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SECURITIES AND EXCHANGE COMMISSION
þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission | Registrant, State of Incorporation, | I.R.S. Employer | ||
File Number | Address and Telephone Number | Identification No. | ||
1-3526 | The Southern Company | 58-0690070 | ||
(A Delaware Corporation) | ||||
30 Ivan Allen Jr. Boulevard, N.W. | ||||
Atlanta, Georgia 30308 | ||||
(404) 506-5000 | ||||
1-3164 | Alabama Power Company | 63-0004250 | ||
(An Alabama Corporation) | ||||
600 North 18th Street | ||||
Birmingham, Alabama 35291 | ||||
(205) 257-1000 | ||||
1-6468 | Georgia Power Company | 58-0257110 | ||
(A Georgia Corporation) | ||||
241 Ralph McGill Boulevard, N.E. | ||||
Atlanta, Georgia 30308 | ||||
(404) 506-6526 | ||||
0-2429 | Gulf Power Company | 59-0276810 | ||
(A Florida Corporation) | ||||
One Energy Place | ||||
Pensacola, Florida 32520 | ||||
(850) 444-6111 | ||||
001-11229 | Mississippi Power Company | 64-0205820 | ||
(A Mississippi Corporation) | ||||
2992 West Beach | ||||
Gulfport, Mississippi 39501 | ||||
(228) 864-1211 | ||||
1-5072 | Savannah Electric and Power Company | 58-0418070 | ||
(A Georgia Corporation) | ||||
600 East Bay Street | ||||
Savannah, Georgia 31401 | ||||
(912) 644-7171 | ||||
333-98553 | Southern Power Company | 58-2598670 | ||
(A Delaware Corporation) | ||||
30 Ivan Allen Jr. Boulevard, N.W. | ||||
Atlanta, Georgia 30308 | ||||
(404) 506-5000 |
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Title of each class | Registrant | |||
Common Stock, $5 par value | The Southern Company | |||
Mandatorily redeemable preferred securities, $25 liquidation amount | ||||
7.125% Trust Preferred Securities2 | ||||
Class A preferred, cumulative, $25 stated capital | Alabama Power Company | |||
5.20% Series | 5.83% Series | |||
5.30% Series | ||||
Senior Notes | ||||
5 5/8% Series AA | ||||
Senior Notes | Georgia Power Company | |||
5.90% Series O | 6% Series R | 5.70% Series X | ||
5.75% Series T | 6% Series W | |||
Mandatorily redeemable preferred securities, $25 liquidation amount | ||||
7 1/8% Trust Preferred Securities3 | ||||
5 7/8% Trust Preferred Securities4 | ||||
Senior Notes | Gulf Power Company | |||
5.25% Series H | 5.75% Series I | |||
5.875% Series J | ||||
Mandatorily redeemable preferred securities, $25 liquidation amount | ||||
7.375% Trust Preferred Securities5 |
1 | As of December 31, 2005. | |
2 | Issued by Southern Company Capital Trust VI and guaranteed by The Southern Company. | |
3 | Issued by Georgia Power Capital Trust V and guaranteed by Georgia Power Company. | |
4 | Issued by Georgia Power Capital Trust VII and guaranteed by Georgia Power Company. | |
5 | Issued by Gulf Power Capital Trust III and guaranteed by Gulf Power Company. |
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Senior Notes | Mississippi Power Company | |
5 5/8% Series E | ||
Depositary preferred shares, each representing one-fourth of a share of preferred stock, cumulative, $100 par value | ||
5.25% Series | ||
Mandatorily redeemable preferred securities, $25 liquidation amount | ||
7.20% Trust Originated Preferred Securities6 | ||
___________________________________ | ||
Preferred stock, non-cumulative, $25 par value Savannah Electric and Power Company | ||
6% Series | ||
Senior Notes | ||
5.75% Series G |
Title of each class | Registrant | |||||
Preferred stock, cumulative, $100 par value | Alabama Power Company | |||||
4.20% Series | 4.60% Series | 4.72% Series | ||||
4.52% Series | 4.64% Series | 4.92% Series | ||||
Class A Preferred Stock, cumulative, $100,000 stated capital | ||||||
Flexible Money Market (Series 2003A) | ||||||
___________________________________ | ||||||
Preferred stock, cumulative, $100 stated value | Georgia Power Company | |||||
$4.60 Series (1954)8 | ||||||
___________________________________ | ||||||
Preference stock, non-cumulative, $100 par value | Gulf Power Company | |||||
6.000% Series | ||||||
___________________________________ | ||||||
Preferred stock, cumulative, $100 par value | Mississippi Power Company | |||||
4.40% Series | 4.60% Series | |||||
4.72% Series | ||||||
___________________________________ |
6 | Issued by Mississippi Power Capital Trust II and guaranteed by Mississippi Power Company. | |
7 | As of December 31, 2005. | |
8 | This series was redeemed in January 2006. |
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Registrant | Yes | No | ||
The Southern Company | x | |||
Alabama Power Company | x | |||
Georgia Power Company | x | |||
Gulf Power Company | x | |||
Mississippi Power Company | x | |||
Savannah Electric and Power Company | x | |||
Southern Power Company | x |
the Act. Yes ___Noþ (Response applicable to all registrants.)
Large | ||||||
Accelerated | Accelerated | Non-accelerated | ||||
Registrant | Filer | Filer | Filer | |||
The Southern Company | X | |||||
Alabama Power Company | X | |||||
Georgia Power Company | X | |||||
Gulf Power Company | X | |||||
Mississippi Power Company | X | |||||
Savannah Electric and Power Company | X | |||||
Southern Power Company | X |
Act). Yeso Noþ (Response applicable to all registrants.)
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Description of | Shares Outstanding | ||||||
Registrant | Common Stock | at January 31, 2006 | |||||
The Southern Company | Par Value $5 Per Share | 741,738,001 | |||||
Alabama Power Company | Par Value $40 Per Share | 9,250,000 | |||||
Georgia Power Company | Without Par Value | 7,761,500 | |||||
Gulf Power Company | Without Par Value | 992,717 | |||||
Mississippi Power Company | Without Par Value | 1,121,000 | |||||
Savannah Electric and Power Company | Par Value $5 Per Share | 10,844,635 | |||||
Southern Power Company | Par Value $0.01 Per Share | 1,000 |
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Term | Meaning | |
AEC | Alabama Electric Cooperative, Inc. | |
AFUDC | Allowance for Funds Used During Construction | |
Alabama Power | Alabama Power Company | |
AMEA | Alabama Municipal Electric Authority | |
Clean Air Act | Clean Air Act Amendments of 1990 | |
Dalton | City of Dalton, Georgia | |
DOE | United States Department of Energy | |
Energy Act of 1992 | Energy Policy Act of 1992 | |
Energy Act of 2005 | Energy Policy Act of 2005 | |
Energy Solutions | Southern Company Energy Solutions, Inc. | |
EPA | United States Environmental Protection Agency | |
FERC | Federal Energy Regulatory Commission | |
FMPA | Florida Municipal Power Agency | |
FP&L | Florida Power & Light Company | |
Gas South | Gas South, LLC, an affiliate of Cobb Electric Membership Corporation | |
Georgia Power | Georgia Power Company | |
Gulf Power | Gulf Power Company | |
Hampton | City of Hampton, Georgia | |
Holding Company Act | Public Utility Holding Company Act of 1935, as amended | |
IBEW | International Brotherhood of Electrical Workers | |
IIC | Intercompany Interchange Contract | |
IPP | Independent power producer | |
IRP | Integrated Resource Plan | |
IRS | Internal Revenue Service | |
JEA | Jacksonville Electric Authority | |
KUA | Kissimmee Utility Authority | |
MEAG | Municipal Electric Authority of Georgia | |
Mirant | Mirant Corporation | |
Mississippi Power | Mississippi Power Company | |
Moody’s | Moody’s Investors Service | |
NRC | Nuclear Regulatory Commission | |
OPC | Oglethorpe Power Corporation | |
OUC | Orlando Utilities Commission | |
PPA | Power Purchase Agreement | |
Progress Energy | Florida Power Corporation, d/b/a Progress Energy Florida, Inc. | |
PSC | Public Service Commission | |
registrants | The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company and Southern Power Company | |
retail operating companies | Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company and Savannah Electric and Power Company |
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(continued)
RFP | Request for Proposal | |
RTO | Regional Transmission Organization | |
RUS | Rural Utility Service (formerly Rural Electrification Administration) | |
S&P | Standard and Poor’s, a division of The McGraw-Hill Companies | |
Savannah Electric | Savannah Electric and Power Company | |
SCS | Southern Company Services, Inc. (the system service company) | |
SEC | Securities and Exchange Commission | |
SEGCO | Southern Electric Generating Company | |
SEPA | Southeastern Power Administration | |
SERC | Southeastern Electric Reliability Council | |
SMEPA | South Mississippi Electric Power Association | |
Southern Company | The Southern Company | |
Southern Company Gas | Southern Company Gas LLC | |
Southern Company system | Southern Company, the retail operating companies, Southern Power, SEGCO, Southern Nuclear, SCS, SouthernLINC Wireless, Southern Company Gas and other subsidiaries | |
Southern Holdings | Southern Company Holdings, Inc. | |
SouthernLINC Wireless | Southern Communications Services, Inc. | |
Southern Nuclear | Southern Nuclear Operating Company, Inc. | |
Southern Power | Southern Power Company | |
Southern Telecom | Southern Telecom, Inc. | |
TVA | Tennessee Valley Authority |
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FORWARD-LOOKING INFORMATION
• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Act of 2005, and also changes in environmental, tax and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; |
• | current and future litigation, regulatory investigations, proceedings or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, FERC matters, IRS audits and Mirant matters; |
• | the effects, extent and timing of the entry of additional competition in the markets in which Southern Company’s subsidiaries operate; |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population and business growth (and declines); |
• | available sources and costs of fuels; |
• | ability to control costs; |
• | investment performance of Southern Company’s employee benefit plans; |
• | advances in technology; |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; |
• | the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; |
• | internal restructuring or other restructuring options that may be pursued; |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; |
• | the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due; |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; |
• | the direct or indirect effect on Southern Company’s business resulting from terrorist incidents and the threat of terrorist incidents; |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company’s and its subsidiaries’ credit ratings; |
• | the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes or other similar occurrences; |
• | the direct or indirect effects on Southern Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; |
• | the effect of accounting pronouncements issued periodically by standard setting bodies; and |
• | other factors discussed elsewhere herein and in other reports filed by the registrants from time to time with the SEC. |
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Southern | ||||||||||||||||||||||||||||
Company | Alabama | Georgia | Gulf | Mississippi | Savannah | Southern | ||||||||||||||||||||||
System* | Power | Power | Power | Power | Electric | Power | ||||||||||||||||||||||
New generation | $ | 127 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 127 | ||||||||||||||
Other generating facilities, including associated plant substations | 1,110 | 458 | 533 | 72 | 23 | 9 | 15 | |||||||||||||||||||||
New business | 356 | 143 | 156 | 26 | 20 | 11 | — | |||||||||||||||||||||
Transmission | 450 | 104 | 296 | 15 | 24 | 11 | — | |||||||||||||||||||||
Joint line and substation | 5 | — | — | 5 | — | — | — | |||||||||||||||||||||
Distribution | 284 | 127 | 97 | 15 | 33 | 12 | — | |||||||||||||||||||||
Nuclear fuel | 153 | 58 | 95 | — | — | — | — | |||||||||||||||||||||
General plant | 288 | 61 | 74 | 30 | 26 | 2 | 20 | |||||||||||||||||||||
$ | 2,773 | $ | 951 | $ | 1,251 | $ | 163 | $ | 126 | $ | 45 | $ | 162 | |||||||||||||||
* | These amounts include the retail operating companies and Southern Power (as detailed in the table above) as well as the amounts for the other subsidiaries. See “Other Business” herein for additional information. |
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Coal | Nuclear | Hydro | Gas | Oil | ||||||||||||||||
% | % | % | % | % | ||||||||||||||||
Alabama Power | ||||||||||||||||||||
2003 | 64 | 19 | 8 | 9 | * | |||||||||||||||
2004 | 65 | 19 | 6 | 10 | * | |||||||||||||||
2005 | 67 | 19 | 6 | 8 | * | |||||||||||||||
Georgia Power | ||||||||||||||||||||
2003 | 75 | 22 | 3 | * | * | |||||||||||||||
2004 | 76 | 22 | 2 | * | * | |||||||||||||||
2005 | 75 | 19 | 2 | 3 | 1 | |||||||||||||||
Gulf Power | ||||||||||||||||||||
2003 | 87 | ** | ** | 13 | * | |||||||||||||||
2004 | 84 | ** | ** | 16 | * | |||||||||||||||
2005 | 86 | ** | ** | 14 | * | |||||||||||||||
Mississippi Power | ||||||||||||||||||||
2003 | 74 | ** | ** | 26 | * | |||||||||||||||
2004 | 69 | ** | ** | 31 | * | |||||||||||||||
2005 | 70 | ** | ** | 30 | * | |||||||||||||||
Savannah Electric | ||||||||||||||||||||
2003 | 94 | ** | ** | 4 | 2 | |||||||||||||||
2004 | 96 | ** | ** | 3 | 1 | |||||||||||||||
2005 | 79 | ** | ** | 20 | 1 | |||||||||||||||
SEGCO | ||||||||||||||||||||
2003 | 100 | ** | ** | * | * | |||||||||||||||
2004 | 100 | ** | ** | * | * | |||||||||||||||
2005 | 100 | ** | ** | * | * | |||||||||||||||
Southern Power | ||||||||||||||||||||
2003 | ** | ** | ** | 99 | 1 | |||||||||||||||
2004 | ** | ** | ** | 100 | * | |||||||||||||||
2005 | ** | ** | ** | 100 | * | |||||||||||||||
Southern Company system — weighted average | ||||||||||||||||||||
2003 | 71 | 16 | 4 | 9 | * | |||||||||||||||
2004 | 69 | 16 | 3 | 12 | * | |||||||||||||||
2005 | 71 | 15 | 3 | 11 | * |
* | Less than 0.5%. | |
** | Not applicable. |
2003 | 2004 | 2005 | ||||||||||
Alabama Power | 1.54 | 1.69 | 2.02 | |||||||||
Georgia Power | 1.46 | 1.55 | 2.04 | |||||||||
Gulf Power | 2.11 | 2.32 | 2.77 | |||||||||
Mississippi Power | 1.96 | 2.50 | 3.11 | |||||||||
Savannah Electric | 2.40 | 2.62 | 4.15 | |||||||||
SEGCO | 1.54 | 1.60 | 1.69 | |||||||||
Southern Company system — weighted average | 1.67 | 1.89 | 2.39 |
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Employees | ||||
at | ||||
December 31, 2005 | ||||
Alabama Power | 6,621 | |||
Georgia Power | 8,713 | |||
Gulf Power | 1,335 | |||
Mississippi Power | 1,254 | |||
Savannah Electric | 560 | |||
SCS | 3,415 | |||
Southern Company Gas | * | |||
Southern Holdings** | 11 | |||
Southern Nuclear | 3,101 | |||
Southern Power | *** | |||
Other | 544 | |||
Total | 25,554 | |||
* | Southern Company Gas has no employees. Southern Company Gas has agreements with SCS and Georgia Power whereby employee services are rendered at cost. | |
** | One of Southern Holdings’ subsidiaries has 11 employees. Southern Holdings has agreements with SCS whereby all other employee services are rendered at cost. | |
*** | Southern Power has no employees. Southern Power has agreements with SCS and the retail operating companies whereby employee services are rendered at cost. |
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• | operator error and breakdown or failure of equipment or processes; | ||
• | operating limitations that may be imposed by environmental or other regulatory requirements; | ||
• | labor disputes; | ||
• | terrorist attacks; | ||
• | fuel or material supply interruptions; and | ||
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes or other similar occurrences. |
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• | shortages and inconsistent quality of equipment, materials and labor; | ||
• | work stoppages; | ||
• | permits, approvals and other regulatory matters; | ||
• | adverse weather conditions; | ||
• | unforeseen engineering problems; | ||
• | environmental and geological conditions; | ||
• | delays or increased costs to interconnect its facilities to transmission grids; | ||
• | unanticipated cost increases; and | ||
• | attention to other projects. |
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• | prevailing market prices for coal, natural gas, fuel oil and other fuels used in the generation facilities of the retail operating companies, Southern Power and Southern Company, including associated transportation costs, and supplies of such commodities; | ||
• | demand for energy and the extent of additional supplies of energy available from current or new competitors; | ||
• | liquidity in the general wholesale electricity market; | ||
• | weather conditions impacting demand for electricity; | ||
• | seasonality; | ||
• | transmission or transportation constraints or inefficiencies; | ||
• | availability of competitively priced alternative energy sources; | ||
• | forced or unscheduled plant outages for us, our competitors or third party providers; | ||
• | the financial condition of market participants; | ||
• | the economy in the service territory and in general, including the impact of economic conditions on industrial and commercial demand for electricity; | ||
• | natural disasters, wars, embargos, acts of terrorism and other catastrophic events; and | ||
• | federal, state and foreign energy and environmental regulation and legislation. |
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• | an economic downturn; | ||
• | the bankruptcy of an unrelated energy company; | ||
• | capital market conditions generally; | ||
• | market prices for electricity and gas; | ||
• | terrorist attacks or threatened attacks on Southern Company’s facilities or unrelated energy companies; | ||
• | war or threat of war; or | ||
• | the overall health of the utility industry. |
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Nameplate | ||||||
Generating Station | Location | Capacity(1) | ||||
(Kilowatts) | ||||||
FOSSIL STEAM | ||||||
Gadsden | Gadsden, AL | 120,000 | ||||
Gorgas | Jasper, AL | 1,221,250 | ||||
Barry | Mobile, AL | 1,525,000 | ||||
Greene County | Demopolis, AL | 300,000 | (2) | |||
Gaston Unit 5 | Wilsonville, AL | 880,000 | ||||
Miller | Birmingham, AL | 2,532,288 | (3) | |||
Alabama Power Total | 6,578,538 | |||||
Bowen | Cartersville, GA | 3,160,000 | ||||
Branch | Milledgeville, GA | 1,539,700 | ||||
Hammond | Rome, GA | 800,000 | ||||
McDonough | Atlanta, GA | 490,000 | ||||
McManus | Brunswick, GA | 115,000 | ||||
Mitchell | Albany, GA | 125,000 | ||||
Scherer | Macon, GA | 750,924 | (4) | |||
Wansley | Carrollton, GA | 925,550 | (5) | |||
Yates | Newnan, GA | 1,250,000 | ||||
Georgia Power Total | 9,156,174 | |||||
Crist | Pensacola, FL | 1,022,500 | ||||
Lansing Smith | Panama City, FL | 305,000 | ||||
Scholz | Chattahoochee, FL | 80,000 | ||||
Daniel | Pascagoula, MS | 500,000 | (6) | |||
Scherer Unit 3 | Macon, GA | 204,500 | (4) | |||
Gulf Power Total | 2,112,000 | |||||
Eaton | Hattiesburg, MS | 67,500 | ||||
Sweatt | Meridian, MS | 80,000 | ||||
Watson | Gulfport, MS | 1,012,000 | ||||
Daniel | Pascagoula, MS | 500,000 | (6) | |||
Greene County | Demopolis, AL | 200,000 | (2) | |||
Mississippi Power Total | 1,859,500 | |||||
McIntosh | Effingham County, GA | 163,117 | ||||
Kraft | Port Wentworth, GA | 281,136 | ||||
Savannah Electric Total | 444,253 | |||||
Gaston Units 1-4 | Wilsonville, AL | |||||
SEGCO Total | 1,000,000 | (7) | ||||
Total Fossil Steam | 21,150,465 | |||||
NUCLEAR STEAM | ||||||
Farley | Dothan, AL | |||||
Alabama Power Total | 1,720,000 | |||||
Hatch | Baxley, GA | 899,612 | (8) | |||
Vogtle | Augusta, GA | 1,060,240 | (9) | |||
Georgia Power Total | 1,959,852 | |||||
Total Nuclear Steam | 3,679,852 | |||||
COMBUSTION TURBINES | ||||||
Greene County | Demopolis, AL | |||||
Alabama Power Total | 720,000 | |||||
Bowen | Cartersville, GA | 39,400 | ||||
Intercession City | Intercession City, FL | 47,667 | (10) | |||
McDonough | Atlanta, GA | 78,800 | ||||
McIntosh Units 1,2,3,4,7,8 | Effingham County, GA | 480,000 | ||||
McManus | Brunswick, GA | 481,700 | ||||
Mitchell | Albany, GA | 118,200 | ||||
Robins | Warner Robins, GA | 158,400 | ||||
Wansley | Carrollton, GA | 26,322 | ||||
Wilson | Augusta, GA | 354,100 | ||||
Georgia Power Total | 1,784,589 | |||||
Lansing Smith Unit A | Panama City, FL | 39,400 | ||||
Pea Ridge Units 1-3 | Pea Ridge, FL | 15,000 | ||||
Gulf Power Total | 54,400 | |||||
