 31, 2009, investment securities in the Funds totaled $1.1 billion consisting of equity securities of $774 million, debt securities of $272 million, and $22 million of other securities. These amounts include the investment securities pledged to creditors and collateral received, and exclude receivables related to investment income and pending investment sales, and payables related to pending investment purchases and the lending pool. </div>    <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">Sales of the securities held in the Funds resulted in cash proceeds of $2.0 billion, $1.2 billion, and $712 million in 2010, 2009, and 2008, respectively, all of which were reinvested. For 2010, fair value increases, including reinvested interest and dividends and excluding the Funds’ expenses, were $139 million, of which $6 million related to securities held in the Funds at December 31, 2010. For 2009, fair value increases, including reinvested interest and dividends and excluding the Funds’ expenses, were $215 million, of which $198 million related to securities held in the Funds at December 31, 2009. For 2008, fair value reductions, including reinvested interest and dividends and excluding the Funds’ expenses, were $(278) million. While the investment securities held in the Funds are reported as trading securities, the Funds continue to be managed with a long-term focus. Accordingly, all purchases and sales within the Funds are presented separately in the statements of cash flows as investing cash flows, consistent with the nature of and purpose for which the securities were acquired. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Amounts previously recorded in internal reserves are being transferred into the external trust funds over periods approved by the Alabama PSC. The NRC’s minimum external funding requirements are based on a generic estimate of the cost to decommission only the radioactive portions of a nuclear unit based on the size and type of reactor. Alabama Power and Georgia Power have filed plans with the NRC designed to ensure that, over time, the deposits and earnings of the Funds will provide the minimum funding amounts prescribed by the NRC. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At December 31, 2010, the accumulated provisions for decommissioning were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">External trust funds </div></td> <td> </td> <td align="left">$</td> <td align="right">553</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Internal reserves </div></td> <td> </td> <td> </td> <td align="right">24</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="13" 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">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">577</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Site study cost is the estimate to decommission a specific facility as of the site study year. The estimated costs of decommissioning based on the most current studies, which were performed in 2008 for Alabama Power’s Plant Farley and in 2009 for the Georgia Power plants, were as follows for Alabama Power’s Plant Farley and Georgia Power’s ownership interests in Plants Hatch and Vogtle: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</b></td> <td style="border-bottom: 1px solid #000000"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Decommissioning periods: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Beginning year </div></td> <td> </td> <td> </td> <td align="right">2037</td> <td> </td> <td> </td> <td> </td> <td align="right">2034</td> <td> </td> <td> </td> <td> </td> <td align="right">2047</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Completion year </div></td> <td> </td> <td> </td> <td align="right">2065</td> <td> </td> <td> </td> <td> </td> <td align="right">2063</td> <td> </td> <td> </td> <td> </td> <td align="right">2067</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td colspan="11" align="center"><i style="font-size: 8pt">(in millions)</i><br /></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Site study costs: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Radiated structures </div></td> <td> </td> <td align="left">$</td> <td align="right">1,060</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">583</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">500</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Non-radiated structures </div></td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> <td> </td> <td> </td> <td align="right">46</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">1,132</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">629</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">571</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The decommissioning periods and site study costs for Plant Vogtle reflect the extended operating license approved by the NRC in June 2009. The decommissioning cost estimates are based on prompt dismantlement and removal of the plant from service. The actual decommissioning costs may vary from the above estimates because of changes in the assumed date of decommissioning, changes in NRC requirements, or changes in the assumptions used in making these estimates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For ratemaking purposes, Alabama Power’s decommissioning costs are based on the site study, and Georgia Power’s decommissioning costs are based on the NRC generic estimate to decommission the radioactive portion of the facilities as of 2006. The estimates used in current rates are $575 million and $420 million for Plant Hatch and Plant Vogtle Units 1 and 2, respectively. Amounts expensed were $3 million annually for Plant Vogtle Units 1 and 2 for 2008 through 2010. Effective for the years 2011 through 2013, the annual decommissioning cost for ratemaking is $2 million for Plant Hatch. Georgia Power projects the external trust funds for Plant Vogtle Units 1 and 2 would be adequate to meet the decommissioning obligations of the NRC with no further contributions. Significant assumptions used to determine these costs for ratemaking were an inflation rate of 4.5% and 2.4% for Alabama Power and Georgia Power, respectively, and a trust earnings rate of 7.0% and 4.4% for Alabama Power and Georgia Power, respectively. As a result of license extensions, amounts previously contributed to the external trust funds for Plant Farley are currently projected to be adequate to meet the decommissioning obligations. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Allowance for Funds Used During Construction (AFUDC) and Interest Capitalized</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with regulatory treatment, the traditional operating companies record AFUDC, which represents the estimated debt and equity costs of capital funds that are necessary to finance the construction of new regulated facilities. While cash is not realized currently from such allowance, it increases the revenue requirement over the service life of the plant through a higher rate base and higher depreciation. The equity component of AFUDC is not included in calculating taxable income. Interest related to the construction of new facilities not included in the traditional operating companies’ regulated rates is capitalized in accordance with standard interest capitalization requirements. AFUDC and interest capitalized, net of income taxes were 12.5%, 15.3%, and 11.2% of net income for 2010, 2009, and 2008, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Cash payments for interest totaled $789 million, $788 million, and $787 million in 2010, 2009, and 2008, respectively, net of amounts capitalized of $86 million, $84 million, and $71 million, respectively. </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Leveraged Leases</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company has several leveraged lease agreements, with terms ranging up to 45 years, which relate to international and domestic energy generation, distribution, and transportation assets. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt related to these investments. The Company reviews all important lease assumptions at least annually, or more frequently if events or changes in circumstances indicate that a change in assumptions has occurred or may occur. These assumptions include the effective tax rate, the residual value, the credit quality of the lessees, and the timing of expected tax cash flows. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s net investment in domestic leveraged leases consists of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>475</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">487</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(207</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>268</b></td> <td> </td> <td> </td> <td> </td> <td align="right">269</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(223</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(211</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>45</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>    <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">A summary of the components of income from domestic leveraged leases was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s net investment in international leveraged leases consists of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>733</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">734</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(377</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(393</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>356</b></td> <td> </td> <td> </td> <td> </td> <td align="right">341</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current taxes payable </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(40</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>316</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">301</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of income from international leveraged leases was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>14</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">19</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(99</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax benefit (expense) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>9</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(64</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company terminated two international leveraged lease investments during 2009. The proceeds were used to extinguish all debt related to leveraged lease investments, a portion of which had make-whole redemption provisions. This resulted in a $17 million loss which partially offset a $26 million gain on the terminations. </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">External trust funds </div></td> <td> </td> <td align="left">$</td> <td align="right">553</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Internal reserves </div></td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">577</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">360</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">206</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Farley</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Hatch</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>Plant Vogtle</b></td> <td style="border-bottom: 1px solid #000000"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Decommissioning periods: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Beginning year </div></td> <td> </td> <td> </td> <td align="right">2037</td> <td> </td> <td> </td> <td> </td> <td align="right">2034</td> <td> </td> <td> </td> <td> </td> <td align="right">2047</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Completion year </div></td> <td> </td> <td> </td> <td align="right">2065</td> <td> </td> <td> </td> <td> </td> <td align="right">2063</td> <td> </td> <td> </td> <td> </td> <td align="right">2067</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td colspan="11" align="center"><i style="font-size: 8pt">(in millions)</i><br /></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Site study costs: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Radiated structures </div></td> <td> </td> <td align="left">$</td> <td align="right">1,060</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">583</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">500</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Non-radiated structures </div></td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> <td> </td> <td> </td> <td align="right">46</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">1,132</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">629</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">571</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>475</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">487</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(207</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>268</b></td> <td> </td> <td> </td> <td> </td> <td align="right">269</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(223</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(211</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>45</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net leveraged lease income </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Southern Company’s net investment in international leveraged leases consists of the following at December 31: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="6"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net rentals receivable </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>733</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">734</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unearned income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(377</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(393</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Investment in leveraged leases </div></td> <td> </td> <td> </td> <td align="right"><b>356</b></td> <td> </td> <td> </td> <td> </td> <td align="right">341</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current taxes payable </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred taxes from leveraged leases </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(40</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net investment in leveraged leases </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>316</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">301</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of income from international leveraged leases was as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</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="10"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pretax leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>14</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">19</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(99</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax benefit (expense) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net leveraged lease income (loss) </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>9</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(64</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="32%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="2%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </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 nowrap="nowrap" align="center" colspan="3"><b>Pension and Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated Other</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Qualifying</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Marketable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Postretirement</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></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="3" style="border-bottom: 1px solid #000000"><b>Hedges</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="3" style="border-bottom: 1px solid #000000"><b>Securities</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Plans</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Income (Loss)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2009 </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(49</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(49</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(88</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current period change </div></td> <td> </td> <td> </td> <td align="right">14</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(35</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>7</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(42</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(70</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 nowrap="nowrap" align="right" colspan="2"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2">2009</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right" colspan="2">2008</td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="13" 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">Discount rate: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Pension plans </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>5.52</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">5.93</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">6.75</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other postretirement benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>5.40</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.83</td> <td> </td> <td> </td> <td> </td> <td align="right">6.75</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Annual salary increase </div></td> <td> </td> <td> </td> <td align="right"><b>3.84</b></td> <td> </td> <td> </td> <td> </td> <td align="right">4.18</td> <td> </td> <td> </td> <td> </td> <td align="right">3.75</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term return on plan assets: </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Pension plans </div></td> <td> </td> <td> </td> <td align="right"><b>8.75</b></td> <td> </td> <td> </td> <td> </td> <td align="right">8.50</td> <td> </td> <td> </td> <td> </td> <td align="right">8.50</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other postretirement benefit plans </div></td> <td> </td> <td> </td> <td align="right"><b>7.40</b></td> <td> </td> <td> </td> <td> </td> <td align="right">7.51</td> <td> </td> <td> </td> <td> </td> <td align="right">7.59</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>1 Percent</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>1 Percent</b></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="3" style="border-bottom: 1px solid #000000"><b>Increase</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Decrease</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="8"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefit obligation </div></td> <td> </td> <td align="right">$</td> <td