Chevron Cogenerating Station | Pascagoula, MS | 147,292 | (11) | |||
Sweatt | Meridian, MS | 39,400 | ||||
Watson | Gulfport, MS | 39,360 | ||||
Mississippi Power Total | 226,052 | |||||
Boulevard | Savannah, GA | 59,100 | ||||
Kraft | Port Wentworth, GA | 22,000 | ||||
McIntosh Units 5&6 | Effingham County, GA | 160,000 | ||||
Savannah Electric Total | 241,100 | |||||
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Nameplate | ||||||
Generating Station | Location | Capacity | ||||
(Kilowatts) | ||||||
Dahlberg | Jackson County, GA | 756,000 | ||||
Oleander | Cocoa, FL | 628,400 | ||||
Southern Power Total | 1,384,400 | |||||
Gaston(SEGCO) | Wilsonville, AL | 19,680 | (7) | |||
Total Combustion Turbines | 4,430,221 | |||||
COGENERATION | ||||||
Washington County | Washington County, AL | 123,428 | ||||
GE Plastics Project | Burkeville, AL | 104,800 | ||||
Theodore | Theodore, AL | 236,418 | ||||
Alabama Power Total | 464,646 | |||||
COMBINED CYCLE | ||||||
Barry | Mobile, AL | |||||
Alabama Power Total | 1,070,424 | |||||
McIntosh Units 10&11 | Effingham County, GA | |||||
Georgia Power Total | 1,106,178 | (13) | ||||
Smith | Lynn Haven, FL | |||||
Gulf Power Total | 545,500 | |||||
Daniel (Leased) | Pascagoula, MS | |||||
Mississippi Power Total | 1,070,424 | |||||
McIntosh Units 10&11 | Effingham County, GA | |||||
Savannah Electric Total | 212,742 | (13) | ||||
Stanton Unit A | Orlando, FL | 428,649 | (14) | |||
Harris | Autaugaville, AL | 1,318,920 | ||||
Franklin | Smiths, AL | 1,198,360 | ||||
Wansley | Carrollton, GA | 1,073,000 | ||||
Southern Power Total | 4,018,929 | |||||
Total Combined Cycle | 8,024,197 | |||||
HYDROELECTRIC FACILITIES | ||||||
Bankhead | Holt, AL | 53,985 | ||||
Bouldin | Wetumpka, AL | 225,000 | ||||
Harris | Wedowee, AL | 132,000 | ||||
Henry | Ohatchee, AL | 72,900 | ||||
Holt | Holt, AL | 48,000 | ||||
Jordan | Wetumpka, AL | 100,000 | ||||
Lay | Clanton, AL | 177,000 | ||||
Lewis Smith | Jasper, AL | 157,500 | ||||
Logan Martin | Vincent, AL | 135,000 | ||||
Martin | Dadeville, AL | 182,000 | ||||
Mitchell | Verbena, AL | 170,000 | ||||
Thurlow | Tallassee, AL | 81,000 | ||||
Weiss | Leesburg, AL | 87,750 | ||||
Yates | Tallassee, AL | 47,000 | ||||
Alabama Power Total | 1,669,135 | |||||
Barnett Shoals (Leased) | Athens, GA | 2,800 | ||||
Bartletts Ferry | Columbus, GA | 173,000 | ||||
Goat Rock | Columbus, GA | 38,600 | ||||
Lloyd Shoals | Jackson, GA | 14,400 | ||||
Morgan Falls | Atlanta, GA | 16,800 | ||||
North Highlands | Columbus, GA | 29,600 | ||||
Oliver Dam | Columbus, GA | 60,000 | ||||
Rocky Mountain | Rome, GA | 215,256 | (12) | |||
Sinclair Dam | Milledgeville, GA | 45,000 | ||||
Tallulah Falls | Clayton, GA | 72,000 | ||||
Terrora | Clayton, GA | 16,000 | ||||
Tugalo | Clayton, GA | 45,000 | ||||
Wallace Dam | Eatonton, GA | 321,300 | ||||
Yonah | Toccoa, GA | 22,500 | ||||
6 Other Plants | 18,080 | |||||
Georgia Power Total | 1,090,336 | |||||
Total Hydroelectric Facilities | 2,759,471 | |||||
Total Generating Capacity | 40,508,852 | |||||
Notes: | ||
(1) | See “Jointly-Owned Facilities” herein for additional information. | |
(2) | Owned by Alabama Power and Mississippi Power as tenants in common in the proportions of 60% and 40%, respectively. | |
(3) | Capacity shown is Alabama Power’s portion (91.84%) of total plant capacity. | |
(4) | Capacity shown for Georgia Power is 8.4% of Units 1 and 2 and 75% of Unit 3. Capacity shown for Gulf Power is 25% of Unit 3. | |
(5) | Capacity shown is Georgia Power’s portion (53.5%) of total plant capacity. | |
(6) | Represents 50% of the plant which is owned as tenants in common by Gulf Power and Mississippi Power. |
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(7) | SEGCO is jointly-owned by Alabama Power and Georgia Power. See BUSINESS in Item 1 herein for additional information. | |
(8) | Capacity shown is Georgia Power’s portion (50.1%) of total plant capacity. | |
(9) | Capacity shown is Georgia Power’s portion (45.7%) of total plant capacity. | |
(10) | Capacity shown represents 33-1/3% of total plant capacity. Georgia Power owns a 1/3 interest in the unit with 100% use of the unit from June through September. Progress Energy operates the unit. | |
(11) | Generation is dedicated to a single industrial customer. | |
(12) | Capacity shown is Georgia Power’s portion (25.4%) of total plant capacity. OPC operates the plant. | |
(13) | Capacity shown is Georgia Power’s portion (83.87%) and Savannah Electric’s portion (16.13%), respectively, of total plant capacity. | |
(14) | Capacity shown is Southern Power’s portion (65%) of total plant capacity. |
Percentage Ownership | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | Alabama | Georgia | Progress | Southern | ||||||||||||||||||||||||||||||||||||||||||||
Capacity | Power | AEC | Power | OPC | MEAG | DALTON | Energy | Power | OUC | FMPA | KUA | |||||||||||||||||||||||||||||||||||||
(Megawatts) | ||||||||||||||||||||||||||||||||||||||||||||||||
Plant Miller Units 1 and 2 | 1,320 | 91.8 | % | 8.2 | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||||||||
Plant Hatch | 1,796 | — | — | 50.1 | 30.0 | 17.7 | 2.2 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Plant Vogtle | 2,320 | — | — | 45.7 | 30.0 | 22.7 | 1.6 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Plant Scherer Units 1 and 2 | 1,636 | — | — | 8.4 | 60.0 | 30.2 | 1.4 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Plant Wansley | 1,779 | — | — | 53.5 | 30.0 | 15.1 | 1.4 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Rocky Mountain | 848 | — | — | 25.4 | 74.6 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Intercession City, FL | 143 | — | — | 33.3 | — | — | — | 66.7 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Plant Stanton A | 660 | — | — | — | — | — | — | — | 65 | % | 28 | % | 3.5 | % | 3.5 | % | ||||||||||||||||||||||||||||||||
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(1) | United States of America v. Alabama Power (United States District Court for the Northern District of Alabama) | |
United States of America v. Georgia Power and Savannah Electric (United States District Court for the Northern District of Georgia) See “Environmental Matters — New Source Review Actions” in Note 3 to Southern Company’s and each retail operating company’s financial statements in Item 8 herein for information. | ||
(2) | Environmental Remediation | |
See “Environmental Matters — Environmental Remediation” in Note 3 to Southern Company’s, Georgia Power’s, Gulf Power’s and Mississippi Power’s financial statements in Item 8 herein for information related to environmental remediation. | ||
(3) | In re: Mirant Corporation, et al. (U.S. Bankruptcy Court for the Northern District of Texas) | |
See “Mirant Matters — Mirant Bankruptcy” in Note 3 to Southern Company’s financial statements in Item 8 herein for information. | ||
(4) | MC Asset Recovery, LLC v. Southern Company (in process of transfer to the U.S. District Court for the Northern District of Georgia from the U.S. District Court for the Northern District of Texas) (formerly styled In re: Mirant Corporation, et al. in the U.S. Bankruptcy Court for the Northern District of Texas) | |
See “Mirant Matters — Mirant Bankruptcy Litigation” in Note 3 to Southern Company’s financial statements in Item 8 herein for information. |
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(5) | In re: Mirant Corporation Securities Litigation (United States District Court for the Northern District of Georgia) | |
See “Mirant Matters — Mirant Securities Litigation” in Note 3 to Southern Company’s financial statements in Item 8 herein for information. | ||
(6) | In re: Mirant Corporation ERISA Litigation (United States District Court for the Northern District of Georgia) | |
See “Mirant Matters — Southern Company Employee Savings Plan Litigation” in Note 3 to Southern Company’s financial statements in Item 8 herein for information. | ||
(7) | Sierra Club, et al. v. Georgia Power (United States District Court for the Northern District of Georgia) | |
See “Plant Wansley Environmental Litigation” in Note 3 to Southern Company’s and Georgia Power’s financial statements in Item 8 herein for information. | ||
(8) | Right of Way Litigation | |
See “Right of Way Litigation” in Note 3 to Southern Company’s, Georgia Power’s, Gulf Power’s, Mississippi Power’s and Savannah Electric’s financial statements in Item 8 herein for information. |
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Chairman, President, Chief Executive Officer and
Director
Age 57
Executive Vice President
Age 52
Executive Vice President
Age 57
Executive Vice President, Chief Financial Officer and Treasurer
Age 48
Executive Vice President
Age 56
Executive Vice President
Age 53
Executive Vice President
Age 55
Executive Vice President
Age 54
Executive Vice President of SCS
Age 49
President and Chief Executive Officer of Southern Nuclear
Age 54
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President, Chief Executive Officer and Director
Age 54
Elected in 2001. President, Chief Executive Officer and Director since October 2001; Executive Vice President of Southern Company since February 2002. Previously served as President and Chief Operating Officer of Alabama Power from April 2001 to October 2001; and Vice President of Southern Company from February 1998 to April 2001.
Executive Vice President, Chief Financial Officer and Treasurer
Age 51
Elected in 2004. Executive Vice President, Chief Financial Officer and Treasurer since February 2005. Previously served as Vice President and Comptroller of Alabama Power from 1998 through January 2005.
Executive Vice President
Age 57
Elected in 1999. Executive Vice President of the Customer Service Organization since 2001. Previously served as Executive Vice President of External Affairs from January 2000 to April 2001.
Executive Vice President
Age 50
Elected in 2001. Executive Vice President of External Affairs since 2001. Previously served as Senior Vice President of External Affairs from July 2000 to April 2001.
Senior Vice President
Age 56
Elected in 1999. Senior Vice President of Fossil and Hydro Generation since 1999.
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President, Chief Executive Officer and Director
Age 55
Elected in 2003. President, Chief Executive Officer and Director since January 1, 2004. Previously served as Executive Vice President of Southern Company Generation and Energy Marketing from November 2000 to December 2003; Senior Vice President of Southern Power from November 2002 to December 2003; and Vice President of Southern Power from 2001 until November 2002.
Vice President
Age 45
Elected in 2004. Vice President of External Affairs since January 2005. Previously served as the Director of Economic Development from September 2003 to January 2005; Manager, Sales and Marketing Services from April 2002 to August 2003; and Manager, State Legislative Affairs from August 1996 to April 2002.
Vice President
Age 41
Elected in 2005. Vice President and Senior Production Officer since March 2005. Previously served as Plant Manager, Plant Bowen, Georgia Power from November 2000 until March 2005.
Vice President
Age 52
Elected in 2003. Vice President of Customer Services and Retail Marketing since December 2003. Previously served at Alabama Power as Division Vice President — Southeast Division Office from April 2001 to December 2003; Division Manager — Operations, Birmingham Division Office from January 2001 to April 2001; and Transmission Lines Manager, Corporate Headquarters from March 1997 to January 2001.
Vice President, Treasurer and
Chief Financial Officer
Age 57
Elected in 2005. Vice President, Treasurer and Chief Financial Officer since March 2005. Previously served as Comptroller from 1993 to March 2005.
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Item 5. | MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
(a) | The common stock of Southern Company is listed and traded on the New York Stock Exchange. The common stock is also traded on regional exchanges across the United States. High and low stock prices, per the New York Stock Exchange Composite Tape, during each quarter for the past two years were as follows: |
High | Low | |||||||
2005 | ||||||||
First Quarter | $ | 34.08 | $ | 31.25 | ||||
Second Quarter | 34.91 | 31.78 | ||||||
Third Quarter | 36.16 | 33.47 | ||||||
Fourth Quarter | 36.07 | 33.28 | ||||||
2004 | ||||||||
First Quarter | $ | 30.87 | $ | 29.10 | ||||
Second Quarter | 30.59 | 27.86 | ||||||
Third Quarter | 30.65 | 28.86 | ||||||
Fourth Quarter | 33.92 | 29.95 |
(b) | Number of Southern Company’s common stockholders of record at December 31, 2005: 118,285 | ||
Each of the other registrants have one common stockholder, Southern Company. | |||
(c) | Dividends on each registrant’s common stock are payable at the discretion of their respective board of directors. The dividends on common stock declared by Southern Company and the retail operating companies to their stockholder(s) for the past two years were as follows: |
Registrant | Quarter | 2005 | 2004 | |||||||
(in thousands) | ||||||||||
Southern Company | First | $ | 265,958 | $ | 257,506 | |||||
Second | 277,679 | 258,318 | ||||||||
Third | 277,625 | 264,051 | ||||||||
Fourth | 276,306 | 264,859 | ||||||||
Alabama Power | First | $ | 102,475 | $ | 109,325 | |||||
Second | 102,475 | 109,325 | ||||||||
Third | 102,475 | 109,325 | ||||||||
Fourth | 102,475 | 109,325 | ||||||||
Georgia Power | First | $ | 139,025 | 141,375 | ||||||
Second | 139,025 | 141,375 | ||||||||
Third | 139,025 | 141,375 | ||||||||
Fourth | 139,025 | 141,375 | ||||||||
Gulf Power | First | $ | 17,100 | $ | 17,500 | |||||
Second | 17,100 | 17,500 | ||||||||
Third | 17,100 | 17,500 | ||||||||
Fourth | 17,100 | 17,500 | ||||||||
Mississippi Power | First | $ | 15,500 | $ | 16,550 | |||||
Second | 15,500 | 16,550 | ||||||||
Third | 15,500 | 16,550 | ||||||||
Fourth | 15,500 | 16,550 | ||||||||
Savannah Electric | First | $ | 6,675 | $ | 5,800 | |||||
Second | 6,675 | 5,800 | ||||||||
Third | 6,675 | 5,800 | ||||||||
Fourth | 6,675 | 5,800 | ||||||||
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Maximum | ||||||||||||||||
Total | Approximate | |||||||||||||||
Number | Dollar | |||||||||||||||
Of Shares | Value | |||||||||||||||
Purchased | Of Shares | |||||||||||||||
As Part | That | |||||||||||||||
Total | Average | Of | May Yet | |||||||||||||
Number | Price | Publicly | Be Purchased | |||||||||||||
Of | Paid | Announced | Under the | |||||||||||||
Shares | Per | Plans or | Plans or | |||||||||||||
2005 | Purchased | Share | Programs | Programs (1) | ||||||||||||
October 1-31 | 191,417 | $ | 34.19 | 191,417 | N/A | |||||||||||
November 1-30 | 40,241 | $ | 34.46 | 40,241 | N/A | |||||||||||
December 1-31 | 94,333 | $ | 35.04 | 94,333 | N/A | |||||||||||
Total | 325,991 | $ | 34.47 | 325,991 | N/A |
Item 6. | SELECTED FINANCIAL DATA |
Item 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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The Southern Company and Subsidiary Companies: | ||||
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Alabama Power: | ||||
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Georgia Power: | ||||
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Gulf Power: | ||||
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Mississippi Power: | ||||
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Savannah Electric: | ||||
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Southern Power and Subsidiary Companies: | ||||
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Item 9A. | CONTROLS AND PROCEDURES |
(a) | Management’s Annual Report on Internal Control Over Financial Reporting. |
(1) | Southern Company |
(2) | Retail operating companies and Southern Power |
(b) | Attestation Report of the Registered Public Accounting Firm. |
(1) | Southern Company |
(2) | Retail operating companies and Southern Power |
(c) | Changes in internal controls. |
Item 9B. | OTHER INFORMATION |
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AND SUBSIDIARY COMPANIES
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Chairman, President, and Chief Executive Officer
Executive Vice President, Chief Financial Officer,
and Treasurer
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February 27, 2006
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February 27, 2006
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Key Performance | 2005 Target | 2005 Actual | ||||||
Indicator | Performance | Performance | ||||||
Customer Satisfaction | Top quartile in customer surveys | Top quartile | ||||||
Peak Season EFOR | 2.75% or less | 2.83% | ||||||
EPS | $2.04 - $2.09 | $2.14 | ||||||
Increase (Decrease) | ||||||||||||||||
Amount | from Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in millions) | ||||||||||||||||
Electric operating revenues | $ | 13,278 | $ | 1,813 | $ | 718 | $ | 541 | ||||||||
Fuel | 4,488 | 1,089 | 400 | 213 | ||||||||||||
Purchased power | 731 | 88 | 170 | 24 | ||||||||||||
Other operation and maintenance | 3,220 | 215 | 148 | 105 | ||||||||||||
Depreciation and amortization | 1,137 | 229 | (64 | ) | (16 | ) | ||||||||||
Taxes other than income taxes | 676 | 52 | 40 | 29 | ||||||||||||
Total electric operating expenses | 10,252 | 1,673 | 694 | 355 | ||||||||||||
Operating income | 3,026 | 140 | 24 | 186 | ||||||||||||
Other income, net | 62 | 38 | 22 | 20 | ||||||||||||
Interest expenses | 676 | 62 | 19 | 10 | ||||||||||||
Income taxes | 899 | 24 | 30 | 68 | ||||||||||||
Net income | $ | 1,513 | $ | 92 | $ | (3 | ) | $ | 128 | |||||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Retail — prior year | $ | 9,732 | $ | 8,875 | $ | 8,728 | ||||||
Change in – | ||||||||||||
Base rates | 236 | 41 | 75 | |||||||||
Sales growth | 184 | 216 | 104 | |||||||||
Weather | 34 | 48 | (135 | ) | ||||||||
Fuel and other cost recovery clauses | 979 | 552 | 103 | |||||||||
Retail current year | 11,165 | 9,732 | 8,875 | |||||||||
Sales — for resale | 1,667 | 1,341 | 1,358 | |||||||||
Other electric operating revenues | 446 | 392 | 514 | |||||||||
Electric operating revenues | $ | 13,278 | $ | 11,465 | $ | 10,747 | ||||||
Percent change | 15.8 | % | 6.7 | % | 5.3 | % | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Unit power – | ||||||||||||
Capacity | $ | 201 | $ | 185 | $ | 182 | ||||||
Energy | 237 | 213 | 211 | |||||||||
Total | $ | 438 | $ | 398 | $ | 393 | ||||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Other power sales – | ||||||||||||
Capacity and other | $ | 430 | $ | 308 | $ | 298 | ||||||
Energy | 799 | 635 | 667 | |||||||||
Total | $ | 1,229 | $ | 943 | $ | 965 | ||||||
Amount | Percent Change | |||||||||||||||
(billions of KWH) | 2005 | 2005 | 2004 | 2003 | ||||||||||||
Residential | 51.1 | 2.8 | % | 3.9 | % | (1.9 | )% | |||||||||
Commercial | 51.9 | 3.6 | 3.4 | 0.3 | ||||||||||||
Industrial | 55.1 | (2.2 | ) | 3.6 | 1.0 | |||||||||||
Other | 1.0 | (0.9 | ) | 0.8 | (0.2 | ) | ||||||||||
Total retail | 159.1 | 1.2 | 3.6 | (0.2 | ) | |||||||||||
Sales for resale | 37.8 | 7.3 | (13.0 | ) | 24.5 | |||||||||||
Total | 196.9 | 2.3 | 0.1 | 4.2 | ||||||||||||
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2005 | 2004 | 2003 | ||||||||||
Total generation (billions of KWH) | 196 | 188 | 189 | |||||||||
Sources of generation (percent) — | ||||||||||||
Coal | 71 | 69 | 71 | |||||||||
Nuclear | 15 | 16 | 16 | |||||||||
Gas | 11 | 12 | 9 | |||||||||
Hydro | 3 | 3 | 4 | |||||||||
Average cost of fuel per net KWH generated (cents) | 2.39 | 1.89 | 1.67 | |||||||||
Average cost of purchased power per net KWH (cents) | 7.14 | 4.48 | 3.86 |
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Increase (Decrease) | ||||||||||||||||
Amount | from Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in millions) | ||||||||||||||||
Operating revenues | $ | 276 | $ | 12 | $ | (7 | ) | $ | 30 | |||||||
Operation and maintenance | 297 | 12 | 28 | (23 | ) | |||||||||||
Depreciation and amortization | 39 | (2 | ) | (9 | ) | (7 | ) | |||||||||
Taxes other than income taxes | 4 | 1 | 1 | — | ||||||||||||
Total operating expenses | 340 | 11 | 20 | (30 | ) | |||||||||||
Operating income | (64 | ) | 1 | (27 | ) | 60 | ||||||||||