align="right">128</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">108</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Service and interest costs </div></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="8"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in benefit obligation</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Benefit obligation at beginning of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>6,758</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,879</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Service cost </div></td> <td> </td> <td> </td> <td align="right"><b>172</b></td> <td> </td> <td> </td> <td> </td> <td align="right">146</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>391</b></td> <td> </td> <td> </td> <td> </td> <td align="right">387</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(296</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(282</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Actuarial loss (gain) </div></td> <td> </td> <td> </td> <td align="right"><b>198</b></td> <td> </td> <td> </td> <td> </td> <td align="right">628</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Balance at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>7,223</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6,758</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in plan assets</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Fair value of plan assets at beginning of year </div></td> <td> </td> <td> </td> <td align="right"><b>5,627</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,093</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Actual return (loss) on plan assets </div></td> <td> </td> <td> </td> <td align="right"><b>859</b></td> <td> </td> <td> </td> <td> </td> <td align="right">792</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Employer contributions </div></td> <td> </td> <td> </td> <td align="right"><b>644</b></td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(296</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(282</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Fair value of plan assets at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>6,834</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5,627</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued liability </div></td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(389</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,131</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Prepaid pension costs </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>88</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other regulatory assets, deferred </div></td> <td> </td> <td> </td> <td align="right"><b>1,749</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,894</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other current liabilities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(28</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(25</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(449</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,106</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td> </td> <td align="right"><b>68</b></td> <td> </td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Prior Service Cost</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Net (Gain) Loss</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2010:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>8</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>60</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right"><b>159</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>1,590</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>167</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,650</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">64</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">188</td> <td> </td> <td> </td> <td> </td> <td align="right">1,706</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">198</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,770</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Estimated amortization in net periodic pension cost in 2011:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">32</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Regulatory</b></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="3" style="border-bottom: 1px solid #000000"><b>OCI</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Assets</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2008</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">54</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,579</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net loss </div></td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td align="right">355</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(34</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(41</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td> </td> <td align="right">315</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2009</b> </div></td> <td> </td> <td> </td> <td align="right">74</td> <td> </td> <td> </td> <td> </td> <td align="right">1,894</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(4</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(106</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></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"><b>(32</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></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"><b>(9</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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"><b>(41</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(6</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(145</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>68</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1,749</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2008</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="12"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>172</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">146</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">146</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>391</b></td> <td> </td> <td> </td> <td> </td> <td align="right">387</td> <td> </td> <td> </td> <td> </td> <td align="right">348</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(552</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(541</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(525</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Recognized net loss </div></td> <td> </td> <td> </td> <td align="right"><b>10</b></td> <td> </td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net amortization </div></td> <td> </td> <td> </td> <td align="right"><b>33</b></td> <td> </td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> <td> </td> <td> </td> <td align="right">37</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net periodic pension cost </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>54</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">34</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Payments</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2011 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top">$</td> <td align="right" valign="top">335</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2012 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">353</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2013 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">372</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2014 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">392</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2015 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">413</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">2016 to 2020 </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2,368</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" valign="top" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="right" colspan="2" style="border-bottom: 1px solid #000000">2009</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="7"><i style="font-size: 8pt">(in millions)</i></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in benefit obligation</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefit obligation at beginning of year </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>1,759</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,733</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td> </td> <td align="right"><b>25</b></td> <td> </td> <td> </td> <td> </td> <td align="right">26</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>100</b></td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(95</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(93</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actuarial loss (gain) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(41</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">34</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Plan amendments </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Retiree drug subsidy </div></td> <td> </td> <td> </td> <td align="right"><b>6</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Balance at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>1,752</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,759</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Change in plan assets</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fair value of plan assets at beginning of year </div></td> <td> </td> <td> </td> <td align="right"><b>743</b></td> <td> </td> <td> </td> <td> </td> <td align="right">631</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return (loss) on plan assets </div></td> <td> </td> <td> </td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td> </td> <td align="right">127</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Employer contributions </div></td> <td> </td> <td> </td> <td align="right"><b>66</b></td> <td> </td> <td> </td> <td> </td> <td align="right">72</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Benefits paid </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right"><b>(89</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(87</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Fair value of plan assets at end of year </div></td> <td> </td> <td> </td> <td align="right"><b>802</b></td> <td> </td> <td> </td> <td> </td> <td align="right">743</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Accrued liability </div></td> <td> </td> <td nowrap="nowrap" align="left"><b>$</b></td> <td align="right"><b>(950</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,016</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other regulatory assets, deferred </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>292</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">374</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other current liabilities </div></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> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Employee benefit obligations </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(949</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1,016</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Prior Service</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net (Gain)</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Transition</b></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="3" style="border-bottom: 1px solid #000000"><b>Cost</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Loss</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Obligation</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="13"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2010:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right"><b>34</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>233</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>25</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>34</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>236</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>25</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td> </td> <td align="right">298</td> <td> </td> <td> </td> <td> </td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">41</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">303</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">35</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Estimated amortization as net periodic postretirement benefit cost in 2011:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated OCI </div></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Regulatory assets </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Regulatory</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>OCI</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Assets</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2008</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">489</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(33</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs/transition obligation </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(56</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of transition obligation </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(8</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total reclassification adjustments </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(26</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(115</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b> </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">374</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net gain </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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">(<b>60</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Change in prior service costs/transition obligation </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of transition obligation </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(10</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of prior service costs </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Amortization of net gain </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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">Total reclassification adjustments </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(20</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </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"><b>(82</b></td> <td nowrap="nowrap"><b>)</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>292</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="20"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>25</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right"><b>100</b></td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> <td> </td> <td> </td> <td align="right">111</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(63</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(61</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net amortization </div></td> <td> </td> <td> </td> <td align="right"><b>20</b></td> <td> </td> <td> </td> <td> </td> <td align="right">25</td> <td> </td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Net postretirement cost </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>82</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">103</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">111</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Benefit Payments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Subsidy Receipts</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">108</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(8</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">100</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2012 </div></td> <td> </td> <td> </td> <td align="right">114</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(9</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">105</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2013 </div></td> <td> </td> <td> </td> <td align="right">121</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(10</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">111</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2014 </div></td> <td> </td> <td> </td> <td align="right">127</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(12</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">115</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">2015 </div></td> <td> </td> <td> </td> <td align="right">133</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">120</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">2016 to 2020 </div></td> <td> </td> <td> </td> <td align="right">695</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(69</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">626</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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 style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Target</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Pension plan assets:</b> </div></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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">29</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>29</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">33</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity </div></td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>27</b></td> <td> </td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income </div></td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>22</b></td> <td> </td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>13</b></td> <td> </td> <td> </td> <td> </td> <td align="right">13</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>9</b></td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>100</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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="left" colspan="11"><b>Other postretirement benefit plan assets:</b></td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">42</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>40</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">37</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">International equity </div></td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>21</b></td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic fixed income </div></td> <td> </td> <td> </td> <td align="right">27</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>29</b></td> <td> </td> <td> </td> <td> </td> <td align="right">32</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Global fixed income </div></td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right"><b>3</b></td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>100</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">100</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></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>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">1,266</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">511</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,778</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">1,277</td> <td> </td> <td> </td> <td> </td> <td