Equity in losses of unconsolidated subsidiaries | (123 | ) | (26 | ) | 3 | (8 | ) | |||||||||
Leveraged lease income | 74 | 4 | 4 | 8 | ||||||||||||
Other income, net | (12 | ) | (5 | ) | (15 | ) | 9 | |||||||||
Interest expenses | 101 | 18 | (21 | ) | 6 | |||||||||||
Income taxes | (304 | ) | (14 | ) | (63 | ) | 23 | |||||||||
Discontinued operations, net of tax | — | (3 | ) | 12 | (12 | ) | ||||||||||
Net income | $ | 78 | $ | (33 | ) | $ | 61 | $ | 28 | |||||||
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. |
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• | Changes in existing income tax regulations or changes in IRS interpretations of existing regulations. | |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which Southern Company or its subsidiaries may be asserted to be a potentially responsible party. | |
• | Identification and evaluation of other potential lawsuits or complaints in which Southern Company or its subsidiaries may be named as a defendant. | |
• | Resolution or progression of existing matters through the legislative process, the court systems, the IRS, or the EPA. |
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Changes in Fair Value | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Contracts beginning of year | $ | 10.5 | $ | 15.8 | ||||
Contracts realized or settled | (106.1 | ) | (58.7 | ) | ||||
New contracts at inception | — | — | ||||||
Changes in valuation techniques | — | — | ||||||
Current period changes (a) | 196.1 | 53.4 | ||||||
Contracts end of year | $ | 100.5 | $ | 10.5 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | 2006 | 2007-2008 | ||||||||||
(in millions) | ||||||||||||
Actively quoted | $ | 101.6 | $ | 67.6 | $ | 34.0 | ||||||
External sources | (1.1 | ) | (1.1 | ) | — | |||||||
Models and other | — | — | — | |||||||||
Contracts end of year | $ | 100.5 | $ | 66.5 | $ | 34.0 | ||||||
Amounts | ||||
(in millions) | ||||
Regulatory liabilities, net | $ | 103.4 | ||
Other comprehensive income | (0.3 | ) | ||
Net income | (2.6 | ) | ||
Total fair value | $ | 100.5 | ||
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2007- | 2009- | After | ||||||||||||||||||
2006 | 2008 | 2010 | 2010 | Total | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Long-term debt(a) – | ||||||||||||||||||||
Principal | $ | 901 | $ | 1,966 | $ | 834 | $ | — | $ | 3,701 | ||||||||||
Interest | 688 | 1,246 | 1,108 | 9,752 | 12,794 | |||||||||||||||
Other derivative obligations(b) – | ||||||||||||||||||||
Commodity | 32 | — | — | — | 32 | |||||||||||||||
Preferred and preference stock dividends(c) | 33 | 65 | 65 | — | 163 | |||||||||||||||
Operating leases | 123 | 205 | 156 | 259 | 743 | |||||||||||||||
Purchase commitments(d) – | ||||||||||||||||||||
Capital(e) | 2,772 | 6,673 | — | — | 9,445 | |||||||||||||||
Coal | 3,129 | 3,959 | 1,558 | 364 | 9,010 | |||||||||||||||
Nuclear fuel | 63 | 62 | 34 | 89 | 248 | |||||||||||||||
Natural gas(f) | 1,495 | 1,286 | 740 | 3,046 | 6,567 | |||||||||||||||
Purchased power | 175 | 356 | 305 | 541 | 1,377 | |||||||||||||||
Long-term service agreements | 71 | 175 | 180 | 1,334 | 1,760 | |||||||||||||||
Trusts – | ||||||||||||||||||||
Nuclear decommissioning | 7 | 14 | 14 | 117 | 152 | |||||||||||||||
Postretirement benefits(g) | 45 | 88 | — | — | 133 | |||||||||||||||
DOE | 9 | — | — | — | 9 | |||||||||||||||
Total | $ | 9,543 | $ | 16,095 | $ | 4,994 | $ | 15,502 | $ | 46,134 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. Southern Company and its subsidiaries plan to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. Fixed rates include, where applicable, the effects of interest rate derivatives employed to manage interest rate risk. | |
(b) | For additional information, see Notes 1 and 6 to the financial statements. | |
(c) | Preferred and preference stock do not mature; therefore, amounts are provided for the next five years only. | |
(d) | Southern Company generally does not enter into non-cancelable commitments for other operation and maintenance expenditures. Total other operation and maintenance expenses for 2005, 2004, and 2003 were $3.5 billion, $3.3 billion, and $3.2 billion, respectively. | |
(e) | Southern Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures excluding those amounts related to contractual purchase commitments for uranium and nuclear fuel conversion, enrichment, and fabrication services. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(f) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(g) | Southern Company forecasts postretirement trust contributions over a three-year period. No contributions related to Southern Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from Southern Company’s corporate assets. |
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Southern Company and Subsidiary Companies 2005 Annual Report
• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax, and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; | |
• | current and future litigation, regulatory investigations, proceedings, or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, FERC matters, IRS audits, and Mirant matters; | |
• | the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company’s subsidiaries operate; | |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population, and business growth (and declines); | |
• | available sources and costs of fuels; | |
• | ability to control costs; | |
• | investment performance of Southern Company’s employee benefit plans; | |
• | advances in technology; | |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; | |
• | the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; | |
• | internal restructuring or other restructuring options that may be pursued; | |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; | |
• | the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due; | |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; | |
• | the direct or indirect effect on Southern Company’s business resulting from terrorist incidents and the threat of terrorist incidents; | |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company’s and its subsidiaries’ credit ratings; | |
• | the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; | |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, or other similar occurrences; | |
• | the direct or indirect effects on Southern Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; | |
• | the effect of accounting pronouncements issued periodically by standard setting bodies; and | |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by Southern Company from time to time with the Securities and Exchange Commission. |
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For the Years Ended December 31, 2005, 2004, and 2003
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 11,165 | $ | 9,732 | $ | 8,875 | ||||||
Sales for resale | 1,667 | 1,341 | 1,358 | |||||||||
Other electric revenues | 446 | 392 | 514 | |||||||||
Other revenues | 276 | 264 | 271 | |||||||||
Total operating revenues | 13,554 | 11,729 | 11,018 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 4,495 | 3,399 | 2,999 | |||||||||
Purchased power | 731 | 643 | 473 | |||||||||
Other operations | 2,394 | 2,263 | 2,177 | |||||||||
Maintenance | 1,116 | 1,027 | 937 | |||||||||
Depreciation and amortization | 1,176 | 949 | 1,022 | |||||||||
Taxes other than income taxes | 680 | 627 | 586 | |||||||||
Total operating expenses | 10,592 | 8,908 | 8,194 | |||||||||
Operating Income | 2,962 | 2,821 | 2,824 | |||||||||
Other Income and (Expense): | ||||||||||||
Allowance for equity funds used during construction | 51 | 47 | 25 | |||||||||
Interest income | 36 | 27 | 36 | |||||||||
Equity in losses of unconsolidated subsidiaries | (119 | ) | (95 | ) | (99 | ) | ||||||
Leveraged lease income | 74 | 70 | 66 | |||||||||
Interest expense, net of amounts capitalized | (619 | ) | (540 | ) | (527 | ) | ||||||
Interest expense to affiliate trusts | (128 | ) | (100 | ) | — | |||||||
Distributions on mandatorily redeemable preferred securities | — | (27 | ) | (151 | ) | |||||||
Preferred dividends of subsidiaries | (30 | ) | (30 | ) | (21 | ) | ||||||
Other income (expense), net | (41 | ) | (59 | ) | (52 | ) | ||||||
Total other income and (expense) | (776 | ) | (707 | ) | (723 | ) | ||||||
Earnings From Continuing Operations Before Income Taxes | 2,186 | 2,114 | 2,101 | |||||||||
Income taxes | 595 | 585 | 618 | |||||||||
Earnings From Continuing Operations | 1,591 | 1,529 | 1,483 | |||||||||
Earnings from discontinued operations, net of income taxes of $-, $2, and $(6) for 2005, 2004, and 2003, respectively | — | 3 | (9 | ) | ||||||||
Consolidated Net Income | $ | 1,591 | $ | 1,532 | $ | 1,474 | ||||||
Common Stock Data: | ||||||||||||
Earnings per share from continuing operations— | ||||||||||||
Basic | $ | 2.14 | $ | 2.07 | $ | 2.04 | ||||||
Diluted | 2.13 | 2.06 | 2.03 | |||||||||
Earnings per share including discontinued operations— | ||||||||||||
Basic | $ | 2.14 | $ | 2.07 | $ | 2.03 | ||||||
Diluted | 2.13 | 2.06 | 2.02 | |||||||||
Average number of shares of common stock outstanding — (in millions) | ||||||||||||
Basic | 744 | 739 | 727 | |||||||||
Diluted | 749 | 743 | 732 | |||||||||
Cash dividends paid per share of common stock | $ | 1.475 | $ | 1.415 | $ | 1.385 | ||||||
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At December 31, 2005 and 2004
Southern Company and Subsidiary Companies 2005 Annual Report
Assets | 2005 | 2004 | ||||||
(in millions) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 202 | $ | 368 | ||||
Receivables — | ||||||||
Customer accounts receivable | 868 | 697 | ||||||
Unbilled revenues | 304 | 304 | ||||||
Under recovered regulatory clause revenues | 770 | 532 | ||||||
Other accounts and notes receivable | 410 | 310 | ||||||
Accumulated provision for uncollectible accounts | (38 | ) | (33 | ) | ||||
Fossil fuel stock, at average cost | 398 | 308 | ||||||
Vacation pay | 109 | 105 | ||||||
Materials and supplies, at average cost | 671 | 602 | ||||||
Assets from risk management activities | 125 | 38 | ||||||
Prepaid expenses | 130 | 126 | ||||||
Other | 256 | 134 | ||||||
Total current assets | 4,205 | 3,491 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 43,578 | 41,425 | ||||||
Less accumulated depreciation | 15,727 | 14,947 | ||||||
27,851 | 26,478 | |||||||
Nuclear fuel, at amortized cost | 262 | 218 | ||||||
Construction work in progress | 1,367 | 1,662 | ||||||
Total property, plant, and equipment | 29,480 | 28,358 | ||||||
Other Property and Investments: | ||||||||
Nuclear decommissioning trusts, at fair value | 954 | 905 | ||||||
Leveraged leases | 1,082 | 976 | ||||||
Other | 337 | 366 | ||||||
Total other property and investments | 2,373 | 2,247 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 937 | 864 | ||||||
Prepaid pension costs | 1,022 | 986 | ||||||
Unamortized debt issuance expense | 162 | 153 | ||||||
Unamortized loss on reacquired debt | 309 | 323 | ||||||
Deferred under recovered regulatory clause revenues | 531 | — | ||||||
Other regulatory assets | 525 | 253 | ||||||
Other | 333 | 280 | ||||||
Total deferred charges and other assets | 3,819 | 2,859 | ||||||
Total Assets | $ | 39,877 | $ | 36,955 | ||||
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At December 31, 2005 and 2004
Southern Company and Subsidiary Companies 2005 Annual Report
Liabilities and Stockholders’ Equity | 2005 | 2004 | ||||||
(in millions) | ||||||||
Current Liabilities: | ||||||||
Securities due within one year | $ | 901 | $ | 983 | ||||
Notes payable | 1,258 | 426 | ||||||
Accounts payable | 1,229 | 877 | ||||||
Customer deposits | 220 | 199 | ||||||
Accrued taxes — | ||||||||
Income taxes | 104 | 47 | ||||||
Other | 319 | 242 | ||||||
Accrued interest | 204 | 179 | ||||||
Accrued vacation pay | 144 | 137 | ||||||
Accrued compensation | 459 | 424 | ||||||
Other | 402 | 284 | ||||||
Total current liabilities | 5,240 | 3,798 | ||||||
Long-term Debt(See accompanying statements) | 10,958 | 10,488 | ||||||
Long-term Debt Payable to Affiliated Trusts(See accompanying statements) | 1,888 | 1,961 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 5,736 | 5,243 | ||||||
Deferred credits related to income taxes | 311 | 373 | ||||||
Accumulated deferred investment tax credits | 527 | 552 | ||||||
Employee benefit obligations | 930 | 864 | ||||||
Asset retirement obligations | 1,117 | 903 | ||||||
Other cost of removal obligations | 1,295 | 1,296 | ||||||
Other regulatory liabilities | 323 | 328 | ||||||
Other | 267 | 310 | ||||||
Total deferred credits and other liabilities | 10,506 | 9,869 | ||||||
Total Liabilities | 28,592 | 26,116 | ||||||
Preferred and Preference Stock of Subsidiaries(See accompanying statements) | 596 | 561 | ||||||
Common Stockholders’ Equity(See accompanying statements) | 10,689 | 10,278 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 39,877 | $ | 36,955 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Operating Activities: | ||||||||||||
Consolidated net income | $ | 1,591 | $ | 1,532 | $ | 1,474 | ||||||
Adjustments to reconcile consolidated net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 1,398 | 1,161 | 1,281 | |||||||||
Deferred income taxes and investment tax credits | 499 | 559 | 427 | |||||||||
Storm damage accounting order | 48 | — | — | |||||||||
Allowance for equity funds used during construction | (51 | ) | (47 | ) | (25 | ) | ||||||
Equity in losses of unconsolidated subsidiaries | 119 | 95 | 99 | |||||||||
Leveraged lease income | (74 | ) | (70 | ) | (66 | ) | ||||||
Pension, postretirement, and other employee benefits | (6 | ) | (22 | ) | (40 | ) | ||||||
Tax benefit of stock options | 50 | 31 | 30 | |||||||||
Hedge settlements | (19 | ) | (10 | ) | (116 | ) | ||||||
Other, net | (22 | ) | 37 | 32 | ||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (1,045 | ) | (392 | ) | (11 | ) | ||||||
Fossil fuel stock | (110 | ) | (8 | ) | (17 | ) | ||||||
Materials and supplies | (78 | ) | (31 | ) | (12 | ) | ||||||
Other current assets | (1 | ) | 9 | 26 | ||||||||
Accounts payable | 71 | 29 | (88 | ) | ||||||||
Accrued taxes | 28 | (109 | ) | 19 | ||||||||
Accrued compensation | 13 | (23 | ) | (11 | ) | |||||||
Other current liabilities | 119 | (46 | ) | 69 | ||||||||
Net cash provided from operating activities | 2,530 | 2,695 | 3,071 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (2,370 | ) | (2,022 | ) | (1,964 | ) | ||||||
Nuclear decommissioning trust fund purchases | (606 | ) | (810 | ) | (1,007 | ) | ||||||
Nuclear decommissioning trust fund sales | 596 | 781 | 978 | |||||||||
Investment in unconsolidated subsidiaries | (115 | ) | (97 | ) | (94 | ) | ||||||
Cost of removal net of salvage | (128 | ) | (75 | ) | (80 | ) | ||||||
Other | (6 | ) | (35 | ) | (27 | ) | ||||||
Net cash used for investing activities | (2,629 | ) | (2,258 | ) | (2,194 | ) | ||||||
Financing Activities: | ||||||||||||
Increase (decrease) in notes payable, net | 831 | (141 | ) | (366 | ) | |||||||
Proceeds — | ||||||||||||
Long-term debt | 1,608 | 1,861 | 3,494 | |||||||||
Mandatorily redeemable preferred securities | — | 200 | — | |||||||||
Preferred and preference stock | 55 | 175 | 125 | |||||||||
Common stock | 213 | 124 | 470 | |||||||||
Redemptions — | ||||||||||||
Long-term debt | (1,285 | ) | (1,246 | ) | (3,009 | ) | ||||||
Mandatorily redeemable preferred securities | — | (240 | ) | (480 | ) | |||||||
Preferred and preference stock | (4 | ) | (28 | ) | — | |||||||
Common stock repurchased | (352 | ) | — | — | ||||||||
Payment of common stock dividends | (1,098 | ) | (1,045 | ) | (1,004 | ) | ||||||
Other | (35 | ) | (40 | ) | (69 | ) | ||||||
Net cash (used for) provided from financing activities | (67 | ) | (380 | ) | (839 | ) | ||||||
Net Change in Cash and Cash Equivalents | (166 | ) | 57 | 38 | ||||||||
Cash and Cash Equivalents at Beginning of Year | 368 | 311 | 273 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 202 | $ | 368 | $ | 311 | ||||||
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At December 31, 2005 and 2004
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(in millions) | (percent of total) | |||||||||||||||||
Long-Term Debt of Subsidiaries: | ||||||||||||||||||
First mortgage bonds — | ||||||||||||||||||
Maturity | Interest Rates | |||||||||||||||||
2006 | 6.50% to 6.90% | $ | 45 | $ | 45 | |||||||||||||
2025 through 2026 | 6.88% to 7.45% | — | 60 | |||||||||||||||
Total first mortgage bonds | 45 | 105 | ||||||||||||||||
Long-term senior notes and debt — | ||||||||||||||||||
Maturity | Interest Rates | |||||||||||||||||
2005 | 5.49% to 5.50% | — | 379 | |||||||||||||||
2006 | 2.65% to 6.20% | 674 | 674 | |||||||||||||||
2007 | 3.50% to 7.13% | 1,207 | 1,220 | |||||||||||||||
2008 | 2.54% to 6.55% | 461 | 462 | |||||||||||||||
2009 | 4.10% to 7.00% | 128 | 169 | |||||||||||||||
2010 | 4.70% | 102 | 102 | |||||||||||||||
2011 through 2044 | 4.00% to 8.12% | 5,637 | 4,433 | |||||||||||||||
Adjustable rates (at 1/1/06): | ||||||||||||||||||
2005 | 1.66% to 3.63% | — | 563 | |||||||||||||||
2006 | 2.11% | 27 | 195 | |||||||||||||||
2007 | 2.11% to 5.755 | 265 | 90 | |||||||||||||||
2009 | 4.53% to 4.64% | 440 | 440 | |||||||||||||||
2010 | 5.41% | 154 | — | |||||||||||||||
Total long-term senior notes and debt | 9,095 | 8,727 | ||||||||||||||||
Other long-term debt — | ||||||||||||||||||
Pollution control revenue bonds — | ||||||||||||||||||
Maturity | Interest Rates | |||||||||||||||||
Collateralized: | ||||||||||||||||||
2006 | 5.25% | 12 | 12 | |||||||||||||||
2024 | 5.50% | 3 | 24 | |||||||||||||||
Variable rates (at 1/1/06): | ||||||||||||||||||
2015 through 2017 | 2.01% to 2.16% | 90 | 90 | |||||||||||||||
Non-collateralized: | ||||||||||||||||||
2012 through 2034 | 2.83% to 5.45% | 850 | 850 | |||||||||||||||
Variable rates (at 1/1/06): | ||||||||||||||||||
2011 through 2038 | 2.01% to 3.87% | 1,586 | 1,565 | |||||||||||||||
Total other long-term debt | 2,541 | 2,541 | ||||||||||||||||
Capitalized lease obligations | 110 | 115 | ||||||||||||||||
Unamortized debt (discount), net | (19 | ) | (17 | ) | ||||||||||||||
Total long-term debt (annual interest requirement — $561 million) | 11,772 | 11,471 | ||||||||||||||||
Less amount due within one year | 814 | 983 | ||||||||||||||||
Long-term debt excluding amount due within one year | 10,958 | 10,488 | 45.4 | % | 45.1 | % | ||||||||||||
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At December 31, 2005 and 2004
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in millions) | (percent of total) | |||||||||||||||
Long-term Debt Payable to Affiliated Trusts: | ||||||||||||||||
Maturity Interest Rates | ||||||||||||||||
2027 through 2044 4.75% to 8.19% | ||||||||||||||||
(annual interest requirement — $128 million) | 1,960 | 1,961 | ||||||||||||||
Less amount due within one year | 72 | — | ||||||||||||||
Total long-term debt payable to affiliated trusts excluding amount due within one year | 1,888 | 1,961 | 7.8 | 8.4 | ||||||||||||
Preferred and Preference Stock of Subsidiaries: | ||||||||||||||||
Cumulative preferred stock | ||||||||||||||||
$100 par or stated value — 4.20% to 5.44% | ||||||||||||||||
Authorized — 20 million shares | ||||||||||||||||
Outstanding — 1 million shares | 96 | 100 | ||||||||||||||
$1 par value — 4.95% to 5.83% | ||||||||||||||||
Authorized — 28 million shares | ||||||||||||||||
Outstanding — 12 million shares: $25 stated value | 294 | 294 | ||||||||||||||
Outstanding — 1,250 shares: $100,000 stated value | 123 | 123 | ||||||||||||||
Non-cumulative preferred stock | ||||||||||||||||
$25 par or stated value — 6.00% | ||||||||||||||||
Authorized — 4 million shares | ||||||||||||||||
Outstanding — 2 million shares | 44 | 44 | ||||||||||||||
Non-cumulative preference stock | ||||||||||||||||
$100 par or stated value — 6.00% | ||||||||||||||||
Authorized — 10 million shares | ||||||||||||||||
Outstanding — 1 million shares | 54 | — | ||||||||||||||
Total preferred and preference stock of subsidiaries | ||||||||||||||||
(annual dividend requirement — $33 million) | 611 | 561 | ||||||||||||||
Less amount due within one year | 15 | — | ||||||||||||||
Preferred and preference stock of subsidiaries excluding amount due within one year | 596 | 561 | 2.5 | 2.4 | ||||||||||||
Common Stockholders’ Equity: | ||||||||||||||||
Common stock, par value $5 per share — | 3,759 | 3,709 | ||||||||||||||
Authorized — 1 billion shares | ||||||||||||||||
Issued — 2005: 752 million shares | ||||||||||||||||
— 2004: 742 million shares | ||||||||||||||||
Treasury — 2005: 10.4 million shares | ||||||||||||||||
— 2004: 0.2 million shares | ||||||||||||||||
Paid-in capital | 1,085 | 869 | ||||||||||||||
Treasury, at cost | (359 | ) | (6 | ) | ||||||||||||
Retained earnings | 6,332 | 5,839 | ||||||||||||||
Accumulated other comprehensive income (loss) | (128 | ) | (133 | ) | ||||||||||||
Total common stockholders’ equity | 10,689 | 10,278 | 44.3 | 44.1 | ||||||||||||
Total Capitalization | $ | 24,131 | $ | 23,288 | 100.0 | % | 100.0 | % | ||||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Southern Company and Subsidiary Companies 2005 Annual Report
Accumulated | ||||||||||||||||||||||||||||
Other Comprehensive | ||||||||||||||||||||||||||||
Common Stock | Income (Loss) | |||||||||||||||||||||||||||
Par | Paid-In | Retained | Continuing | Discontinued | ||||||||||||||||||||||||
Value | Capital | Treasury | Earnings | Operations | Operations | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Balance at December 31, 2002 | $ | 3,583 | $ | 338 | $ | (3 | ) | $ | 4,874 | $ | (95 | ) | $ | 13 | $ | 8,710 | ||||||||||||
Net income | — | — | — | 1,474 | — | — | 1,474 | |||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | (20 | ) | (11 | ) | (31 | ) | ||||||||||||||||||
Stock issued | 92 | 408 | — | — | — | — | 500 | |||||||||||||||||||||
Cash dividends | — | — | — | (1,004 | ) | — | — | (1,004 | ) | |||||||||||||||||||
Other | — | 1 | (1 | ) | (1 | ) | — | — | (1 | ) | ||||||||||||||||||
Balance at December 31, 2003 | 3,675 | 747 | (4 | ) | 5,343 | (115 | ) | 2 | 9,648 | |||||||||||||||||||
Net income | — | — | — | 1,532 | — | — | 1,532 | |||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | (16 | ) | (4 | ) | (20 | ) | ||||||||||||||||||
Stock issued | 34 | 122 | — | — | — | — | 156 | |||||||||||||||||||||
Cash dividends | — | — | — | (1,044 | ) | — | — | (1,044 | ) | |||||||||||||||||||
Other | — | — | (2 | ) | 8 | — | — | 6 | ||||||||||||||||||||
Balance at December 31, 2004 | 3,709 | 869 | (6 | ) | 5,839 | (131 | ) | (2 | ) | 10,278 | ||||||||||||||||||
Net income | — | — | — | 1,591 | — | — | 1,591 | |||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | 3 | 2 | 5 | |||||||||||||||||||||
Stock issued | 50 | 216 | — | — | — | — | 266 | |||||||||||||||||||||
Stock repurchased, at cost | — | — | (352 | ) | — | — | — | (352 | ) | |||||||||||||||||||
Cash dividends | — | — | — | (1,098 | ) | — | — | (1,098 | ) | |||||||||||||||||||
Other | — | — | (1 | ) | — | — | — | (1 | ) | |||||||||||||||||||
Balance at December 31, 2005 | $ | 3,759 | $ | 1,085 | $ | (359 | ) | $ | 6,332 | $ | (128 | ) | $ | — | $ | 10,689 | ||||||||||||
For the Years Ended December 31, 2005, 2004, and 2003
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Consolidated Net Income | $ | 1,591 | $ | 1,532 | $ | 1,474 | ||||||
Other comprehensive income (loss) — continuing operations: | ||||||||||||
Change in additional minimum pension liability, net of tax of $(6), $(11), and $(11), respectively | (11 | ) | (20 | ) | (17 | ) | ||||||
Change in fair value of marketable securities, net of tax of $(2) and $4, respectively | (4 | ) | 6 | — | ||||||||
Changes in fair value of qualifying hedges, net of tax of $7, $(11), and $(12), respectively | 12 | (16 | ) | (20 | ) | |||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $4, $8, and $9, respectively | 6 | 14 | 17 | |||||||||
Total other comprehensive income (loss) — continuing operations | 3 | (16 | ) | (20 | ) | |||||||
Other comprehensive income (loss) — discontinued operations: | ||||||||||||
Changes in fair value of qualifying hedges, net of tax of $4, $(1), and $10, respectively | 6 | (2 | ) | 3 | ||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $(3), $(1), and $(8), respectively | (4 | ) | (2 | ) | (14 | ) | ||||||
Total other comprehensive income (loss) — discontinued operations | 2 | (4 | ) | (11 | ) | |||||||
Consolidated Comprehensive Income | $ | 1,596 | $ | 1,512 | $ | 1,443 | ||||||
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Southern Company and Subsidiary Companies 2005 Annual Report
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Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | Note | ||||||||||
(in millions) | ||||||||||||
Deferred income tax charges | $ | 937 | $ | 865 | (a | ) | ||||||
Asset retirement obligations — asset. | 81 | 7 | (a | ) | ||||||||
Asset retirement obligations — liab. | (139 | ) | (180 | ) | (a | ) | ||||||
Other cost of removal obligations | (1,295 | ) | (1,296 | ) | (a | ) | ||||||
Deferred income tax credits | (313 | ) | (374 | ) | (a | ) | ||||||
Loss on reacquired debt | 309 | 323 | (b | ) | ||||||||
Vacation pay | 109 | 105 | (c | ) | ||||||||
Building lease | 52 | 53 | (d | ) | ||||||||
Generating plant outage costs — asset | 54 | 49 | (d | ) | ||||||||
Storm damage — asset | 366 | 97 | (d | ) | ||||||||
Fuel hedging | (116 | ) | (27 | ) | (d | ) | ||||||
Other assets | 139 | 115 | (d | ) | ||||||||
Environmental remediation — asset | 58 | 59 | (d | ) | ||||||||
Environmental remediation — liab. | (36 | ) | (47 | ) | (d | ) | ||||||
Deferred purchased power | (52 | ) | (19 | ) | (d | ) | ||||||
Other liabilities | (32 | ) | (26 | ) | (d | ) | ||||||
Plant Daniel capacity | (19 | ) | (44 | ) | (e | ) | ||||||
Total | $ | 103 | $ | (340 | ) | |||||||
Note: | The recovery and amortization periods for these regulatory assets and (liabilities) are as follows: | |
(a) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered, and deferred tax liabilities are amortized over the related property lives, which may range up to 60 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(b) | 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. | |
(c) | Recorded as earned by employees and recovered as paid, generally within one year. | |
(d) | Recorded and recovered or amortized as approved by the appropriate state PSCs. | |
(e) | Amortized over four-year period ending in 2007. |
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2005 | 2004 | |||||||
Generation | $ | 22,490 | $ | 21,262 | ||||
Transmission | 6,031 | 5,770 | ||||||
Distribution | 11,894 | 11,368 | ||||||
General | 2,393 | 2,268 | ||||||
Plant acquisition adjustment | 41 | 42 | ||||||
Utility plant in service | 42,849 | 40,710 | ||||||
IT equipment and software | 211 | 214 | ||||||
Communications equipment | 431 | 404 | ||||||
Other | 87 | 97 | ||||||
Other plant in service | 729 | 715 | ||||||
Total plant in service | $ | 43,578 | $ | 41,425 | ||||
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and Other Costs of Removal
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2005 | 2004 | |||||||
(in millions) | ||||||||
Balance beginning of year | $ | 903 | $ | 845 | ||||
Liabilities incurred | 155 | — | ||||||
Liabilities settled | (2 | ) | (3 | ) | ||||
Accretion | 61 | 57 | ||||||
Cash flow revisions | — | 4 | ||||||
Balance end of year | $ | 1,117 | $ | 903 | ||||
Unrealized | Unrealized | Fair | ||||||||||
2005 | Gains | Losses | Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 155.6 | $ | (14.0 | ) | $ | 600.8 | |||||
Debt | 4.1 | (2.4 | ) | 241.4 | ||||||||
Other | 17.0 | — | 111.4 | |||||||||
Total | $ | 176.7 | $ | (16.4 | ) | $ | 953.6 | |||||
Unrealized | Unrealized | Fair | ||||||||||
2004 | Gains | Losses | Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 140.0 | $ | (8.3 | ) | $ | 566.3 | |||||
Debt | 8.5 | (0.7 | ) | 233.5 | ||||||||
Other | 13.6 | (0.2 | ) | 105.0 | ||||||||
Total | $ | 162.1 | $ | (9.2 | ) | $ | 904.8 | |||||
Plant | Plant | Plant | ||||||||||
Farley | Hatch | Vogtle | ||||||||||
(in millions) | ||||||||||||
External trust funds, at fair value | $ | 467 | $ | 313 | $ | 174 | ||||||
Internal reserves | 28 | — | 1 | |||||||||
Total | $ | 495 | $ | 313 | $ | 175 | ||||||
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Plant | Plant | Plant | ||||||||||
Farley | Hatch | Vogtle | ||||||||||
Decommissioning periods: | ||||||||||||
Beginning year | 2017 | 2034 | 2027 | |||||||||
Completion year | 2046 | 2065 | 2048 | |||||||||
(in millions) | ||||||||||||
Site study costs: | ||||||||||||
Radiated structures | $ | 892 | $ | 497 | $ | 452 | ||||||
Non-radiated structures | 63 | 49 | 58 | |||||||||
Total | $ | 955 | $ | 546 | $ | 510 | ||||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Net rentals receivable | $ | 509 | $ | 457 | ||||
Unearned income | (280 | ) | (283 | ) | ||||
Investment in leveraged leases | 229 | 174 | ||||||
Deferred taxes arising from leveraged leases | (59 | ) | (32 | ) | ||||
Net investment in leveraged leases | $ | 170 | $ | 142 | ||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Pretax leveraged lease income | $ | 23 | $ | 17 | $ | 11 | ||||||
Income tax expense | (11 | ) | (8 | ) | (4 | ) | ||||||
Net leveraged lease income | $ | 12 | $ | 9 | $ | 7 | ||||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Net rentals receivable | $ | 1,298 | $ | 1,298 | ||||
Unearned income | (445 | ) | (496 | ) | ||||
Investment in leveraged leases | 853 | 802 | ||||||
Deferred taxes arising from leveraged leases | (351 | ) | (360 | ) | ||||
Net investment in leveraged leases | $ | 502 | $ | 442 | ||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Pretax leveraged lease income | $ | 51 | $ | 53 | $ | 55 | ||||||
Income tax expense | (18 | ) | (19 | ) | (19 | ) | ||||||
Net leveraged lease income | $ | 33 | $ | 34 | $ | 36 | ||||||
As | Options | Pro | ||||||||||
Reported | Impact | Forma | ||||||||||
2005 | ||||||||||||
Net income (in millions) | $ | 1,591 | $ | (17 | ) | $ | 1,574 | |||||
Earnings per share (dollars): | ||||||||||||
Basic | $ | 2.14 | $ | (0.02 | ) | $ | 2.12 | |||||
Diluted | $ | 2.13 | $ | (0.03 | ) | $ | 2.10 | |||||
2004 | ||||||||||||
Net income (in millions) | $ | 1,529 | $ | (16 | ) | $ | 1,513 | |||||
Earnings per share (dollars): | ||||||||||||
Basic | $ | 2.07 | $ | (0.02 | ) | $ | 2.05 | |||||
Diluted | $ | 2.06 | $ | (0.02 | ) | $ | 2.04 | |||||
2003 | ||||||||||||
Net income (in millions) | $ | 1,483 | $ | (17 | ) | $ | 1,466 | |||||
Earnings per share (dollars): | ||||||||||||
Basic | $ | 2.04 | $ | (0.02 | ) | $ | 2.02 | |||||
Diluted | $ | 2.03 | $ | (0.03 | ) | $ | 2.00 |
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.9 | % | 3.1 | % | 2.7 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.9 | % | 19.6 | % | 23.6 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 |
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Carrying | Fair | |||||||
Amount | Value | |||||||
(in millions) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 13,623 | $ | 13,633 | ||||
2004 | 13,317 | 13,560 |
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Projected | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 5,075 | $ | 4,573 | ||||
Service cost | 138 | 128 | ||||||
Interest cost | 286 | 270 | ||||||
Benefits paid | (214 | ) | (207 | ) | ||||
Plan amendments | 32 | 6 | ||||||
Actuarial (gain) loss | 240 | 305 | ||||||
Balance at end of year | $ | 5,557 | $ | 5,075 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 5,476 | $ | 5,159 | ||||
Actual return on plan assets | 866 | 501 | ||||||
Employer contributions | 19 | 23 | ||||||
Benefits paid | (214 | ) | (207 | ) | ||||
Balance at end of year | $ | 6,147 | $ | 5,476 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Funded status | $ | 590 | $ | 401 | ||||
Unrecognized transition amount | (6 | ) | (14 | ) | ||||
Unrecognized prior service cost | 293 | 292 | ||||||
Unrecognized net (gain) loss | 3 | 185 | ||||||
Prepaid pension asset, net | $ | 880 | $ | 864 | ||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Prepaid pension asset | $ | 1,022 | $ | 986 | ||||
Employee benefit obligations | (310 | ) | (280 | ) | ||||
Other property and investments | 43 | 50 | ||||||
Accumulated other comprehensive income | 125 | 108 | ||||||
Prepaid pension asset, net | $ | 880 | $ | 864 | ||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 138 | $ | 128 | $ | 115 | ||||||
Interest cost | 286 | 269 | 261 | |||||||||
Expected return on plan assets | (456 | ) | (452 | ) | (450 | ) | ||||||
Recognized net gain | 10 | (7 | ) | (42 | ) | |||||||
Net amortization | 24 | 18 | 17 | |||||||||
Net pension cost (income) | $ | 2 | $ | (44 | ) | $ | (99 | ) | ||||
(in millions) | ||||
2006 | $ | 222 | ||
2007 | 230 | |||
2008 | 238 | |||
2009 | 248 | |||
2010 | 262 | |||
2011 to 2015 | 1,596 | |||
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Accumulated | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 1,712 | $ | 1,655 | ||||
Service cost | 28 | 27 | ||||||
Interest cost | 96 | 93 | ||||||
Benefits paid | (78 | ) | (68 | ) | ||||
Actuarial (gain) loss | 68 | 72 | ||||||
Plan amendments | — | (67 | ) | |||||
Balance at end of year | $ | 1,826 | $ | 1,712 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 592 | $ | 522 | ||||
Actual return on plan assets | 78 | 64 | ||||||
Employer contributions | 92 | 74 | ||||||
Benefits paid | (78 | ) | (68 | ) | ||||
Balance at end of year | $ | 684 | $ | 592 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 44 | % | 46 | % | 43 | % | ||||||
International equity | 17 | 18 | 18 | |||||||||
Fixed income | 29 | 29 | 32 | |||||||||
Real estate | 6 | 5 | 4 | |||||||||
Private equity | 4 | 2 | 3 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||||||
(in millions) | ||||||||||||
Funded status | $ | (1,142 | ) | $ | (1,120 | ) | ||||||
Unrecognized transition obligation | 114 | 129 | ||||||||||
Unrecognized prior service cost | 121 | 130 | ||||||||||
Unrecognized net loss (gain) | 428 | 408 | ||||||||||
Fourth quarter contributions | 40 | 30 | ||||||||||
Accrued liability recognized in the balance sheets | $ | (439 | ) | $ | (423 | ) | ||||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 28 | $ | 28 | $ | 25 | ||||||
Interest cost | 97 | 93 | 93 | |||||||||
Expected return on plan assets | (45 | ) | (50 | ) | (47 | ) | ||||||
Net amortization | 38 | 35 | 30 | |||||||||
Net postretirement cost | $ | 118 | $ | 106 | $ | 101 | ||||||
Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in millions) | ||||||||||||
2006 | $ | 86 | $ | (7 | ) | $ | 79 | |||||
2007 | 92 | (9 | ) | 83 | ||||||||
2008 | 100 | (10 | ) | 90 | ||||||||
2009 | 110 | (11 | ) | 99 | ||||||||
2010 | 119 | (12 | ) | 107 | ||||||||
2011 to 2015 | 668 | (88 | ) | 580 | ||||||||
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2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | 3.50 | 3.75 | |||||||||
Long-term return on plan assets | 8.50 | 8.50 | 8.50 | |||||||||
1 Percent | 1 Percent | |||||||
Increase | Decrease | |||||||
(in millions) | ||||||||
Benefit obligation | $ | 149 | $ | 132 | ||||
Service and interest costs | 10 | 9 | ||||||
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Jointly Owned Facilities | ||||||||||||
Percent | Amount of | Accumulated | ||||||||||
Ownership | Investment | Depreciation | ||||||||||
(in millions) | ||||||||||||
Plant Vogtle (nuclear) | 45.7 | % | $ | 3,311 | $ | 1,809 | ||||||
Plant Hatch (nuclear) | 50.1 | 935 | 492 | |||||||||
Plant Miller (coal) Units 1 and 2 | 91.8 | 940 | 374 | |||||||||
Plant Scherer (coal) Units 1 and 2 | 8.4 | 115 | 56 | |||||||||
Plant Wansley (coal) | 53.5 | 395 | 172 | |||||||||
Rocky Mountain (pumped storage) | 25.4 | 169 | 92 | |||||||||
Intercession City (combustion turbine) | 33.3 | 12 | 2 | |||||||||
Plant Stanton (combined cycle) Unit A | 65.0 | 156 | 10 |
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Total provision for income taxes: | ||||||||||||
Federal — | ||||||||||||
Current | $ | 61 | $ | 14 | $ | 141 | ||||||
Deferred | 419 | 482 | 393 | |||||||||
480 | 496 | 534 | ||||||||||
State — | ||||||||||||
Current | 35 | 15 | 44 | |||||||||
Deferred | 80 | 76 | 34 | |||||||||
115 | 91 | 78 | ||||||||||
Total | $ | 595 | $ | 587 | $ | 612 | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 4,613 | $ | 4,290 | ||||
Property basis differences | 1,008 | 1,009 | ||||||
Leveraged lease basis differences | 519 | 447 | ||||||
Employee benefit obligations | 333 | 307 | ||||||
Under recovered fuel clause | 528 | 210 | ||||||
Premium on reacquired debt | 126 | 132 | ||||||
Storm reserve | 68 | 47 | ||||||
Other | 155 | 133 | ||||||
Total | 7,350 | 6,575 | ||||||
Deferred tax assets: | ||||||||
Federal effect of state deferred taxes | 263 | 243 | ||||||
State effect of federal deferred taxes | 88 | 111 | ||||||
Employee benefit obligations | 210 | 177 | ||||||
Other property basis differences | 148 | 157 | ||||||
Deferred costs | 126 | 105 | ||||||
Unbilled revenue | 58 | 61 | ||||||
Other comprehensive losses | 96 | 94 | ||||||
Alternative minimum tax carryforward | 202 | 106 | ||||||
Other | 260 | 233 | ||||||
Total | 1,451 | 1,287 | ||||||
Total deferred tax liabilities, net | 5,899 | 5,288 | ||||||
Portion included in prepaid expenses (accrued income taxes), net | (180 | ) | (57 | ) | ||||
Deferred state tax assets | 17 | 12 | ||||||
Accumulated deferred income taxes in the balance sheets | $ | 5,736 | $ | 5,243 | ||||
2005 | 2004 | 2003 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income tax, net of federal deduction | 3.4 | 2.8 | 2.4 | |||||||||
Synthetic fuel tax credits | (8.0 | ) | (8.5 | ) | (5.7 | ) | ||||||
Employee stock plans dividend deduction | (1.5 | ) | (1.5 | ) | (1.5 | ) | ||||||
Non-deductible book depreciation | 1.1 | 1.1 | 1.1 | |||||||||
Difference in prior years’ deferred and current tax rate | (1.8 | ) | (0.7 | ) | (0.7 | ) | ||||||
Other | (1.4 | ) | (0.9 | ) | (1.5 | ) | ||||||
Effective income tax rate | 26.8 | % | 27.3 | % | 29.1 | % | ||||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Capitalized leases | $ | 13 | $ | 12 | ||||
First mortgage bonds | 45 | — | ||||||
Pollution control bonds | 12 | — | ||||||
Senior notes | 697 | 675 | ||||||
Long-term debt payable to affiliated trusts | 72 | — | ||||||
Other long-term debt | 47 | 296 | ||||||
Preferred stock | 15 | — | ||||||
Total | $ | 901 | $ | 983 | ||||
Expires | ||||||||||||||||
2007 & | ||||||||||||||||
Company | Total | Unused | 2006 | beyond | ||||||||||||
(in millions) | ||||||||||||||||
Alabama Power | $ | 878 | $ | 878 | $ | 428 | $ | 450 | ||||||||
Georgia Power | 780 | 778 | 70 | 710 | ||||||||||||
Gulf Power | 121 | 121 | 121 | — | ||||||||||||
Mississippi Power | 326 | 276 | 101 | 225 | ||||||||||||
Savannah Electric | 80 | 80 | 60 | 20 | ||||||||||||
Southern Company | 750 | 750 | — | 750 | ||||||||||||
Southern Power | 400 | 399 | — | 400 | ||||||||||||
Other | 30 | 30 | 30 | — | ||||||||||||
Total | $ | 3,365 | $ | 3,312 | $ | 810 | $ | 2,555 | ||||||||
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Amounts | ||||
(in millions) | ||||
Regulatory liabilities, net | $ | 103.4 | ||
Other comprehensive income | (0.3 | ) | ||
Net income | (2.6 | ) | ||
Total fair value | $ | 100.5 | ||
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Variable | Fair | |||||||||||||
Rate | Notional | Value | ||||||||||||
Company | Maturity | Paid | Amount | Gain | ||||||||||
(in millions) | ||||||||||||||
Southern Company | ||||||||||||||
2007 | 6-month | $ | 400 | $ | 3.0 | |||||||||
LIBOR - 0.10% |
Weighted Average | Fair | |||||||||||||||||
Fixed | Value | |||||||||||||||||
Rate | Notional | Gain/ | ||||||||||||||||
Company | Maturity | Paid | Amount | (Loss) | ||||||||||||||
(in millions) | ||||||||||||||||||
Alabama Power | ||||||||||||||||||
2007 | 2.01 | %* | $ | 536 | $ | 7.3 | ||||||||||||
2006 | 1.89 | % | 195 | 2.5 | ||||||||||||||
2016 | 4.82 | % | 300 | 3.0 | ||||||||||||||
2016 | 4.42 | % | 300 | 12.5 | ||||||||||||||
Georgia Power | ||||||||||||||||||
2006-2007 | 2.09-3.85 | %** | 400 | 1.2 | ||||||||||||||
2037 | 4.58-5.75 | %*** | 300 | (1.1 | ) | |||||||||||||
2007 | 2.67 | % | 300 | 2.4 | ||||||||||||||
Savannah Electric | ||||||||||||||||||
2007 | 2.50 | %* | 14 | 0.3 | ||||||||||||||
2016 | 4.69 | % | 30 | 0.6 | ||||||||||||||
* | Hedged using the Bond Market Association Municipal Swap Index. | |