align="right">443</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,720</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">304</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">304</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">594</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">596</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">201</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">201</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">478</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">480</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">184</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">674</td> <td> </td> <td> </td> <td> </td> <td align="right">858</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">638</td> <td> </td> <td> </td> <td> </td> <td align="right">638</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,729</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,778</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,315</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,822</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,728</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,778</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,315</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,821</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table>    <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: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Assets</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Inputs</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Inputs</b></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>As of December 31, 2009:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="27"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic equity* </div></td> <td> </td> <td align="right">$</td> <td align="right">1,117</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">462</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,579</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International equity* </div></td> <td> </td> <td> </td> <td align="right">1,444</td> <td> </td> <td> </td> <td> </td> <td align="right">144</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,588</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fixed income: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">U.S. Treasury, government, and agency bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">416</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">416</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Mortgage- and asset-backed securities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Corporate bonds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">279</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">279</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Pooled funds </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Cash equivalents and other </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">341</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">344</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Special situations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</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 valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Real estate investments </div></td> <td> </td> <td> </td> <td align="right">174</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">547</td> <td> </td> <td> </td> <td> </td> <td align="right">721</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Private equity </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">555</td> <td> </td> <td> </td> <td> </td> <td align="right">555</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,738</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,765</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,605</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</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> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(6</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">2,733</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,764</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,599</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <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>Level 1 securities consist of actively traded stocks while Level 2 securities consist of pooled funds. Management believes that the portfolio is well-diversified with no significant concentrations of risk.</td> </tr> </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="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="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>547</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>555</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">839</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">490</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return on investments: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments held at year end </div></td> <td> </td> <td> </td> <td align="right"><b>59</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>67</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(240</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">37</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments sold during the year </div></td> <td> </td> <td> </td> <td align="right"><b>18</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>18</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(65</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total return on investments </div></td> <td> </td> <td> </td> <td align="right"><b>77</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>85</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(305</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">47</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases, sales, and settlements </div></td> <td> </td> <td> </td> <td align="right"><b>50</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">13</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers into/out of Level 3 </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</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="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>674</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>638</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">547</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">555</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">2009</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Real Estate</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="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="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Investments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Private Equity</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>24</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>24</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">36</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Actual return on investments: </div></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> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments held at year end </div></td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </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">(10</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Related to investments sold during the year </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total return on investments </div></td> <td> </td> <td> </td> <td align="right"><b>2</b></td> <td> </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">(13</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases, sales, and settlements </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers into/out of Level 3 </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</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="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>26</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>23</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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="left"><b>Year Ended December 31</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2009</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2008</td> </tr>   <tr style="font-size: 1px"> <td colspan="13" 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">Expected volatility </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>17.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">15.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">13.1</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Expected term <i>(in years)</i> </div></td> <td> </td> <td> </td> <td align="right"><b>5.0</b></td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> <td> </td> <td> </td> <td align="right">5.0</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>2.4</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">1.9</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">2.8</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividend yield </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>5.6</b></td> <td nowrap="nowrap"><b>%</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">5.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.5</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average grant-date fair value </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>2.23</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1.80</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2.37</td> <td> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Shares Subject</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>To Option</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Exercise Price</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2009 </div></td> <td> </td> <td> </td> <td align="right">48,247,319</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">32.10</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">9,582,288</td> <td> </td> <td> </td> <td> </td> <td align="right">31.22</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7,024,176</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">28.15</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(93,845</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31.02</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" 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>Outstanding at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>50,711,586</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.48</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Exercisable at December 31, 2010</b> </div></td> <td> </td> <td> </td> <td align="right"><b>34,564,434</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>32.81</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Average Common Stock Shares</b></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="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: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in thousands)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">As reported shares </div></td> <td> </td> <td> </td> <td align="right"><b>832,189</b></td> <td> </td> <td> </td> <td> </td> <td align="right">794,795</td> <td> </td> <td> </td> <td> </td> <td align="right">771,039</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of options </div></td> <td> </td> <td> </td> <td align="right"><b>4,792</b></td> <td> </td> <td> </td> <td> </td> <td align="right">1,620</td> <td> </td> <td> </td> <td> </td> <td align="right">3,809</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" 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">Diluted shares </div></td> <td> </td> <td> </td> <td align="right"><b>836,981</b></td> <td> </td> <td> </td> <td> </td> <td align="right">796,415</td> <td> </td> <td> </td> <td> </td> <td align="right">774,848</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="13" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="45%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="3%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fair</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Unfunded</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Redemption</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Redemption</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>As of December 31, 2010:</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Commitments</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Frequency</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Notice Period</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <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> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nuclear decommissioning trusts: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Corporate bonds – commingled funds </div></td> <td> </td> <td align="right">$</td> <td align="right">65</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">1 to 3 days</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other – commingled funds </div></td> <td> </td> <td> </td> <td align="right">67</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">Not applicable</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trust-owned life insurance </div></td> <td> </td> <td> </td> <td align="right">86</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">15 days</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash equivalents and restricted cash: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market funds </div></td> <td> </td> <td> </td> <td align="right">351</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom" nowrap="nowrap">Not applicable</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other: </div></td> <td> </td> <td> </td> <td> </td> <td> </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> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Money market funds </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td align="center" valign="bottom">None</td> <td> </td> <td align="center" valign="bottom">Daily</td> <td> </td> <td align="center" valign="bottom">Not applicable</td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level 3</b></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="3" style="border-bottom: 1px solid #000000"><b>Other</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Beginning balance at December 31, 2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">35</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total gains (losses) — realized/unrealized: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Included in earnings </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Included in OCI </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Transfers out of Level 3 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(20</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Ending balance at December 31, 2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>19</b></td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Carrying Amount</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term debt: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:75px; text-indent:-15px"><b>2010</b> </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>19,356</b></td> <td> </td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>20,073</b></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:75px; text-indent:-15px">2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">19,145</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19,567</td> <td> </td> </tr>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <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>   <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"> <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"> <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>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 9pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <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>   <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>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <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>   <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>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left"> </div> <div style="display: none"></div> <div style="display: none">VALUATION AND QUALIFYING ACCOUNTS </div> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES<br /> SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS<br /> FOR THE YEARS ENDED DECEMBER 31, 2010, 2009, AND 2008</b><br /> <i>(Stated in Thousands of Dollars)</i> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </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> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000">Additions</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Balance at Beginning</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Charged to</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Charged to</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Balance at End</td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left">Description</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">of Period</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Income</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Other Accounts</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">Deductions</td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">of Period</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">Provision for uncollectible accounts </div></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> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">24,568</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">62,137</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td colspan="3" align="right" nowrap="nowrap">$61,786 (Note)</td> <td> </td> <td align="right">$</td> <td align="right">24,919</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">2009 </div></td> <td> </td> <td> </td> <td align="right">26,326</td> <td> </td> <td> </td> <td> </td> <td align="right">58,722</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td colspan="3" align="right" nowrap="nowrap">60,480 (Note)</td> <td> </td> <td> </td> <td align="right">24,568</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">2008 </div></td> <td> </td> <td> </td> <td align="right">22,142</td> <td> </td> <td> </td> <td> </td> <td align="right">60,184</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td colspan="3" align="right" nowrap="nowrap">56,000 (Note)</td> <td> </td> <td> </td> <td align="right">26,326</td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <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"><i>(Note)</i></td> <td> </td> <td><i>Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.</i></td> </tr> </table> </div>