** | Series of interest rate caps and collars (showing the lowest floor and highest cap) with variable rates based on one-month LIBOR. | |
*** | Interest rate collar. |
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Commitments | ||||||||||||||||
Natural | Nuclear | Purchased | ||||||||||||||
Gas | Coal | Fuel | Power | |||||||||||||
(in millions) | ||||||||||||||||
2006 | $ | 1,495 | $ | 3,129 | $ | 63 | $ | 175 | ||||||||
2007 | 805 | 2,509 | 39 | 176 | ||||||||||||
2008 | 481 | 1,450 | 23 | 180 | ||||||||||||
2009 | 371 | 864 | 14 | 162 | ||||||||||||
2010 | 369 | 694 | 20 | 143 | ||||||||||||
2011 and thereafter | 3,046 | 364 | 89 | 541 | ||||||||||||
Total | $ | 6,567 | $ | 9,010 | $ | 248 | $ | 1,377 | ||||||||
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Minimum Lease Payments | ||||||||||||||||
Plant | Rail | |||||||||||||||
Daniel | Cars | Other | Total | |||||||||||||
(in millions) | ||||||||||||||||
2006 | $ | 29 | $ | 42 | $ | 52 | $ | 123 | ||||||||
2007 | 29 | 34 | 46 | 109 | ||||||||||||
2008 | 29 | 31 | 36 | 96 | ||||||||||||
2009 | 29 | 24 | 30 | 83 | ||||||||||||
2010 | 28 | 22 | 23 | 73 | ||||||||||||
2011 and thereafter | 28 | 84 | 147 | 259 | ||||||||||||
Total | $ | 172 | $ | 237 | $ | 334 | $ | 743 | ||||||||
years from the date of grant. 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. Activity from 2003 to 2005 for the stock option plan is summarized below:
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Shares | Average | |||||||
Subject | Option Price | |||||||
To Option | Per Share | |||||||
Balance at December 31, 2002 | 32,674,814 | 19.72 | ||||||
Options granted | 7,165,190 | 27.98 | ||||||
Options canceled | (181,381 | ) | 24.37 | |||||
Options exercised | (5,725,336 | ) | 16.56 | |||||
Balance at December 31, 2003 | 33,933,287 | 21.97 | ||||||
Options granted | 7,231,703 | 29.49 | ||||||
Options canceled | (72,794 | ) | 26.85 | |||||
Options exercised | (6,557,690 | ) | 18.11 | |||||
Balance at December 31, 2004 | 34,534,506 | 24.27 | ||||||
Options granted | 6,969,083 | 32.71 | ||||||
Options canceled | (83,366 | ) | 28.01 | |||||
Options exercised | (10,072,868 | ) | 21.17 | |||||
Balance at December 31, 2005 | 31,347,355 | $ | 27.13 | |||||
Shares reserved for future grants: | ||||||||
At December 31, 2003 | 39,751,477 | |||||||
At December 31, 2004 | 32,583,523 | |||||||
At December 31, 2005 | 25,687,333 | |||||||
Options exercisable: | ||||||||
At December 31, 2003 | 18,874,426 | |||||||
At December 31, 2004 | 21,782,064 | |||||||
At December 31, 2005 | 18,535,238 |
Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares (in thousands) | 4,157 | 13,370 | 13,821 | |||||||||
Average remaining life (in years) | 4.2 | 5.9 | 8.2 | |||||||||
Average exercise price | $ | 17.25 | $ | 26.10 | $ | 31.10 | ||||||
Exercisable: | ||||||||||||
Shares (in thousands) | 4,157 | 11,465 | 2,914 | |||||||||
Average exercise price | $ | 17.25 | $ | 25.79 | $ | 29.67 | ||||||
Average Common Stock Shares | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
As reported shares | 743,927 | 738,879 | 726,702 | |||||||||
Effect of options | 4,600 | 4,197 | 5,202 | |||||||||
Diluted shares | 748,527 | 743,076 | 731,904 | |||||||||
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Electric Utilities | ||||||||||||||||||||||||||||
Retail | ||||||||||||||||||||||||||||
Operating | Southern | All | ||||||||||||||||||||||||||
Companies | Power | Eliminations | Total | Other | Eliminations | Consolidated | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2005 | ||||||||||||||||||||||||||||
Operating revenues | $ | 13,156 | $ | 781 | $ | (659 | ) | $ | 13,278 | $ | 393 | $ | (117 | ) | $ | 13,554 | ||||||||||||
Depreciation and amortization | 1,083 | 54 | — | 1,137 | 39 | — | 1,176 | |||||||||||||||||||||
Interest income | 30 | 2 | — | 32 | 5 | (1 | ) | 36 | ||||||||||||||||||||
Interest expense | 567 | 79 | — | 646 | 101 | — | 747 | |||||||||||||||||||||
Income taxes | 827 | 72 | — | 899 | (304 | ) | — | 595 | ||||||||||||||||||||
Segment net income (loss) | 1,398 | 115 | — | 1,513 | 80 | (2 | ) | 1,591 | ||||||||||||||||||||
Total assets | 36,335 | 2,303 | (179 | ) | 38,459 | 1,751 | (333 | ) | 39,877 | |||||||||||||||||||
Gross property additions | 2,177 | 241 | — | 2,418 | 58 | — | 2,476 | |||||||||||||||||||||
Electric Utilities | ||||||||||||||||||||||||||||
Retail | ||||||||||||||||||||||||||||
Operating | Southern | All | ||||||||||||||||||||||||||
Companies | Power | Eliminations | Total | Other | Eliminations | Consolidated | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||
Operating revenues | $ | 11,300 | $ | 701 | $ | (536 | ) | $ | 11,465 | $ | 375 | $ | (111 | ) | $ | 11,729 | ||||||||||||
Depreciation and amortization | 857 | 51 | — | 908 | 41 | — | 949 | |||||||||||||||||||||
Interest income | 24 | 1 | — | 25 | 4 | (2 | ) | 27 | ||||||||||||||||||||
Interest expense | 518 | 66 | — | 584 | 83 | — | 667 | |||||||||||||||||||||
Income taxes | 802 | 73 | — | 875 | (290 | ) | — | 585 | ||||||||||||||||||||
Segment net income (loss) | 1,309 | 112 | — | 1,421 | 109 | 2 | 1,532 | |||||||||||||||||||||
Total assets | 33,517 | 2,067 | (104 | ) | 35,480 | 1,895 | (420 | ) | 36,955 | |||||||||||||||||||
Gross property additions | 2,307 | 116 | (415 | ) | 2,008 | 91 | — | 2,099 | ||||||||||||||||||||
Electric Utilities | ||||||||||||||||||||||||||||
Retail | ||||||||||||||||||||||||||||
Operating | Southern | All | ||||||||||||||||||||||||||
Companies | Power | Eliminations | Total | Other | Eliminations | Consolidated | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2003 | ||||||||||||||||||||||||||||
Operating revenues | $ | 10,502 | $ | 682 | $ | (437 | ) | $ | 10,747 | $ | 357 | $ | (86 | ) | $ | 11,018 | ||||||||||||
Depreciation and amortization | 933 | 39 | — | 972 | 49 | 1 | 1,022 | |||||||||||||||||||||
Interest income | 33 | — | — | 33 | 6 | (3 | ) | 36 | ||||||||||||||||||||
Interest expense | 542 | 32 | — | 574 | 108 | (4 | ) | 678 | ||||||||||||||||||||
Income taxes | 760 | 85 | — | 845 | (228 | ) | 1 | 618 | ||||||||||||||||||||
Segment net income (loss) | 1,269 | 155 | — | 1,424 | 59 | (9 | ) | 1,474 | ||||||||||||||||||||
Total assets | 31,503 | 2,409 | (122 | ) | 33,790 | 1,574 | (189 | ) | 35,175 | |||||||||||||||||||
Gross property additions | 1,636 | 344 | — | 1,980 | 34 | — | 2,014 | |||||||||||||||||||||
Electric Utilities Revenues | ||||||||||||||||
Year | Retail | Wholesale | Other | Total | ||||||||||||
(in millions) | ||||||||||||||||
2005 | $ | 11,165 | $ | 1,667 | $ | 446 | $ | 13,278 | ||||||||
2004 | 9,732 | 1,341 | 392 | 11,465 | ||||||||||||
2003 | 8,875 | 1,358 | 514 | 10,747 | ||||||||||||
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Southern Company and Subsidiary Companies 2005 Annual Report
Per Common Share (Note) | ||||||||||||||||||||||||||||
Operating | Operating | Consolidated | Basic | Price Range | ||||||||||||||||||||||||
Quarter Ended | Revenues | Income | Net Income | Earnings | Dividends | High | Low | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
March 2005 | $ | 2,787 | $ | 560 | $ | 323 | $ | 0.43 | $ | 0.3575 | $ | 34.08 | $ | 31.25 | ||||||||||||||
June 2005 | 3,120 | 721 | 387 | 0.52 | 0.3725 | 34.91 | 31.78 | |||||||||||||||||||||
September 2005 | 4,358 | 1,277 | 722 | 0.97 | 0.3725 | 36.16 | 33.47 | |||||||||||||||||||||
December 2005 | 3,289 | 404 | 159 | 0.21 | 0.3725 | 36.07 | 33.28 | |||||||||||||||||||||
March 2004 | $ | 2,651 | $ | 615 | $ | 331 | $ | 0.45 | $ | 0.3500 | $ | 30.87 | $ | 29.10 | ||||||||||||||
June 2004 | 2,984 | 697 | 352 | 0.48 | 0.3500 | 30.59 | 27.86 | |||||||||||||||||||||
September 2004 | 3,424 | 1,120 | 645 | 0.87 | 0.3575 | 30.65 | 28.86 | |||||||||||||||||||||
December 2004 | 2,670 | 389 | 204 | 0.28 | 0.3575 | 33.92 | 29.95 | |||||||||||||||||||||
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For the Periods Ended December 2001 through 2005
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues(in millions) | $ | 13,554 | $ | 11,729 | $ | 11,018 | $ | 10,447 | $ | 10,155 | ||||||||||
Total Assets(in millions) | $ | 39,877 | $ | 36,955 | $ | 35,175 | $ | 33,721 | $ | 31,856 | ||||||||||
Gross Property Additions(in millions) | $ | 2,476 | $ | 2,099 | $ | 2,014 | $ | 2,728 | $ | 2,617 | ||||||||||
Return on Average Common Equity(percent) | 15.17 | 15.38 | 16.05 | 15.79 | 13.51 | |||||||||||||||
Cash Dividends Paid Per Share of Common Stock | $ | 1.475 | $ | 1.415 | $ | 1.385 | $ | 1.355 | $ | 1.340 | ||||||||||
Consolidated Net Income(in millions): | ||||||||||||||||||||
Continuing Operations | $ | 1,591 | $ | 1,529 | $ | 1,483 | $ | 1,315 | $ | 1,120 | ||||||||||
Discontinued Operations | — | 3 | (9 | ) | 3 | 142 | ||||||||||||||
Total | $ | 1,591 | $ | 1,532 | $ | 1,474 | $ | 1,318 | $ | 1,262 | ||||||||||
Earnings Per Share From Continuing Operations — | ||||||||||||||||||||
Basic | $ | 2.14 | $ | 2.07 | $ | 2.04 | $ | 1.86 | $ | 1.62 | ||||||||||
Diluted | 2.13 | 2.06 | 2.03 | 1.85 | 1.61 | |||||||||||||||
Earnings Per Share Including Discontinued Operations — | ||||||||||||||||||||
Basic | $ | 2.14 | $ | 2.07 | $ | 2.03 | $ | 1.86 | $ | 1.83 | ||||||||||
Diluted | 2.13 | 2.06 | 2.02 | 1.85 | 1.82 | |||||||||||||||
Capitalization (in millions) : | ||||||||||||||||||||
Common stock equity | $ | 10,689 | $ | 10,278 | $ | 9,648 | $ | 8,710 | $ | 7,984 | ||||||||||
Preferred and preference stock | 596 | 561 | 423 | 298 | 368 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 1,900 | 2,380 | 2,276 | |||||||||||||||
Long-term debt payable to affiliated trusts | 1,888 | 1,961 | — | — | — | |||||||||||||||
Long-term debt | 10,958 | 10,488 | 10,164 | 8,714 | 8,297 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 24,131 | $ | 23,288 | $ | 22,135 | $ | 20,102 | $ | 18,925 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 44.3 | 44.1 | 43.6 | 43.3 | 42.2 | |||||||||||||||
Preferred and preference stock | 2.5 | 2.4 | 1.9 | 1.5 | 1.9 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 8.6 | 11.8 | 12.0 | |||||||||||||||
Long-term debt payable to affiliated trusts | 7.8 | 8.4 | — | — | — | |||||||||||||||
Long-term debt | 45.4 | 45.1 | 45.9 | 43.4 | 43.9 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Other Common Stock Data: | ||||||||||||||||||||
Book value per share | $ | 14.42 | $ | 13.86 | $ | 13.13 | $ | 12.16 | $ | 11.43 | ||||||||||
Market price per share: | ||||||||||||||||||||
High | 36.160 | 33.920 | 31.810 | 30.850 | 26.000 | |||||||||||||||
Low | 31.250 | 27.860 | 27.710 | 23.890 | 16.152 | |||||||||||||||
Close | 34.530 | 33.520 | 30.250 | 28.390 | 25.350 | |||||||||||||||
Market-to-book ratio (year-end) (percent) | 239.5 | 241.8 | 230.4 | 233.5 | 221.8 | |||||||||||||||
Price-earnings ratio (year-end) (times) | 16.1 | 16.2 | 14.8 | 15.3 | 15.6 | |||||||||||||||
Dividends paid (in millions) | $ | 1,098 | $ | 1,044 | $ | 1,004 | $ | 958 | $ | 922 | ||||||||||
Dividend yield (year-end) (percent) | 4.3 | 4.2 | 4.6 | 4.8 | 5.3 | |||||||||||||||
Dividend payout ratio (percent) | 69.0 | 68.3 | 67.7 | 72.8 | 82.4 | |||||||||||||||
Shares outstanding (in thousands): | ||||||||||||||||||||
Average | 743,927 | 738,879 | 726,702 | 708,161 | 689,352 | |||||||||||||||
Year-end | 741,448 | 741,495 | 734,829 | 716,402 | 698,344 | |||||||||||||||
Stockholders of record (year-end) | 118,285 | 125,975 | 134,068 | 141,784 | 150,242 | |||||||||||||||
Retail Operating Company Customers (year-end) (in thousands): | ||||||||||||||||||||
Residential | 3,642 | 3,600 | 3,552 | 3,496 | 3,441 | |||||||||||||||
Commercial | 586 | 578 | 564 | 553 | 539 | |||||||||||||||
Industrial | 15 | 14 | 14 | 14 | 14 | |||||||||||||||
Other | 5 | 5 | 6 | 5 | 4 | |||||||||||||||
Total | 4,248 | 4,197 | 4,136 | 4,068 | 3,998 | |||||||||||||||
Employees(year-end) | 25,554 | 25,642 | 25,762 | 26,178 | 26,122 | |||||||||||||||
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For the Periods Ended December 2001 through 2005
Southern Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in millions): | ||||||||||||||||||||
Residential | $ | 4,376 | $ | 3,848 | $ | 3,565 | $ | 3,556 | $ | 3,247 | ||||||||||
Commercial | 3,904 | 3,346 | 3,075 | 3,007 | 2,966 | |||||||||||||||
Industrial | 2,785 | 2,446 | 2,146 | 2,078 | 2,144 | |||||||||||||||
Other | 100 | 92 | 89 | 87 | 83 | |||||||||||||||
Total retail | 11,165 | 9,732 | 8,875 | 8,728 | 8,440 | |||||||||||||||
Sales for resale | 1,667 | 1,341 | 1,358 | 1,168 | 1,174 | |||||||||||||||
Total revenues from sales of electricity | 12,832 | 11,073 | 10,233 | 9,896 | 9,614 | |||||||||||||||
Other revenues | 722 | 656 | 785 | 551 | 541 | |||||||||||||||
Total | $ | 13,554 | $ | 11,729 | $ | 11,018 | $ | 10,447 | $ | 10,155 | ||||||||||
Kilowatt-Hour Sales (in millions): | ||||||||||||||||||||
Residential | 51,082 | 49,702 | 47,833 | 48,784 | 44,538 | |||||||||||||||
Commercial | 51,857 | 50,037 | 48,372 | 48,250 | 46,939 | |||||||||||||||
Industrial | 55,141 | 56,399 | 54,415 | 53,851 | 52,891 | |||||||||||||||
Other | 996 | 1,005 | 998 | 1,000 | 977 | |||||||||||||||
Total retail | 159,076 | 157,143 | 151,618 | 151,885 | 145,345 | |||||||||||||||
Sales for resale | 37,801 | 35,239 | 40,520 | 32,551 | 30,768 | |||||||||||||||
Total | 196,877 | 192,382 | 192,138 | 184,436 | 176,113 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents): | ||||||||||||||||||||
Residential | 8.57 | 7.74 | 7.45 | 7.29 | 7.29 | |||||||||||||||
Commercial | 7.53 | 6.69 | 6.36 | 6.23 | 6.32 | |||||||||||||||
Industrial | 5.05 | 4.34 | 3.94 | 3.86 | 4.05 | |||||||||||||||
Total retail | 7.02 | 6.19 | 5.85 | 5.75 | 5.81 | |||||||||||||||
Sales for resale | 4.41 | 3.81 | 3.35 | 3.59 | 3.82 | |||||||||||||||
Total sales | 6.52 | 5.76 | 5.33 | 5.37 | 5.46 | |||||||||||||||
Average Annual Kilowatt-Hour | ||||||||||||||||||||
Use Per Residential Customer | 14,084 | 13,879 | 13,562 | 14,036 | 13,014 | |||||||||||||||
Average Annual Revenue | ||||||||||||||||||||
Per Residential Customer | $ | 1,207 | $ | 1,074 | $ | 1,011 | $ | 1,023 | $ | 949 | ||||||||||
Plant Nameplate Capacity | ||||||||||||||||||||
Ratings (year-end) (megawatts) | 40,502 | 38,622 | 38,679 | 36,353 | 34,579 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts): | ||||||||||||||||||||
Winter | 30,384 | 28,467 | 31,318 | 25,939 | 26,272 | |||||||||||||||
Summer | 35,050 | 34,414 | 32,949 | 32,355 | 29,700 | |||||||||||||||
System Reserve Margin (at peak) (percent) | 14.4 | 20.2 | 21.4 | 13.3 | 19.3 | |||||||||||||||
Annual Load Factor (percent) | 60.2 | 61.4 | 62.0 | 51.1 | 62.0 | |||||||||||||||
Plant Availability (percent): | ||||||||||||||||||||
Fossil-steam | 89.0 | 88.5 | 87.7 | 84.8 | 88.1 | |||||||||||||||
Nuclear | 90.5 | 92.8 | 94.4 | 90.3 | 90.8 | |||||||||||||||
Source of Energy Supply (percent): | ||||||||||||||||||||
Coal | 67.0 | 64.6 | 66.4 | 65.7 | 67.5 | |||||||||||||||
Nuclear | 13.9 | 14.4 | 14.8 | 14.7 | 15.2 | |||||||||||||||
Hydro | 3.1 | 2.9 | 3.8 | 2.6 | 2.6 | |||||||||||||||
Oil and gas | 10.9 | 10.9 | 8.8 | 11.4 | 8.4 | |||||||||||||||
Purchased power | 5.1 | 7.2 | 6.2 | 5.6 | 6.3 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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Birmingham, Alabama
February 27, 2006
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Key | 2005 | 2005 | ||
Performance Indicator | Target Performance | Actual Performance | ||
Customer Satisfaction | Top quartile in customer surveys | Top quartile | ||
Peak Season EFOR | 2.75% or less | 3.83% | ||
Net Income | $501 million | $508 million |
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Increase (Decrease) | ||||||||||||||||
Amount | From Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in millions) | ||||||||||||||||
Operating revenues | $ | 4,648 | $ | 412 | $ | 276 | $ | 250 | ||||||||
Fuel | 1,457 | 271 | 119 | 98 | ||||||||||||
Purchased power | 457 | 44 | 98 | 66 | ||||||||||||
Other operation and maintenance | 1,044 | 97 | 26 | 67 | ||||||||||||
Depreciation and amortization | 427 | 1 | 13 | 15 | ||||||||||||
Taxes other than income taxes | 249 | 6 | 14 | 11 | ||||||||||||
Total operating expenses | 3,634 | 419 | 270 | 257 | ||||||||||||
Operating income | 1,014 | (7 | ) | 6 | (7 | ) | ||||||||||
Total other income and (expense) | (197 | ) | 6 | 30 | 20 | |||||||||||
Income taxes | 285 | (29 | ) | 23 | (2 | ) | ||||||||||
Net income | 532 | 28 | 13 | 15 | ||||||||||||
Dividends on preferred stock | 24 | 1 | 5 | 3 | ||||||||||||
Net income after dividends on preferred stock | $ | 508 | $ | 27 | $ | 8 | $ | 12 | ||||||||
Amount | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Retail — prior year | $ | 3,293 | $ | 3,051 | $ | 2,951 | ||||||
Change in - | ||||||||||||
Base rates | 35 | 41 | 51 | |||||||||
Sales growth | 50 | 48 | 68 | |||||||||
Weather | 18 | 12 | (61 | ) | ||||||||
Fuel cost recovery and other | 225 | 141 | 42 | |||||||||
Retail — current year | 3,621 | 3,293 | 3,051 | |||||||||
Sales for resale — | ||||||||||||
Non-affiliates | 551 | 484 | 488 | |||||||||
Affiliates | 289 | 308 | 277 | |||||||||
Total sales for resale | 840 | 792 | 765 | |||||||||
Other operating revenues | 187 | 151 | 144 | |||||||||
Total operating revenues | $ | 4,648 | $ | 4,236 | $ | 3,960 | ||||||
Percent change | 9.7 | % | 7.0 | % | 6.7 | % | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Unit power - | ||||||||||||
Capacity | $ | 147,609 | $ | 134,615 | $ | 130,022 | ||||||
Energy | 169,080 | 146,809 | 145,342 | |||||||||
Total | $ | 316,689 | $ | 281,424 | $ | 275,364 | ||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Other power sales - | ||||||||||||
Capacity and other | $ | 116,181 | $ | 90,673 | $ | 96,263 | ||||||
Variable cost of energy | 118,537 | 111,742 | 115,829 | |||||||||
Total | $ | 234,718 | $ | 202,415 | $ | 212,092 | ||||||
KWH | Percent Change | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(millions) | ||||||||||||||||
Residential | 18,074 | 4.1 | % | 2.4 | % | (2.5 | )% | |||||||||
Commercial | 14,062 | 1.7 | 2.8 | 0.7 | ||||||||||||
Industrial | 23,350 | 2.2 | 5.8 | 2.3 | ||||||||||||
Other | 198 | 0.2 | (2.4 | ) | (1.1 | ) | ||||||||||
Total retail | 55,684 | 2.7 | 3.9 | 0.3 | ||||||||||||
Sales for resale — | ||||||||||||||||
Non-affiliates | 15,443 | (0.3 | ) | (9.4 | ) | 9.9 | ||||||||||
Affiliates | 5,735 | (20.7 | ) | (23.2 | ) | 6.5 | ||||||||||
Total | 76,862 | (0.1 | ) | (2.2 | ) | 2.9 | ||||||||||
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Alabama Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
Total generation | ||||||||||||
(billions of KWHs) | 71 | 70 | 72 | |||||||||
Sources of generation | ||||||||||||
(percent) — | ||||||||||||
Coal | 67 | 65 | 64 | |||||||||
Nuclear | 19 | 19 | 19 | |||||||||
Hydro | 6 | 6 | 8 | |||||||||
Gas | 8 | 10 | 9 | |||||||||
Average cost of fuel per net KWH generated (cents) | 2.02 | 1.69 | 1.54 | |||||||||
Average cost of purchased power per net KWH (cents) | 6.49 | 4.79 | 3.61 | |||||||||
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. |
• | Changes in existing income tax regulations or changes in Internal Revenue Service interpretations of existing regulations. |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which the Company may be asserted to be a potentially responsible party. |
• | Identification and evaluation of other potential lawsuits or complaints in which the Company may be named as a defendant. |
• | Resolution or progression of existing matters through the legislative process, the court systems, or the EPA. |
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Changes in Fair Value | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Contracts beginning of year | $ | 4,017 | $ | 6,413 | ||||
Contracts realized or settled | (38,320 | ) | (26,384 | ) | ||||
New contracts at inception | — | — | ||||||
Changes in valuation techniques | — | — | ||||||
Current period changes (a) | 63,281 | 23,988 | ||||||
Contracts end of year | $ | 28,978 | $ | 4,017 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End | ||||||||||||
Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | 2006 | 2007-2008 | ||||||||||
(in thousands) | ||||||||||||
Actively quoted | $ | 29,177 | $ | 19,392 | $ | 9,785 | ||||||
External sources | (199 | ) | (199 | ) | — | |||||||
Models and other methods | — | — | — | |||||||||
Contracts end of Year | $ | 28,978 | $ | 19,193 | $ | 9,785 | ||||||
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Alabama Power Company 2005 Annual Report
Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 29,044 | ||
Other comprehensive income | — | |||
Net income | (66 | ) | ||
Total fair value | $ | 28,978 | ||
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Contractual Obligations | ||||||||||||||||||||
2007- | 2009- | After | ||||||||||||||||||
2006 | 2008 | 2010 | 2010 | Total | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Long-term debt(a) — | ||||||||||||||||||||
Principal | $ | 546.7 | $ | 1,078.8 | $ | 350.1 | $ | 2,444.4 | $ | 4,420.0 | ||||||||||
Interest | 191.7 | 325.3 | 252.7 | 2,165.7 | 2,935.4 | |||||||||||||||
Commodity derivative obligations(b) | 9.3 | 0.1 | — | — | 9.4 | |||||||||||||||
Preferred stock dividends(c) | 24.3 | 48.6 | 48.6 | — | 121.5 | |||||||||||||||
Operating leases | 23.6 | 28.5 | 17.0 | 29.1 | 98.2 | |||||||||||||||
Purchase commitments(d) — | ||||||||||||||||||||
Capital(e) | 950.9 | 2,208.1 | — | — | 3,159.0 | |||||||||||||||
Coal | 1,064.9 | 1,551.7 | 863.6 | 323.6 | 3,803.8 | |||||||||||||||
Nuclear fuel | 18.3 | 20.0 | 8.6 | 25.5 | 72.4 | |||||||||||||||
Natural gas(f) | 545.2 | 413.9 | 45.4 | 89.4 | 1,093.9 | |||||||||||||||
Purchased power | 87.0 | 177.0 | 125.0 | 2.0 | 391.0 | |||||||||||||||
Long-term service agreements | 17.8 | 37.0 | 38.4 | 87.4 | 180.6 | |||||||||||||||
Postretirement benefits(g) | 24.9 | 44.6 | — | — | 69.5 | |||||||||||||||
DOE | 4.7 | — | — | — | 4.7 | |||||||||||||||
Total | $ | 3,509.3 | $ | 5,933.6 | $ | 1,749.4 | $ | 5,167.1 | $ | 16,359.4 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. Fixed rates include, where applicable, the effects of interest rate derivatives employed to manage interest rate risk. | |
(b) | For additional information, see Notes 1 and 6 to the financial statements herein. | |
(c) | Preferred stock does not mature; therefore, amounts are provided for the next five years only. | |
(d) | The Company generally does not enter into non-cancelable commitments for other operation and maintenance expenditures. Total other operation and maintenance expenses for 2005, 2004, and 2003 were $1.04 billion, $947 million, and $921 million, respectively. | |
(e) | The Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures excluding those amounts related to contractual purchase commitments for uranium and nuclear fuel conversion, enrichment, and fabrication services. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(f) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(g) | The Company forecasts postretirement trust contributions over a three-year period. No contributions related to the Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from the Company’s corporate assets. |
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Alabama Power Company 2005 Annual Report
• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax, and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; | |
• | current and future litigation, regulatory investigations, proceedings, or inquiries, including the pending EPA civil action against the Company, and FERC matters; | |
• | the effects, extent, and timing of the entry of additional competition in the markets in which the Company operates; | |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population and business growth (and declines); | |
• | available sources and costs of fuels; | |
• | ability to control costs; | |
• | investment performance of the Company’s employee benefit plans; | |
• | advances in technology; | |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; | |
• | internal restructuring or other restructuring options that may be pursued; | |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to the Company; | |
• | the ability of counterparties of the Company to make payments as and when due; | |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; | |
• | the direct or indirect effect on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; | |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; | |
• | the ability of the Company to obtain additional generating capacity at competitive prices; | |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, or other similar occurrences; | |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; | |
• | the effect of accounting pronouncements issued periodically by standard-setting bodies; and | |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Company from time to time with the Securities and Exchange Commission. |
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 3,621,421 | $ | 3,292,828 | $ | 3,051,463 | ||||||
Sales for resale — | ||||||||||||
Non-affiliates | 551,408 | 483,839 | 487,456 | |||||||||
Affiliates | 288,956 | 308,312 | 277,287 | |||||||||
Other revenues | 186,039 | 151,012 | 143,955 | |||||||||
Total operating revenues | 4,647,824 | 4,235,991 | 3,960,161 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 1,457,301 | 1,186,472 | 1,067,821 | |||||||||
Purchased power — | ||||||||||||
Non-affiliates | 188,733 | 186,187 | 110,885 | |||||||||
Affiliates | 268,751 | 226,697 | 204,353 | |||||||||
Other operations | 682,308 | 634,030 | 611,418 | |||||||||
Maintenance | 361,832 | 313,407 | 309,451 | |||||||||
Depreciation and amortization | 426,506 | 425,906 | 412,919 | |||||||||
Taxes other than income taxes | 248,854 | 242,809 | 228,414 | |||||||||
Total operating expenses | 3,634,285 | 3,215,508 | 2,945,261 | |||||||||
Operating Income | 1,013,539 | 1,020,483 | 1,014,900 | |||||||||
Other Income and (Expense): | ||||||||||||
Allowance for equity funds used during construction | 20,281 | 16,141 | 12,594 | |||||||||
Interest income | 17,144 | 15,677 | 15,220 | |||||||||
Interest expense, net of amounts capitalized | (197,367 | ) | (193,590 | ) | (214,302 | ) | ||||||
Interest expense to affiliate trusts | (16,237 | ) | (16,191 | ) | — | |||||||
Distributions on mandatorily redeemable preferred securities | — | — | (15,255 | ) | ||||||||
Other income (expense), net | (20,461 | ) | (24,728 | ) | (31,702 | ) | ||||||
Total other income and (expense) | (196,640 | ) | (202,691 | ) | (233,445 | ) | ||||||
Earnings Before Income Taxes | 816,899 | 817,792 | 781,455 | |||||||||
Income taxes | 284,715 | 313,024 | 290,378 | |||||||||
Net Income | 532,184 | 504,768 | 491,077 | |||||||||
Dividends on Preferred Stock | 24,289 | 23,597 | 18,267 | |||||||||
Net Income After Dividends on Preferred Stock | $ | 507,895 | $ | 481,171 | $ | 472,810 | ||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Alabama Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 532,184 | $ | 504,768 | $ | 491,077 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 498,914 | 497,010 | 487,370 | |||||||||
Deferred income taxes and investment tax credits, net | 106,765 | 252,858 | 153,154 | |||||||||
Deferred revenues | (12,502 | ) | (11,510 | ) | (17,932 | ) | ||||||
Allowance for equity funds used during construction | (20,281 | ) | (16,141 | ) | (12,594 | ) | ||||||
Pension, postretirement, and other employee benefits | (22,117 | ) | (31,184 | ) | (38,953 | ) | ||||||
Tax benefit of stock options | 17,400 | 10,672 | 8,680 | |||||||||
Hedge settlements | (21,445 | ) | 2,241 | (7,957 | ) | |||||||
Storm damage accounting order | 48,000 | — | — | |||||||||
Other, net | (15,491 | ) | 26,826 | 14,177 | ||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (255,481 | ) | (126,432 | ) | (13,416 | ) | ||||||
Fossil fuel stock | (44,632 | ) | 30,130 | (13,251 | ) | |||||||
Materials and supplies | (16,935 | ) | (26,229 | ) | (4,651 | ) | ||||||
Other current assets | 1,199 | 7,438 | (953 | ) | ||||||||
Accounts payable | 80,951 | (31,899 | ) | 77,128 | ||||||||
Accrued taxes | (5,381 | ) | (24,568 | ) | (33,507 | ) | ||||||
Accrued compensation | 3,273 | (7,041 | ) | 664 | ||||||||
Other current liabilities | 33,675 | (42,544 | ) | 29,058 | ||||||||
Net cash provided from operating activities | 908,096 | 1,014,395 | 1,118,094 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (860,807 | ) | (768,334 | ) | (643,231 | ) | ||||||
Nuclear decommissioning trust fund purchases | (224,716 | ) | (269,277 | ) | (350,271 | ) | ||||||
Nuclear decommissioning trust fund sales | 223,850 | 248,992 | 329,986 | |||||||||
Cost of removal net of salvage | (61,314 | ) | (37,369 | ) | (35,440 | ) | ||||||
Other | (9,738 | ) | (5,008 | ) | 1,193 | |||||||
Net cash used for investing activities | (932,725 | ) | (830,996 | ) | (697,763 | ) | ||||||
Financing Activities: | ||||||||||||
Increase (decrease) in notes payable, net | 315,278 | — | (36,991 | ) | ||||||||
Proceeds — | ||||||||||||
Senior notes | 250,000 | 900,000 | 1,415,000 | |||||||||
Preferred stock | — | 100,000 | 125,000 | |||||||||
Common stock | 40,000 | 40,000 | 50,000 | |||||||||
Capital contributions from parent company | 22,473 | 17,541 | 17,826 | |||||||||
Pollution control bonds | 21,450 | — | — | |||||||||
Redemptions — | ||||||||||||
Senior notes | (225,000 | ) | (725,000 | ) | (1,507,000 | ) | ||||||
Pollution control bonds | (21,450 | ) | — | — | ||||||||
Other long-term debt | (5 | ) | (1,445 | ) | (943 | ) | ||||||
Payment of preferred stock dividends | (22,759 | ) | (23,639 | ) | (18,181 | ) | ||||||
Payment of common stock dividends | (409,900 | ) | (437,300 | ) | (430,200 | ) | ||||||
Other | (2,697 | ) | (16,597 | ) | (14,775 | ) | ||||||
Net cash used for financing activities | (32,610 | ) | (146,440 | ) | (400,264 | ) | ||||||
Net Change in Cash and Cash Equivalents | (57,239 | ) | 36,959 | 20,067 | ||||||||
Cash and Cash Equivalents at Beginning of Year | 79,711 | 42,752 | 22,685 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 22,472 | $ | 79,711 | $ | 42,752 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for — | ||||||||||||
Interest (net of $8,161, $6,832, and $6,367 capitalized, respectively) | $ | 179,658 | $ | 188,556 | $ | 185,272 | ||||||
Income taxes (net of refunds) | 159,600 | 69,068 | 161,004 | |||||||||
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BALANCE SHEETS |
Assets | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 22,472 | $ | 79,711 | ||||
Receivables — | ||||||||
Customer accounts receivable | 275,702 | 233,286 | ||||||
Unbilled revenues | 95,039 | 96,486 | ||||||
Under recovered regulatory clause revenues | 132,139 | 119,773 | ||||||
Other accounts and notes receivable | 50,008 | 52,145 | ||||||
Affiliated companies | 77,304 | 61,149 | ||||||
Accumulated provision for uncollectible accounts | (7,560 | ) | (5,404 | ) | ||||
Fossil fuel stock, at average cost | 102,420 | 57,787 | ||||||
Vacation pay | 37,646 | 36,494 | ||||||
Materials and supplies, at average cost | 244,417 | 237,919 | ||||||
Prepaid expenses | 58,845 | 61,898 | ||||||
Assets from risk management activities | 53,192 | 11,268 | ||||||
Other | 52,561 | 11,693 | ||||||
Total current assets | 1,194,185 | 1,054,205 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 15,300,346 | 14,632,342 | ||||||
Less accumulated provision for depreciation | 5,313,731 | 5,097,930 | ||||||
9,986,615 | 9,534,412 | |||||||
Nuclear fuel, at amortized cost | 127,199 | 93,388 | ||||||
Construction work in progress | 469,018 | 474,670 | ||||||
Total property, plant, and equipment | 10,582,832 | 10,102,470 | ||||||
Other Property and Investments: | ||||||||
Equity investments in unconsolidated subsidiaries | 46,913 | 45,455 | ||||||
Nuclear decommissioning trusts, at fair value | 466,963 | 445,634 | ||||||
Other | 41,457 | 40,942 | ||||||
Total other property and investments | 555,333 | 532,031 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 388,634 | 316,528 | ||||||
Prepaid pension costs | 515,281 | 489,193 | ||||||
Deferred under recovered regulatory clause revenues | 186,864 | — | ||||||
Other regulatory assets | 128,437 | 163,273 | ||||||
Other | 138,341 | 123,825 | ||||||
Total deferred charges and other assets | 1,357,557 | 1,092,819 | ||||||
Total Assets | $ | 13,689,907 | $ | 12,781,525 | ||||
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Liabilities and Stockholder's Equity | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Liabilities: | ||||||||
Securities due within one year | $ | 546,645 | $ | 225,005 | ||||
Notes payable | 315,278 | — | ||||||
Accounts payable — | ||||||||
Affiliated | 190,744 | 141,096 | ||||||
Other | 266,174 | 198,834 | ||||||
Customer deposits | 56,709 | 47,664 | ||||||
Accrued taxes — | ||||||||
Income taxes | 63,844 | 28,498 | ||||||
Other | 31,692 | 29,688 | ||||||
Accrued interest | 46,018 | 40,029 | ||||||
Accrued vacation pay | 37,646 | 36,494 | ||||||
Accrued compensation | 92,784 | 76,858 | ||||||
Other | 72,991 | 34,289 | ||||||
Total current liabilities | 1,720,525 | 858,455 | ||||||
Long-term Debt(See accompanying statements) | 3,560,186 | 3,855,257 | ||||||
Long-term Debt Payable to Affiliated Trusts(See accompanying statements) | 309,279 | 309,279 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 2,070,746 | 1,885,120 | ||||||
Deferred credits related to income taxes | 101,678 | 148,395 | ||||||
Accumulated deferred investment tax credits | 196,585 | 205,353 | ||||||
Employee benefit obligations | 208,663 | 194,837 | ||||||
Asset retirement obligations | 446,268 | 383,621 | ||||||
Other cost of removal obligations | 600,104 | 597,147 | ||||||
Other regulatory liabilities | 194,135 | 206,765 | ||||||
Other | 23,966 | 62,045 | ||||||
Total deferred credits and other liabilities | 3,842,145 | 3,683,283 | ||||||
Total Liabilities | 9,432,135 | 8,706,274 | ||||||
Cumulative Preferred Stock(See accompanying statements) | 465,046 | 465,047 | ||||||
Common Stockholder’s Equity(See accompanying statements) | 3,792,726 | 3,610,204 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 13,689,907 | $ | 12,781,525 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long-Term Debt: | ||||||||||||||||
Long-term notes payable — | ||||||||||||||||
5.49% due November 1, 2005 | $ | — | $ | 225,000 | ||||||||||||
2.65% to 2.80% due 2006 | 520,000 | 520,000 | ||||||||||||||
Floating rate (1.94% at 1/1/06) due 2006 | 26,500 | 195,000 | ||||||||||||||
3.50% to 7.125% due 2007 | 500,000 | 500,000 | ||||||||||||||
Floating rate (2.14% at 1/1/06) due 2007 | 168,500 | — | ||||||||||||||
3.125% to 5.375% due 2008 | 410,000 | 410,000 | ||||||||||||||
Floating rate (4.58% at 1/1/06) due 2009 | 250,000 | 250,000 | ||||||||||||||
4.70% due 2010 | 100,000 | 100,000 | ||||||||||||||
5.125% to 5.875% due 2011-2035 | 1,575,000 | 1,325,000 | ||||||||||||||
Total long-term notes payable | $ | 3,550,000 | $ | 3,525,000 | ||||||||||||
Other long-term debt — | ||||||||||||||||
Pollution control revenue bonds — | ||||||||||||||||
Collateralized: | ||||||||||||||||
Variable rates (2.01% to 2.16% at 1/1/06) due 2015-2017 | 89,800 | 89,800 | ||||||||||||||
5.50% due 2024 | 2,950 | 24,400 | ||||||||||||||
Non-collateralized: | ||||||||||||||||
Variable rates (2.01% to 3.74% at 1/1/06) due 2021-2031 | 467,390 | 445,940 | ||||||||||||||
Total other long-term debt | 560,140 | 560,140 | ||||||||||||||
Capitalized lease obligations | 564 | 52 | ||||||||||||||
Unamortized debt premium (discount), net | (3,873 | ) | (4,930 | ) | ||||||||||||
Total long-term debt (annual interest requirement — $175.4 million) | 4,106,831 | 4,080,262 | ||||||||||||||
Less amount due within one year | 546,645 | 225,005 | ||||||||||||||
Long-term debt excluding amount due within one year | $ | 3,560,186 | $ | 3,855,257 | 43.8 | % | 46.8 | % | ||||||||
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2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long-term Debt Payable to Affiliated Trusts: | ||||||||||||||||
4.75% to 5.5% due 2042 (annual interest requirement — $16.2 million) | 309,279 | 309,279 | 3.8 | 3.8 | ||||||||||||
Cumulative Preferred Stock: | ||||||||||||||||
$100 par or stated value — 4.20% to 4.92% | ||||||||||||||||
Authorized — 3,850,000 shares | ||||||||||||||||
Outstanding — 475,115 shares | 47,610 | 47,611 | ||||||||||||||
$1 par value — 4.95% to 5.83% | ||||||||||||||||
Authorized — 27,500,000 shares | ||||||||||||||||
Outstanding — 12,000,000 shares: $25 stated value | 294,105 | 294,105 | ||||||||||||||
Outstanding — 1,250 shares: $100,000 stated value | 123,331 | 123,331 | ||||||||||||||
Total cumulative preferred stock (annual dividend requirement — $24.3 million) | 465,046 | 465,047 | 5.7 | 5.6 | ||||||||||||
Common Stockholder’s Equity: | ||||||||||||||||
Common stock, par value $40 per share — | ||||||||||||||||
Authorized - 15,000,000 shares | ||||||||||||||||
Outstanding - 9,250,000 shares in 2005 and 8,250,000 shares in 2004 | 370,000 | 330,000 | ||||||||||||||
Paid-in capital | 1,995,056 | 1,955,183 | ||||||||||||||
Retained earnings | 1,439,144 | 1,341,049 | ||||||||||||||
Accumulated other comprehensive income (loss) | (11,474 | ) | (16,028 | ) | ||||||||||||
Total common stockholder’s equity | 3,792,726 | 3,610,204 | 46.7 | 43.8 | ||||||||||||
Total Capitalization | $ | 8,127,237 | $ | 8,239,787 | 100.0 | % | 100.0 | % | ||||||||
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Other | ||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2002 | $ | 240,000 | $ | 1,900,563 | $ | 1,250,594 | $ | (13,417 | ) | $ | 3,377,740 | |||||||||
Net income after dividends on preferred stock | — | — | 472,810 | — | 472,810 | |||||||||||||||
Issuance of common stock | 50,000 | — | — | — | 50,000 | |||||||||||||||
Capital contributions from parent company | — | 26,506 | — | — | 26,506 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 5,450 | 5,450 | |||||||||||||||
Cash dividends on common stock | — | — | (430,200 | ) | — | (430,200 | ) | |||||||||||||
Other | — | — | (1,646 | ) | — | (1,646 | ) | |||||||||||||
Balance at December 31, 2003 | 290,000 | 1,927,069 | 1,291,558 | (7,967 | ) | 3,500,660 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 481,171 | — | 481,171 | |||||||||||||||
Issuance of common stock | 40,000 | — | — | — | 40,000 | |||||||||||||||
Capital contributions from parent company | — | 28,213 | — | — | 28,213 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (8,061 | ) | (8,061 | ) | |||||||||||||
Cash dividends on common stock | — | — | (437,300 | ) | — | (437,300 | ) | |||||||||||||
Other | — | (99 | ) | 5,620 | — | 5,521 | ||||||||||||||
Balance at December 31, 2004 | 330,000 | 1,955,183 | 1,341,049 | (16,028 | ) | 3,610,204 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 507,895 | — | 507,895 | |||||||||||||||
Issuance of common stock | 40,000 | — | — | — | 40,000 | |||||||||||||||
Capital contributions from parent company | — | 39,873 | — | — | 39,873 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 4,554 | 4,554 | |||||||||||||||
Cash dividends on common stock | — | — | (409,900 | ) | — | (409,900 | ) | |||||||||||||
Other | — | — | 100 | — | 100 | |||||||||||||||
Balance at December 31, 2005 | $ | 370,000 | $ | 1,995,056 | $ | 1,439,144 | $ | (11,474 | ) | $ | 3,792,726 | |||||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Net income after dividends on preferred stock | $ | 507,895 | $ | 481,171 | $ | 472,810 | ||||||
Other comprehensive income (loss): | ||||||||||||
Change in additional minimum pension liability, net of tax of $(1,422), $(2,482) and $(2,301), respectively | (2,338 | ) | (4,083 | ) | (3,785 | ) | ||||||
Change in fair value of marketable securities, net of tax of $252 | — | 414 | — | |||||||||
Changes in fair value of qualifying hedges, net of tax of $5,523, $(4,807) and $1,330, respectively | 9,085 | (7,906 | ) | 2,188 | ||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $(1,333), $2,136 and $4,285, respectively | (2,193 | ) | 3,514 | 7,047 | ||||||||
Total other comprehensive income (loss) | 4,554 | (8,061 | ) | 5,450 | ||||||||
Comprehensive Income | $ | 512,449 | $ | 473,110 | $ | 478,260 | ||||||
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Alabama Power Company 2005 Annual Report
2005 | 2004 | Note | ||||||||||
(in millions) | ||||||||||||
Deferred income tax charges | $ | 389 | $ | 317 | (a | ) | ||||||
Loss on reacquired debt | 102 | 109 | (b | ) | ||||||||
DOE assessments | 5 | 9 | (c | ) | ||||||||
Vacation pay | 38 | 36 | (d | ) | ||||||||
Rate CNP under recovery | 31 | 18 | (e | ) | ||||||||
Natural disaster reserve | 51 | 38 | (e | ) | ||||||||