false --12-31 FY 2010 2010-12-31 10-K 0000092122 845614704 Yes Large Accelerated Filer 27600000000 SOUTHERN CO No Yes 44000000 32000000 419000000 441000000 18700000000 19700000000 75000000 127000000 360000000 577000000 206000000 206000000 360000000 24000000 0 553000000 0 40000000 48000000 40000000 48000000 1 0.50 19900000 4100000 9000000 0.17 by more than 75 million -0.019 -0.027 -0.022 3200000000 270000000 0.95 0.112 0.153 0.125 23000000 24000000 23000000 108000000 216000000 over 10 years Over a three-year period 3000000 3000000 3000000 2000000 2000000 2000000 in excess of $296 million 41000000 174000000 1300000000 33000000 45000000 20000000 0.01 876000000 222000000 373000000 70000000 0.024 0.043 297000000 38.01 75000000 1/2 of 1% or less 554000000 30000000 0 0 0 335000000 134000000 55000000 1008000000 372000000 260000000 60000000 210000000 106000000 0 0 125000000 562000000 -87000000 -282000000 -89000000 -296000000 Every 5 years Every 5 years 0.50 943000000 $1 billion or more 613000000 143000000 22000000 51000000 83000000 215000000 -51000000 1000000 2000000 -3000000 -56000000 -2000000 25000 37500 17000000 30000000 1048000000 up to $2.88 billion 2400000000 5.91 42000000 70000000 95000000 400000000 12 0.06 0.09 1047000000 1280000000 248000000 235000000 22000000 -105000000 -91000000 373000000 218000000 4000000 626000000 120000000 115000000 100000000 111000000 105000000 5599000000 1102000000 1764000000 2733000000 -6000000 -1000000 0 -5000000 6821000000 -1000000 1315000000 2778000000 2728000000 0 0 -1000000 21000000 36000000 839000000 490000000 5605000000 725000000 0 270000000 279000000 98000000 191000000 31000000 48000000 459000000 10000000 1579000000 24000000 721000000 113000000 2738000000 22000000 1765000000 0 218000000 1588000000 1102000000 344000000 416000000 54000000 555000000 18000000 12000000 5000000 0 24000000 0 555000000 174000000 18000000 0 12000000 24000000 0 279000000 0 547000000 0 0 0 0 5000000 0 0 0 270000000 0 0 42000000 0 0 0 0 0 1444000000 1117000000 149000000 7000000 3000000 10000000 0 462000000 22000000 0 0 0 144000000 416000000 0 0 62000000 0 0 0 0 0 0 36000000 0 0 341000000 0 0 54000000 0 113000000 0 790000000 6822000000 99000000 509000000 23000000 201000000 2729000000 34000000 2778000000 638000000 858000000 232000000 0 1778000000 15000000 480000000 23000000 291000000 41000000 1315000000 247000000 0 304000000 596000000 10000000 49000000 221000000 1720000000 33000000 247000000 2000000 0 0 7000000 674000000 511000000 0 0 0 304000000 0 0 23000000 0 34000000 1000000 10000000 0 638000000 26000000 0 0 176000000 0 50000000 0 15000000 2000000 0 201000000 1266000000 0 0 49000000 0 0 0 443000000 0 0 0 594000000 478000000 0 0 0 291000000 184000000 45000000 0 0 41000000 0 0 0 0 1277000000 0 23000000 0 0 0 4000000 0 4000000 21000000 20000000 1000000 5000000 5000000 0 32000000 1000000 31000000 10000000 10000000 0 -41000000 -1000000 -26000000 -2000000 -41000000 -20000000 1 1 1443000000 29000000 1414000000 89000000 1325000000 1503000000 1476000000 27000000 1378000000 98000000 1513000000 19000000 1494000000 1375000000 119000000 0.032 0.032 0.033 30 3 1.256 Dollars per Euro* 85.326 Yen per Dollar* Various through July 2012 Various through May 2011 1.75 -0.004 -0.009 0.027 1100 4900000000 5100000000 4500000000 2047 2034 2037 2065 2063 2067 420000000 575000000 93000000 190000000 168000000 31000000 17000000 18000000 2100000000 6000000 927000000 220000000 0 0 65000000 372000000 60000000 210000000 81000000 0 40000000 0 0 0 0 41000000 223000000 92000000 4 million mmBtu 14000000 141000000 1823000000 19000000 820000000 984000000 9000000 -1000000 10000000 0 3000000 207000000 207000000 0 0 14000000 144000000 40000000 65000000 86000000 2000000 351000000 67000000 Weekly over a 3-year period 2.681 2.403 0.25 26000000 245000000 25000000 23000000 -15000000 19000000 -2000000 82000000 2722000000 2604000000 3066000000 293000000 -95000000 -308000000 18000000 7000000 14000000 -3000000 -278000000 215000000 198000000 139000000 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4400000000 50% of the credits received 24 24 18 18 2000000 1000000 1000000 7000000 4000000 3000000 -177000000 -66000000 -111000000 -200000000 -145000000 -55000000 which may range up to 65 years Up to 23 years 137000000 31000000 0.73 0.1225 0.1025 14055000000 13307000000 14791000000 100000000 50000000 50000000 0.1115 2.37 1.8 2.23 66000000 188000000 6 5 0.004 0.003 0.045 0.024 0.070 0.044 Next 12 Months 571000000 1132000000 629000000 500000000 583000000 72000000 1060000000 71000000 46000000 22600000 19600000 22000000 3000000 0 79000000 0.011 0.011 10 1 1 6100000000 14878000000 16202000000 0.436 0.457 4980000000 4876000000 12371000000 13122000000 15172000000 15880000000 8 255000000 37.62 32.05 32.67 34.47 33.73 35.45 37.73 38.62 26.48 27.19 30.27 30.89 30.85 32.04 33.00 37.10 394000000 420000000 less than 1% of revenues 398000000 214000000 333000000 209000000 5900000000 None None None None None 166000000 187000000 52879000000 55985000000 145000000 151000000 620000000 0.0124 2400000000 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1.6625