Fuel-hedging assets | 9 | 6 | (f | ) | ||||||||
Other assets | 13 | 13 | (e | ) | ||||||||
Asset retirement obligations | (139 | ) | (159 | ) | (a | ) | ||||||
Other cost of removal obligations | (600 | ) | (597 | ) | (a | ) | ||||||
Deferred income tax credits | (102 | ) | (148 | ) | (a | ) | ||||||
Deferred purchased power | (19 | ) | (19 | ) | (e | ) | ||||||
Mine reclamation and remediation | (16 | ) | (25 | ) | (e | ) | ||||||
Fuel-hedging liabilities | (38 | ) | (10 | ) | (f | ) | ||||||
Other liabilities | (11 | ) | (1 | ) | (e | ) | ||||||
Total | $ | (287 | ) | $ | (413 | ) | ||||||
Note: | The recovery and amortization periods for these regulatory assets and (liabilities) are as follows: | |
(a) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered, and deferred tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(b) | Recovered over the remaining life of the original issue which may range up to 50 years. | |
(c) | Assessments for the decontamination and decommissioning of the DOE nuclear fuel enrichment facilities are recorded annually from 1993 through 2006. | |
(d) | Recorded as earned by employees and recovered as paid, generally within one year. | |
(e) | Recorded and recovered or amortized as approved by the Alabama PSC. | |
(f) | Fuel-hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed two years. Upon final settlement, actual costs incurred are recovered through the fuel cost recovery clauses. |
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Alabama Power Company 2005 Annual Report
2005 | 2004 | |||||||
Generation | $ | 7,971 | $ | 7,635 | ||||
Transmission | 2,205 | 2,097 | ||||||
Distribution | 4,115 | 3,922 | ||||||
General | 1,000 | 969 | ||||||
Plant acquisition adjustment | 9 | 9 | ||||||
Total plant in service | $ | 15,300 | $ | 14,632 | ||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Balance beginning of year | $ | 384 | $ | 359 | ||||
Liabilities incurred | 36 | — | ||||||
Liabilities settled | — | — | ||||||
Accretion | 26 | 25 | ||||||
Cash flow revisions | — | — | ||||||
Balance end of year | $ | 446 | $ | 384 | ||||
Unrealized | Unrealized | |||||||||||
2005 | Gains | Losses | Fair Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 78.9 | $ | (7.7 | ) | $ | 275.3 | |||||
Debt | 1.3 | (1.6 | ) | 106.1 | ||||||||
Other | 17.0 | — | 85.6 | |||||||||
Total | $ | 97.2 | $ | (9.3 | ) | $ | 467.0 | |||||
Unrealized | Unrealized | |||||||||||
2004 | Gains | Losses | Fair Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 71.3 | $ | (4.3 | ) | $ | 258.1 | |||||
Debt | 3.2 | (0.6 | ) | 95.5 | ||||||||
Other | 13.6 | (0.2 | ) | 92.0 | ||||||||
Total | $ | 88.1 | $ | (5.1 | ) | $ | 445.6 | |||||
(in millions) | ||||
External trust funds, at fair value | $ | 467 | ||
Internal reserves | 28 | |||
Total | $ | 495 | ||
Decommissioning periods: | ||||
Beginning year | 2017 | |||
Completion year | 2046 | |||
(in millions) | ||||
Site study costs: | ||||
Radiated structures | $ | 892 | ||
Non-radiated structures | 63 | |||
Total | $ | 955 | ||
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As | Options | Pro | ||||||||||
Net Income | Reported | Impact | Forma | |||||||||
(in thousands) | ||||||||||||
2005 | $ | 507,895 | $ | (2,829 | ) | $ | 505,066 | |||||
2004 | 481,171 | (2,575 | ) | 478,596 | ||||||||
2003 | 472,810 | (2,762 | ) | 470,048 | ||||||||
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.9 | % | 3.1 | % | 2.7 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.9 | % | 19.6 | % | 23.6 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 | ||||||
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Carrying | Fair | |||||||
Amount | Value | |||||||
(in millions) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 4,416 | $ | 4,403 | ||||
2004 | 4,389 | 4,454 | ||||||
Projected | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 1,325 | $ | 1,200 | ||||
Service cost | 33 | 30 | ||||||
Interest cost | 74 | 71 | ||||||
Benefits paid | (65 | ) | (64 | ) | ||||
Plan amendments | 8 | 1 | ||||||
Actuarial (gain) loss | 46 | 87 | ||||||
Balance at end of year | $ | 1,421 | $ | 1,325 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 1,676 | $ | 1,583 | ||||
Actual return on plan assets | 262 | 157 | ||||||
Employer contributions | 4 | 4 | ||||||
Benefits paid | (67 | ) | (68 | ) | ||||
Balance at end of year | $ | 1,875 | $ | 1,676 | ||||
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Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Funded status | $ | 454 | $ | 351 | ||||
Unrecognized prior service cost | 79 | 80 | ||||||
Unrecognized net (gain) loss | (52 | ) | 27 | |||||
Prepaid pension asset, net | $ | 481 | $ | 458 | ||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Prepaid pension asset | $ | 515 | $ | 489 | ||||
Employee benefit obligations | (67 | ) | (60 | ) | ||||
Intangible asset | 10 | 10 | ||||||
Accumulated other comprehensive income | 23 | 19 | ||||||
Prepaid pension asset, net | $ | 481 | $ | 458 | ||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 33 | $ | 30 | $ | 27 | ||||||
Interest cost | 74 | 71 | 68 | |||||||||
Expected return on plan assets | (139 | ) | (138 | ) | (138 | ) | ||||||
Recognized net (gain) loss | 2 | (3 | ) | (12 | ) | |||||||
Net amortization | 9 | 4 | 3 | |||||||||
Net pension cost (income) | $ | (21 | ) | $ | (36 | ) | $ | (52 | ) | |||
Benefit | ||||
Payments | ||||
(in millions) | ||||
2006 | $ | 65.2 | ||
2007 | 66.6 | |||
2008 | 68.4 | |||
2009 | 70.6 | |||
2010 | 73.6 | |||
2011 to 2015 | $ | 429.2 | ||
Accumulated | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 465 | $ | 441 | ||||
Service cost | 7 | 7 | ||||||
Interest cost | 26 | 24 | ||||||
Benefits paid | (21 | ) | (18 | ) | ||||
Actuarial (gain) loss | 13 | 11 | ||||||
Balance at end of year | $ | 490 | $ | 465 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 212 | $ | 186 | ||||
Actual return on plan assets | 28 | 24 | ||||||
Employer contributions | 26 | 20 | ||||||
Benefits paid | (21 | ) | (18 | ) | ||||
Balance at end of year | $ | 245 | $ | 212 | ||||
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Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 49 | % | 53 | % | 46 | % | ||||||
International equity | 11 | 11 | 13 | |||||||||
Fixed income | 29 | 28 | 33 | |||||||||
Real estate | 7 | 6 | 5 | |||||||||
Private equity | 4 | 2 | 3 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Funded status | $ | (245 | ) | $ | (253 | ) | ||
Unrecognized transition obligation | 29 | 33 | ||||||
Unrecognized prior service cost | 64 | 68 | ||||||
Unrecognized net loss (gain) | 85 | 87 | ||||||
Fourth quarter contributions | 12 | 9 | ||||||
Accrued liability recognized in the balance sheets | $ | (55 | ) | $ | (56 | ) | ||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 7 | $ | 7 | $ | 6 | ||||||
Interest cost | 26 | 24 | 25 | |||||||||
Expected return on plan assets | (16 | ) | (18 | ) | (17 | ) | ||||||
Net amortization | 11 | 9 | 9 | |||||||||
Net postretirement cost | $ | 28 | $ | 22 | $ | 23 | ||||||
Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in millions) | ||||||||||||
2006 | $ | 24.5 | $ | (2.6 | ) | $ | 21.9 | |||||
2007 | 25.6 | (3.1 | ) | 22.5 | ||||||||
2008 | 27.8 | (3.5 | ) | 24.3 | ||||||||
2009 | 30.4 | (3.8 | ) | 26.6 | ||||||||
2010 | 32.9 | (4.1 | ) | 28.8 | ||||||||
2011 to 2015 | $ | 180.2 | $ | (27.7 | ) | $ | 152.5 | |||||
2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | 3.50 | 3.75 | |||||||||
Long-term return on plan assets | 8.50 | 8.50 | 8.50 | |||||||||
1 Percent | 1 Percent | |||||||
Increase | Decrease | |||||||
(in millions) | ||||||||
Benefit obligation | $ | 40 | $ | 35 | ||||
Service and interest costs | 3 | 2 | ||||||
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Total | ||||||||
Megawatt | Company | |||||||
Facility (Type) | Capacity | Ownership | ||||||
Greene County | 500 | 60.00% | (1) | |||||
Plant Miller | ||||||||
Units 1 and 2 | 1,320 | 91.84% | (2) | |||||
(1) | Jointly owned with an affiliate, Mississippi Power. | |
(2) | Jointly owned with Alabama Electric Cooperative, Inc. |
Company | Accumulated | |||||||
Facility | Investment | Depreciation | ||||||
(in millions) | ||||||||
Greene County | $ | 115 | $ | 60 | ||||
Plant Miller | ||||||||
Units 1 and 2 | 940 | 374 | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Federal— | ||||||||||||
Current | $ | 151 | $ | 44 | $ | 111 | ||||||
Deferred | 81 | 219 | 137 | |||||||||
232 | 263 | 248 | ||||||||||
State — | ||||||||||||
Current | 27 | 16 | 26 | |||||||||
Deferred | 26 | 34 | 16 | |||||||||
53 | 50 | 42 | ||||||||||
Total | $ | 285 | $ | 313 | $ | 290 | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 1,626 | $ | 1,524 | ||||
Property basis differences | 440 | 416 | ||||||
Premium on reacquired debt | 42 | 45 | ||||||
Pensions | 148 | 136 | ||||||
Fuel clause under recovered | 138 | 48 | ||||||
Storm reserve | 26 | 20 | ||||||
Other | 46 | 36 | ||||||
Total | 2,466 | 2,225 | ||||||
Deferred tax assets: | ||||||||
Federal effect of state deferred taxes | 114 | 112 | ||||||
State effect of federal deferred taxes | 87 | 110 | ||||||
Unbilled revenue | 22 | 22 | ||||||
Pension and other benefits | 20 | 16 | ||||||
Other comprehensive losses | 19 | 16 | ||||||
Other | 69 | 36 | ||||||
Total | 331 | 312 | ||||||
Total deferred tax liabilities, net | 2,135 | 1,913 | ||||||
Portion included in current (liabilities) assets, net | (64 | ) | (28 | ) | ||||
Accumulated deferred income taxes in the balance sheets | $ | 2,071 | $ | 1,885 | ||||
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2005 | 2004 | 2003 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income tax, net of federal deduction | 4.2 | 4.0 | 3.5 | |||||||||
Non-deductible book depreciation | 1.1 | 1.1 | 1.2 | |||||||||
Differences in prior years’ deferred and current tax rates | (4.1 | ) | (0.8 | ) | (0.9 | ) | ||||||
Other | (1.3 | ) | (1.0 | ) | (1.6 | ) | ||||||
Effective income tax rate | 34.9 | % | 38.3 | % | 37.2 | % | ||||||
6. | FINANCING |
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 29,044 | ||
Net income | (66 | ) | ||
Total fair value | $ | 28,978 | ||
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Weighted Average | Fair | |||||||||||
Fixed | Value | |||||||||||
Rate | Notional | Gain/ | ||||||||||
Maturity | Paid | Amount | (Loss) | |||||||||
(in millions) | ||||||||||||
2006 | 1.89 | $ | 195 | $ | 2.5 | |||||||
2007 | 2.01 | * | 536 | 7.3 | ||||||||
2016 | 4.82 | 300 | 3.0 | |||||||||
2016 | 4.42 | 300 | 12.5 | |||||||||
* | Hedged using the Bond Market Association Municipal Swap Index. |
7. | COMMITMENTS |
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Commitments | ||||||||||||
Non- | ||||||||||||
Year | Affiliated | Affiliated | Total | |||||||||
(in millions) | ||||||||||||
2006 | $ | 50 | $ | 37 | $ | 87 | ||||||
2007 | 50 | 38 | 88 | |||||||||
2008 | 50 | 39 | 89 | |||||||||
2009 | 50 | 40 | 90 | |||||||||
2010 | 12 | 23 | 35 | |||||||||
2011 and thereafter | — | 2 | 2 | |||||||||
Total commitments | $ | 212 | $ | 179 | $ | 391 | ||||||
Natural | Nuclear | |||||||||||
Year | Gas | Coal | Fuel | |||||||||
(in millions) | ||||||||||||
2006 | $ | 545 | $ | 1,065 | $ | 18 | ||||||
2007 | 269 | 1,027 | 11 | |||||||||
2008 | 145 | 524 | 9 | |||||||||
2009 | 26 | 442 | 3 | |||||||||
2010 | 19 | 422 | 6 | |||||||||
2011 and thereafter | 89 | 324 | 26 | |||||||||
Total commitments | $ | 1,093 | $ | 3,804 | $ | 73 | ||||||
Rail | Vehicles | |||||||||||
Year | Cars | & Other | Total | |||||||||
(in millions) | ||||||||||||
2006 | $ | 16.2 | $ | 7.4 | $ | 23.6 | ||||||
2007 | 8.9 | 6.1 | 15.0 | |||||||||
2008 | 8.6 | 4.9 | 13.5 | |||||||||
2009 | 4.8 | 4.6 | 9.4 | |||||||||
2010 | 3.5 | 4.1 | 7.6 | |||||||||
2011 and thereafter | 24.0 | 5.1 | 29.1 | |||||||||
Total minimum payments | $ | 66.0 | $ | 32.2 | $ | 98.2 | ||||||
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8. | STOCK OPTION PLAN |
Shares | Average | |||||||
Subject | Option Price | |||||||
to Option | per Share | |||||||
Balance at December 31, 2002 | 5,693,923 | $ | 19.72 | |||||
Options granted | 1,201,469 | 27.98 | ||||||
Options canceled | (6,726 | ) | 23.11 | |||||
Options exercised | (1,043,013 | ) | 16.16 | |||||
Balance at December 31, 2003 | 5,845,653 | 22.05 | ||||||
Options granted | 1,168,140 | 29.50 | ||||||
Options canceled | (3,379 | ) | 28.82 | |||||
Options exercised | (1,252,277 | ) | 18.07 | |||||
Balance at December 31, 2004 | 5,758,137 | 24.42 | ||||||
Options granted | 1,180,491 | 32.70 | ||||||
Options canceled | (1,973 | ) | 30.10 | |||||
Options exercised | (1,708,670 | ) | 21.95 | |||||
Balance at December 31, 2005 | 5,227,985 | $ | 27.09 | |||||
Options exercisable: | ||||||||
At December 31, 2003 | 3,171,383 | |||||||
At December 31, 2004 | 3,404,264 | |||||||
At December 31, 2005 | 2,943,134 | |||||||
Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares (in thousands) | 700 | 2,266 | 2,262 | |||||||||
Average remaining life (in years) | 4.3 | 6.3 | 8.6 | |||||||||
Average exercise price | $ | 17.30 | $ | 26.05 | $ | 31.17 | ||||||
Exercisable: | ||||||||||||
Shares (in thousands) | 700 | 1,897 | 346 | |||||||||
Average exercise price | $ | 17.30 | $ | 25.68 | $ | 29.59 | ||||||
9. | NUCLEAR INSURANCE |
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10. | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
Net Income | ||||||||||||
After | ||||||||||||
Dividends | ||||||||||||
Quarter | Operating | Operating | on Preferred | |||||||||
Ended | Revenues | Income | Stock | |||||||||
(in millions) | ||||||||||||
March 2005 | $ | 970 | $ | 157 | $ | 93 | ||||||
June 2005 | 1,086 | 253 | 122 | |||||||||
September 2005 | 1,458 | 443 | 236 | |||||||||
December 2005 | 1,134 | 161 | 57 | |||||||||
March 2004 | $ | 960 | $ | 202 | $ | 91 | ||||||
June 2004 | 1,059 | 239 | 104 | |||||||||
September 2004 | 1,246 | 415 | 220 | |||||||||
December 2004 | 971 | 164 | 66 | |||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) | $ | 4,647,824 | $ | 4,235,991 | $ | 3,960,161 | $ | 3,710,533 | $ | 3,586,390 | ||||||||||
Net Income after Dividends on Preferred Stock (in thousands) | $ | 507,895 | $ | 481,171 | $ | 472,810 | $ | 461,355 | $ | 386,729 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 409,900 | $ | 437,300 | $ | 430,200 | $ | 431,000 | $ | 393,900 | ||||||||||
Return on Average Common Equity (percent) | 13.72 | 13.53 | 13.75 | 13.80 | 11.89 | |||||||||||||||
Total Assets (in thousands) | $ | 13,689,907 | $ | 12,781,525 | $ | 12,099,575 | $ | 11,591,666 | $ | 11,303,605 | ||||||||||
Gross Property Additions (in thousands) | $ | 890,062 | $ | 786,298 | $ | 661,154 | $ | 645,262 | $ | 635,540 | ||||||||||
Capitalization (in thousands) : | ||||||||||||||||||||
Common stock equity | $ | 3,792,726 | $ | 3,610,204 | $ | 3,500,660 | $ | 3,377,740 | $ | 3,310,877 | ||||||||||
Preferred stock | 465,046 | 465,047 | 372,512 | 247,512 | 317,512 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 300,000 | 300,000 | 347,000 | |||||||||||||||
Long-term debt payable to affiliated trusts | 309,279 | 309,279 | — | — | — | |||||||||||||||
Long-term debt | 3,560,186 | 3,855,257 | 3,377,148 | 2,872,609 | 3,742,346 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 8,127,237 | $ | 8,239,787 | $ | 7,550,320 | $ | 6,797,861 | $ | 7,717,735 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 46.7 | 43.8 | 46.4 | 49.7 | 42.9 | |||||||||||||||
Preferred stock | 5.7 | 5.6 | 4.9 | 3.6 | 4.1 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 4.0 | 4.4 | 4.5 | |||||||||||||||
Long-term debt payable to affiliated trusts | 3.8 | 3.8 | — | — | — | |||||||||||||||
Long-term debt | 43.8 | 46.8 | 44.7 | 42.3 | 48.5 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
First Mortgage Bonds — | ||||||||||||||||||||
Moody’s | A1 | A1 | A1 | A1 | A1 | |||||||||||||||
Standard and Poor’s | A+ | A | A | A | A | |||||||||||||||
Fitch | AA- | AA- | A+ | A+ | A+ | |||||||||||||||
Preferred Stock — | ||||||||||||||||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
Fitch | A | A | A- | A- | A- | |||||||||||||||
Unsecured Long-Term Debt — | ||||||||||||||||||||
Moody’s | A2 | A2 | A2 | A2 | A2 | |||||||||||||||
Standard and Poor’s | A | A | A | A | A | |||||||||||||||
Fitch | A+ | A+ | A | A | A | |||||||||||||||
Customers (year-end) : | ||||||||||||||||||||
Residential | 1,184,406 | 1,170,814 | 1,160,129 | 1,148,645 | 1,139,542 | |||||||||||||||
Commercial | 212,546 | 208,547 | 204,561 | 203,017 | 196,617 | |||||||||||||||
Industrial | 5,492 | 5,260 | 5,032 | 4,874 | 4,728 | |||||||||||||||
Other | 759 | 753 | 757 | 789 | 751 | |||||||||||||||
Total | 1,403,203 | 1,385,374 | 1,370,479 | 1,357,325 | 1,341,638 | |||||||||||||||
Employees(year-end) | 6,621 | 6,745 | 6,730 | 6,715 | 6,706 | |||||||||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) : | ||||||||||||||||||||
Residential | $ | 1,476,211 | $ | 1,346,669 | $ | 1,276,800 | $ | 1,264,431 | $ | 1,138,499 | ||||||||||
Commercial | 1,062,341 | 980,771 | 913,697 | 882,669 | 829,760 | |||||||||||||||
Industrial | 1,065,124 | 948,528 | 844,538 | 788,037 | 763,934 | |||||||||||||||
Other | 17,745 | 16,860 | 16,428 | 16,080 | 15,480 | |||||||||||||||
Total retail | 3,621,421 | 3,292,828 | 3,051,463 | 2,951,217 | 2,747,673 | |||||||||||||||
Sales for resale — non-affiliates | 551,408 | 483,839 | 487,456 | 474,291 | 485,974 | |||||||||||||||
Sales for resale — affiliates | 288,956 | 308,312 | 277,287 | 188,163 | 245,189 | |||||||||||||||
Total revenues from sales of electricity | 4,461,785 | 4,084,979 | 3,816,206 | 3,613,671 | 3,478,836 | |||||||||||||||
Other revenues | 186,039 | 151,012 | 143,955 | 96,862 | 107,554 | |||||||||||||||
Total | $ | 4,647,824 | $ | 4,235,991 | $ | 3,960,161 | $ | 3,710,533 | $ | 3,586,390 | ||||||||||
Kilowatt-Hour Sales (in thousands) : | ||||||||||||||||||||
Residential | 18,073,783 | 17,368,321 | 16,959,566 | 17,402,645 | 15,880,971 | |||||||||||||||
Commercial | 14,061,650 | 13,822,926 | 13,451,757 | 13,362,631 | 12,798,711 | |||||||||||||||
Industrial | 23,349,769 | 22,854,399 | 21,593,519 | 21,102,568 | 20,460,022 | |||||||||||||||
Other | 198,715 | 198,253 | 203,178 | 205,346 | 198,102 | |||||||||||||||
Total retail | 55,683,917 | 54,243,899 | 52,208,020 | 52,073,190 | 49,337,806 | |||||||||||||||
Sales for resale — non-affiliates | 15,442,728 | 15,483,420 | 17,085,376 | 15,553,545 | 15,277,839 | |||||||||||||||
Sales for resale — affiliates | 5,735,429 | 7,233,880 | 9,422,301 | 8,844,050 | 8,843,094 | |||||||||||||||
Total | 76,862,074 | 76,961,199 | 78,715,697 | 76,470,785 | 73,458,739 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents) : | ||||||||||||||||||||
Residential | 8.17 | 7.75 | 7.53 | 7.27 | 7.17 | |||||||||||||||
Commercial | 7.55 | 7.10 | 6.79 | 6.61 | 6.48 | |||||||||||||||
Industrial | 4.56 | 4.15 | 3.91 | 3.73 | 3.73 | |||||||||||||||
Total retail | 6.50 | 6.07 | 5.84 | 5.67 | 5.57 | |||||||||||||||
Sales for resale | 3.97 | 3.49 | 2.88 | 2.72 | 3.03 | |||||||||||||||
Total sales | 5.80 | 5.31 | 4.85 | 4.73 | 4.74 | |||||||||||||||
Residential Average Annual Kilowatt-Hour Use Per Customer | 15,347 | 14,894 | 14,688 | 15,198 | 13,981 | |||||||||||||||
Residential Average Annual Revenue Per Customer | $ | 1,253 | $ | 1,155 | $ | 1,106 | $ | 1,104 | $ | 1,002 | ||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 12,216 | 12,216 | 12,174 | 12,153 | 12,153 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts) : | ||||||||||||||||||||
Winter | 9,812 | 9,556 | 10,409 | 9,423 | 9,300 | |||||||||||||||
Summer | 11,162 | 10,938 | 10,462 | 10,910 | 10,241 | |||||||||||||||
Annual Load Factor (percent) | 63.2 | 63.2 | 64.1 | 62.9 | 62.5 | |||||||||||||||
Plant Availability (percent) : | ||||||||||||||||||||
Fossil-steam | 90.5 | 87.8 | 85.9 | 85.8 | 87.1 | |||||||||||||||
Nuclear | 92.9 | 88.7 | 94.7 | 93.2 | 83.7 | |||||||||||||||
Source of Energy Supply (percent) : | ||||||||||||||||||||
Coal | 59.5 | 56.5 | 56.5 | 55.5 | 56.8 | |||||||||||||||
Nuclear | 17.2 | 16.4 | 17.0 | 17.1 | 15.8 | |||||||||||||||
Hydro | 5.6 | 5.6 | 7.0 | 5.1 | 5.1 | |||||||||||||||
Gas | 6.8 | 8.9 | 7.6 | 11.6 | 10.7 | |||||||||||||||
Purchased power — | ||||||||||||||||||||
From non-affiliates | 3.8 | 5.4 | 4.1 | 4.0 | 4.4 | |||||||||||||||