0.42

1.7325

0.4375

1.8025

0.4550

1000000000

820000000

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0.0588

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0.0588

0.0820

0.0051

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0.0600

0.0575

0.0470

0.0490

0.0557

0.0078

0.0097

0.0600

0.0625

0.0820

0.0051

0.0575

0.0490

0.0600

0.0557

0.0078

0.0062

0.0044

0.0225

0.0485

0.0026

0.0415

0.0238

0.04

0.047

0.0130

0.0080

0.0035

0.0056

0.0485

0.0026

0.0415

0.0080

0.0238

0.0130

0.04

0.0225

0.0062

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1150000000

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0.0675

0.0583

0.0593

0.0540

0.0552

0.0759

0.0850

0.0751

0.0740

0.0875

0.0375

0.0418

0.0384

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0.03

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0.37

0.03

0.29

0.33

0.10

0.21

0.09

0.4

0.27

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100000000

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82000000

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0.13

0.04

0.13

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10000000

28000000

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26000000

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172000000

0.15

0.04

0.27

0.18

0.42

0.29

0.10

0.28

0.03

0.01

0.03

0.05

0.15

0.050

1704000000

1788000000

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23000000

191000000

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145000000

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2011-10-01

2014-05-01

1279000000

1369000000

1496000000

2.26

0.16

2.07

0.61

0.99

0.31

0.60

2.37

0.62

0.98

0.18

2.25

2.06

2.36

0.336

0.344

0.335

0.350

0.35

-0.013

-0.014

-0.012

-0.004

-0.007

0.008

0.009

0.008

-0.010

-0.001

-0.002

-0.001

0.026

0.021

0.018

-0.004

17000000000

14055000000

2400000000

545000000

15642000000

13307000000

1802000000

533000000

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589000000

1994000000

14791000000

113000000

19000000

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22000000

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1447000000

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62000000

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10000000

206000000

-1000000

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35000000

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805000000

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940000000

3000000

26000000

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10000000

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3809000

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4792000

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0.918

0.254

0.535

0.457

0.333

0.650

0.084

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161000000

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615000000

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8822000000

9438000000

304000000

790000000

304000000

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1778000000

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1963000000

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319000000

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510000000

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2260000000

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123000000

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125000000

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1369000000

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6000000

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4670000000

4086000000

720000000

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2304000000

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1580000000

-949000000

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100

60000000

65000000

60000000

65000000

14000000

3000000

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14000000

2000000

3000000

508000000

784000000

88000000

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34000000

340000000

18000000

1807000000

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53588000000

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194000000

43000000

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14335000000

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1129000000

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4108000000

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4913000000

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331000000

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14700000000

1800000000

15200000000

1600000000

1090000000

600000000

End of a three-year

141711

1050052

30.13

908341

0.045

0.054

0.056

5.0

0.131

0.156

0.174

0.207

0.028

0.019

0.024

0.014

10000000

34564434

32.81

-7024176

45000000

9000000

57000000

28.15

-93845

31.02

9582288

31.22

292000000

48247319

50711586

32.1

32.48

763503000

-399000

-424000

777616000

-505000

820152000

843814000

-474000

400000000

1000000

639000000

1297000000

956000000

690000000

1400000000

1300000000

0.003

110000000

85000000

86000000

13092000000

1454000000

707000000

3817000000

7155000000

-30000000

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13983000000

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3888000000

1893000000

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7612000000

15585000000

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2995000000

707000000

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4101000000

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16909000000

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3702000000

-70000000

8366000000

4219000000

707000000

6000000

1000000

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2000000

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1000000

3000000

-3000000

-1000000

-2000000

14113000

42536000

23662000

473000000

71000000

402000000

1287000000

213000000

1074000000

772000000

654000000

118000000

20000000

23000000

33000000

53000000

797000000

818000000

869000000

498000000

375000000

81000000

294000000

375000000

294000000

81000000

500000

25000

81000

-31000

15000000

208000000

178000000

255000000

274000000

264000000

146000000

199000000

296000000

-10000000

-27000000

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49000000

53000000

62000000

130000000

12000000

62000000

31000000

15000000

21000000

29000000

33000000

6000000

8000000

97000000

-2000000

143000000

199000000

217000000

6818000000

147000000

5952000000

160000000

6699000000

184000000

3748000000

3526000000

4010000000

22142000

26326000

24568000

24919000

60184000

58722000

62137000

56000000

60480000

61786000

775000000

796000000

837000000

771000000

795000000

832000000

Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.