From affiliates | 7.1 | 7.2 | 7.8 | 6.7 | 7.2 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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February 27, 2006
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Key Performance Indicator | 2005 Target Performance | 2005 Actual Performance | ||
Customer Satisfaction | Top quartile in customer surveys | Top quartile | ||
Peak Season EFOR | 2.75% or less | 1.42% | ||
Net Income | $678 million | $715 million |
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Increase (Decrease) | ||||||||||||||||
Amount | From Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in millions) | ||||||||||||||||
Operating revenues | $ | 6,634 | $ | 1,263 | $ | 457 | $ | 92 | ||||||||
Fuel | 1,831 | 598 | 128 | 101 | ||||||||||||
Purchased power | 1,170 | 194 | 200 | 92 | ||||||||||||
Other operation and maintenance | 1,481 | 81 | 153 | (78 | ) | |||||||||||
Depreciation and amortization | 504 | 229 | (74 | ) | (54 | ) | ||||||||||
Taxes other than income taxes | 260 | 32 | 15 | 11 | ||||||||||||
Total operating expenses | 5,246 | 1,134 | 422 | 72 | ||||||||||||
Operating income | 1,388 | 129 | 35 | 20 | ||||||||||||
Total other income and (expense) | (241 | ) | (20 | ) | 5 | 2 | ||||||||||
Income taxes | 431 | 52 | 13 | 9 | ||||||||||||
Net income | 716 | 57 | 27 | 13 | ||||||||||||
Dividends on preferred stock | 1 | — | — | — | ||||||||||||
Net income after dividends on preferred stock | $ | 715 | $ | 57 | $ | 27 | $ | 13 | ||||||||
Amount | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Retail – prior year | $ | 4,777 | $ | 4,310 | $ | 4,288 | ||||||
Change in - | ||||||||||||
Base rates | 195 | — | — | |||||||||
Sales growth | 135 | 151 | 30 | |||||||||
Weather | 21 | 32 | (66 | ) | ||||||||
Fuel cost recovery and other | 515 | 284 | 58 | |||||||||
Retail – current year | $ | 5,643 | 4,777 | 4,310 | ||||||||
Sales for resale - | ||||||||||||
Non-affiliates | 519 | 247 | 260 | |||||||||
Affiliates | 265 | 166 | 175 | |||||||||
Total sales for resale | 784 | 413 | 435 | |||||||||
Other operating revenues | 207 | 181 | 169 | |||||||||
Total operating revenues | $ | 6,634 | $ | 5,371 | $ | 4,914 | ||||||
Percent change | 23.5 | % | 9.3 | % | 1.9 | % | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Unit power sales — | ||||||||||||
Capacity | $ | 33 | $ | 31 | $ | 34 | ||||||
Energy | 31 | 33 | 31 | |||||||||
Other power sales — | ||||||||||||
Capacity and other | 155 | 75 | 93 | |||||||||
Energy | 300 | 108 | 102 | |||||||||
Total | $ | 519 | $ | 247 | $ | 260 | ||||||
KWH | Percent Change | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in billions) | ||||||||||||||||
Residential | 23.6 | 2.9 | % | 5.3 | % | (1.7 | )% | |||||||||
Commercial | 29.8 | 6.3 | 4.0 | (0.1 | ) | |||||||||||
Industrial | 25.0 | (5.0 | ) | 2.5 | (0.1 | ) | ||||||||||
Other | 0.6 | (0.1 | ) | 1.1 | 0.4 | |||||||||||
Total retail | 79.0 | 1.4 | 3.8 | (0.5 | ) | |||||||||||
Sales for resale - | ||||||||||||||||
Non-affiliates | 11.2 | 88.2 | (32.5 | ) | 9.5 | |||||||||||
Affiliates | 4.9 | 1.5 | (18.2 | ) | 47.5 | |||||||||||
Total sales for resale | 16.1 | 49.6 | (26.8 | ) | 22.0 | |||||||||||
Total sales | 95.1 | 7.2 | (1.2 | ) | 2.6 | |||||||||||
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2005 | 2004 | 2003 | ||||||||||
Total generation (billions of KWH) | 80.5 | 71.5 | 73.1 | |||||||||
Sources of generation (percent) — | ||||||||||||
Coal | 75.3 | 75.4 | 75.4 | |||||||||
Nuclear | 18.6 | 22.5 | 21.6 | |||||||||
Hydro | 2.4 | 2.0 | 2.7 | |||||||||
Oil and gas | 3.7 | 0.1 | 0.3 | |||||||||
Average cost of fuel per net KWH generated (cents) — | 2.04 | 1.55 | 1.46 | |||||||||
Average cost of purchased power per net KWH (cents) — | 7.25 | 5.17 | 4.03 | |||||||||
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• | the transfer of Savannah Electric’s generating facilities and certification of the generating facilities as the Company’s assets; |
• | amendments to the Company’s Integrated Resource Plan to add the current Savannah Electric’s customers and generating facilities; |
• | the transfer of Savannah Electric’s assigned service territory to the Company; |
• | adoption of the Company’s service rules and regulations to the current Savannah Electric customers; |
• | new fuel rate and base rate schedules that would apply to the Company’s sale of electricity to the current Savannah Electric customers; |
• | adoption of a “merger transition adjustment” rate that would be used to more closely align Savannah Electric’s existing base rates to those of the Company and a “merger transition credit” rate that would credit the additional revenues collected from former Savannah Electric customers to the Company’s existing customers; and |
• | the issuance of additional shares of the Company’s common stock to Southern Company in exchange for Southern Company’s shares of Savannah Electric common stock. |
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. |
• | Changes in existing income tax regulations or changes in Internal Revenue Service interpretations of existing regulations. |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which the Company may be asserted to be a potentially responsible party. |
• | Identification and evaluation of other potential lawsuits or complaints in which the Company may be named as a defendant. |
• | Resolution or progression of existing matters through the legislative process, the court systems, or the EPA. |
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Expires | ||||||||||||||||
Total | Unused | 2006 | 2007 | 2010 | ||||||||||||
(in millions) | ||||||||||||||||
$780 | $ | 778 | $ | 70 | $ | 350 | $ | 360 |
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Changes in Fair Value | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Contracts beginning of year | $ | 5.8 | $ | 3.2 | ||||
Contracts realized or settled | (40.0 | ) | (12.2 | ) | ||||
Current period changes (a) | 60.8 | 14.8 | ||||||
Contracts end of year | $ | 26.6 | $ | 5.8 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | Year 1 | 1-3 Years | ||||||||||
(in millions) | ||||||||||||
Actively quoted | $ | 26.8 | $ | 16.4 | $ | 10.4 | ||||||
External sources | (0.2 | ) | (0.2 | ) | — | |||||||
Contracts end of year | $ | 26.6 | $ | 16.2 | $ | 10.4 | ||||||
Amounts | ||||
(in millions) | ||||
Regulatory liabilities, net | $ | 26.7 | ||
Net income | (0.1 | ) | ||
Total fair value | $ | 26.6 | ||
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2007- | 2009- | After | ||||||||||||||||||
2006 | 2008 | 2010 | 2010 | Total | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Long-term debt(a) — | ||||||||||||||||||||
Principal | $ | 153 | $ | 306 | $ | 282 | $ | 4,563 | $ | 5,304 | ||||||||||
Interest | 265 | 496 | 468 | 4,989 | 6,218 | |||||||||||||||
Preferred stock | 15 | — | — | — | 15 | |||||||||||||||
Commodity derivative obligations(b) | 12 | — | — | — | 12 | |||||||||||||||
Operating leases | 34 | 58 | 44 | 58 | 194 | |||||||||||||||
Purchase commitments(c) — | ||||||||||||||||||||
Capital(d) | 1,251 | 2,738 | 2,421 | — | 6,410 | |||||||||||||||
Coal | 1,579 | 2,220 | 694 | 40 | 4,533 | |||||||||||||||
Nuclear fuel | 44 | 42 | 25 | 64 | 175 | |||||||||||||||
Natural gas(e) | 577 | 525 | 511 | 2,047 | 3,660 | |||||||||||||||
Purchased power | 343 | 689 | 559 | 994 | 2,585 | |||||||||||||||
Long-term service agreements | 7 | 18 | 24 | 144 | 193 | |||||||||||||||
Trusts(f) — | ||||||||||||||||||||
Nuclear decommissioning | 7 | 14 | 14 | 117 | 152 | |||||||||||||||
Postretirement benefits | 18 | 41 | — | — | 59 | |||||||||||||||
DOE assessments | 4 | — | — | — | 4 | |||||||||||||||
Total | $ | 4,309 | $ | 7,147 | $ | 5,042 | $ | 13,016 | $ | 29,514 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. Fixed rates include, where applicable, the effects of interest rate derivatives employed to manage interest risk. | |
(b) | For additional information see Notes 1 and 6 to the financial statements herein. | |
(c) | The Company generally does not enter into non-cancelable commitments for other operations and maintenance expenditures. Total other operations and maintenance expenses for the last three years were $1.5 billion, $1.4 billion, and $1.2 billion, respectively. | |
(d) | The Company forecasts capital expenditures over a five-year period. Amounts represent current estimates of total expenditures, excluding those amounts related to contractual purchase commitments for uranium and nuclear fuel conversion, enrichment, and fabrication services. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(e) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(f) | Projections of nuclear decommissioning trust contributions are based on the 2004 Retail Rate Plan. The Company forecasts postretirement trust contributions over a three-year period. No contributions related to the Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from the Company’s corporate assets. |
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• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, and implementation of the Energy Policy Act of 2005, and also changes in environmental, tax and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; |
• | current and future litigation, regulatory investigations, proceedings, or inquiries, including FERC matters and the pending EPA civil action against the Company; |
• | the effects, extent, and timing of the entry of additional competition in the markets in which the Company operates; |
• | variations in demand for electricity, including those relating to weather, the general economy and population, and business growth (and declines); |
• | available sources and costs of fuels; |
• | ability to control costs; |
• | investment performance of the Company’s employee benefit plans; |
• | advances in technology; |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases related to fuel cost recovery; |
• | internal restructuring or other restructuring options that may be pursued; |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to the Company; |
• | the ability of counterparties of the Company to make payments as and when due; |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; |
• | the direct or indirect effect on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; |
• | the ability of the Company to obtain additional generating capacity at competitive prices; |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, or other similar occurrences; |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; |
• | the effect of accounting pronouncements issued periodically by standard-setting bodies; and |
• | other factors discussed elsewhere herein and in other reports, including the Form 10-K, filed by the Company from time to time with the Securities and Exchange Commission. |
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 5,642,812 | $ | 4,776,985 | $ | 4,309,972 | ||||||
Sales for resale— | ||||||||||||
Non-affiliates | 519,673 | 246,545 | 259,376 | |||||||||
Affiliates | 264,989 | 166,245 | 174,855 | |||||||||
Other revenues | 206,729 | 181,033 | 169,304 | |||||||||
Total operating revenues | 6,634,203 | 5,370,808 | 4,913,507 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 1,830,829 | 1,232,496 | 1,103,963 | |||||||||
Purchased power— | ||||||||||||
Non-affiliates | 408,563 | 304,978 | 258,621 | |||||||||
Affiliates | 761,466 | 671,098 | 516,944 | |||||||||
Other operations | 949,722 | 902,167 | 827,972 | |||||||||
Maintenance | 531,168 | 498,114 | 419,206 | |||||||||
Depreciation and amortization | 504,248 | 275,488 | 349,984 | |||||||||
Taxes other than income taxes | 259,825 | 227,806 | 212,827 | |||||||||
Total operating expenses | 5,245,821 | 4,112,147 | 3,689,517 | |||||||||
Operating Income | 1,388,382 | 1,258,661 | 1,223,990 | |||||||||
Other Income and (Expense): | ||||||||||||
Allowance for equity funds used during construction | 26,808 | 26,659 | 10,752 | |||||||||
Interest income | 6,281 | 6,657 | 15,625 | |||||||||
Interest expense, net of amounts capitalized | (221,199 | ) | (182,370 | ) | (182,583 | ) | ||||||
Interest expense to affiliate trusts | (59,510 | ) | (44,565 | ) | — | |||||||
Distributions on mandatorily redeemable preferred securities | — | (15,839 | ) | (59,675 | ) | |||||||
Other income (expense), net | 5,742 | (11,362 | ) | (10,551 | ) | |||||||
Total other income and (expense) | (241,878 | ) | (220,820 | ) | (226,432 | ) | ||||||
Earnings Before Income Taxes | 1,146,504 | 1,037,841 | 997,558 | |||||||||
Income taxes | 430,812 | 379,170 | 366,311 | |||||||||
Net Income | 715,692 | 658,671 | 631,247 | |||||||||
Dividends on Preferred Stock | 693 | 670 | 670 | |||||||||
Net Income After Dividends on Preferred Stock | $ | 714,999 | $ | 658,001 | $ | 630,577 | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 715,692 | $ | 658,671 | $ | 631,247 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 592,264 | 361,958 | 424,321 | |||||||||
Deferred income taxes and investment tax credits, net | 231,708 | 251,623 | 199,265 | |||||||||
Deferred expenses - affiliates | 1,268 | (10,563 | ) | (7,399 | ) | |||||||
Allowance for equity funds used during construction | (26,808 | ) | (26,659 | ) | (10,752 | ) | ||||||
Pension, postretirement, and other employee benefits | (19,468 | ) | (15,868 | ) | (30,225 | ) | ||||||
Tax benefit of stock options | 15,711 | 9,701 | 11,649 | |||||||||
Other, net | (11,068 | ) | (19,764 | ) | 18,929 | |||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (591,498 | ) | (227,204 | ) | (4,395 | ) | ||||||
Fossil fuel stock | 2,528 | (46,730 | ) | (17,490 | ) | |||||||
Materials and supplies | (53,942 | ) | 618 | (7,677 | ) | |||||||
Prepaid income taxes | (43,626 | ) | 14,358 | (3,951 | ) | |||||||
Other current assets | 4,108 | (23,672 | ) | 1,599 | ||||||||
Accounts payable | 110,118 | 132,001 | (62,553 | ) | ||||||||
Accrued taxes | 85,098 | (64,563 | ) | 52,348 | ||||||||
Accrued compensation | 3,822 | (6,664 | ) | (3,111 | ) | |||||||
Other current liabilities | 33,289 | 5,836 | 19,845 | |||||||||
Net cash provided from operating activities | 1,049,196 | 993,079 | 1,211,650 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (842,870 | ) | (741,151 | ) | (717,993 | ) | ||||||
Nuclear decommissioning trust fund purchases | (381,235 | ) | (541,048 | ) | (656,806 | ) | ||||||
Nuclear decommissioning trust fund sales | 372,536 | 532,349 | 648,107 | |||||||||
Purchase of property from affiliates | — | (339,750 | ) | (2 | ) | |||||||
Cost of removal net of salvage | (29,428 | ) | (21,756 | ) | (28,265 | ) | ||||||
Change in construction payables, net of joint owner portion | 4,037 | 413 | (32,223 | ) | ||||||||
Other | (315 | ) | (4,961 | ) | 1,008 | |||||||
Net cash used for investing activities | (877,275 | ) | (1,115,904 | ) | (786,174 | ) | ||||||
Financing Activities: | ||||||||||||
Increase (decrease) in notes payable, net | 59,509 | 70,956 | (220,400 | ) | ||||||||
Proceeds— | ||||||||||||
Senior notes | 625,000 | 600,000 | 1,000,000 | |||||||||
Pollution control bonds | 185,000 | — | — | |||||||||
Mandatorily redeemable preferred securities | — | 200,000 | — | |||||||||
Capital contributions from parent company | 149,034 | 260,068 | 40,809 | |||||||||
Redemptions— | ||||||||||||
Pollution control bonds | (185,000 | ) | — | — | ||||||||
Senior notes | (450,000 | ) | (200,000 | ) | (665,000 | ) | ||||||
Mandatorily redeemable preferred securities | — | (200,000 | ) | — | ||||||||
Payment of preferred stock dividends | (546 | ) | (654 | ) | (696 | ) | ||||||
Payment of common stock dividends | (556,100 | ) | (565,500 | ) | (565,800 | ) | ||||||
Other | (21,679 | ) | (17,247 | ) | (22,563 | ) | ||||||
Net cash provided from (used for) financing activities | (194,782 | ) | 147,623 | (433,650 | ) | |||||||
Net Change in Cash and Cash Equivalents | (22,861 | ) | 24,798 | (8,174 | ) | |||||||
Cash and Cash Equivalents at Beginning of Year | 33,497 | 8,699 | 16,873 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 10,636 | $ | 33,497 | $ | 8,699 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for— | ||||||||||||
Interest (net of $10,871, $8,920, and $5,428 capitalized, respectively) | $ | 250,445 | $ | 228,190 | $ | 215,463 | ||||||
Income taxes (net of refunds) | 207,973 | 127,115 | 145,048 | |||||||||
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Assets | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 10,636 | $ | 33,497 | ||||
Receivables— | ||||||||
Customer accounts receivable | 418,154 | 317,937 | ||||||
Unbilled revenues | 141,875 | 140,027 | ||||||
Under recovered regulatory clause revenues | 454,683 | 345,542 | ||||||
Other accounts and notes receivable | 110,397 | 94,377 | ||||||
Affiliated companies | 84,597 | 17,042 | ||||||
Accumulated provision for uncollectible accounts | (8,647 | ) | (7,100 | ) | ||||
Fossil fuel stock, at average cost | 181,739 | 184,267 | ||||||
Vacation pay | 59,190 | 57,372 | ||||||
Materials and supplies, at average cost | 323,908 | 270,422 | ||||||
Prepaid expenses | 70,825 | 32,695 | ||||||
Other | 50,248 | 28,262 | ||||||
Total current assets | 1,897,605 | 1,514,340 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 19,603,249 | 18,681,533 | ||||||
Less accumulated provision for depreciation | 7,575,926 | 7,217,607 | ||||||
12,027,323 | 11,463,926 | |||||||
Nuclear fuel, at amortized cost | 134,798 | 124,745 | ||||||
Construction work in progress | 563,155 | 766,140 | ||||||
Total property, plant, and equipment | 12,725,276 | 12,354,811 | ||||||
Other Property and Investments: | ||||||||
Equity investments in unconsolidated subsidiaries | 68,188 | 66,192 | ||||||
Nuclear decommissioning trusts, at fair value | 486,591 | 459,194 | ||||||
Other | 71,468 | 64,571 | ||||||
Total other property and investments | 626,247 | 589,957 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 500,882 | 505,664 | ||||||
Prepaid pension costs | 476,458 | 450,270 | ||||||
Deferred under recovered regulatory clause revenues | 295,116 | — | ||||||
Other regulatory assets | 330,483 | 246,462 | ||||||
Other | 195,716 | 160,834 | ||||||
Total deferred charges and other assets | 1,798,655 | 1,363,230 | ||||||
Total Assets | $ | 17,047,783 | $ | 15,822,338 | ||||
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Liabilities and Stockholder’s Equity | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Liabilities: | ||||||||
Securities due within one year | $ | 167,317 | $ | 452,498 | ||||
Notes payable | 267,743 | 208,233 | ||||||
Accounts payable — | ||||||||
Affiliated | 285,019 | 194,253 | ||||||
Other | 360,455 | 310,763 | ||||||
Customer deposits | 129,293 | 115,661 | ||||||
Accrued taxes — | ||||||||
Income taxes | 150,896 | 78,269 | ||||||
Other | 204,778 | 129,520 | ||||||
Accrued interest | 88,885 | 74,529 | ||||||
Accrued vacation pay | 45,602 | 44,894 | ||||||
Accrued compensation | 137,303 | 127,340 | ||||||
Other | 120,312 | 83,632 | ||||||
Total current liabilities | 1,957,603 | 1,819,592 | ||||||
Long-term Debt(See accompanying statements) | 4,179,218 | 3,709,852 | ||||||
Long-term Debt Payable to Affiliated Trusts(See accompanying statements) | 969,073 | 969,073 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 2,730,303 | 2,556,040 | ||||||
Deferred credits related to income taxes | 158,759 | 170,973 | ||||||
Accumulated deferred investment tax credits | 287,726 | 300,018 | ||||||
Employee benefit obligations | 358,137 | 331,002 | ||||||
Asset retirement obligations | 627,465 | 504,515 | ||||||
Other cost of removal obligations | 404,614 | 411,692 | ||||||
Other regulatory liabilities | 97,015 | 84,678 | ||||||
Other | 63,335 | 59,733 | ||||||
Total deferred credits and other liabilities | 4,727,354 | 4,418,651 | ||||||
Total Liabilities | 11,833,248 | 10,917,168 | ||||||
Preferred Stock(See accompanying statements) | — | 14,609 | ||||||
Common Stockholder’s Equity(See accompanying statements) | 5,214,535 | 4,890,561 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 17,047,783 | $ | 15,822,338 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long-Term Debt: | ||||||||||||||||
Long-term notes payable — | ||||||||||||||||
5.50% due December 1, 2005 | $ | — | $ | 150,000 | ||||||||||||
Variable rate (1.66% to 1.96% at 1/1/05) due 2005 | — | 300,000 | ||||||||||||||
6.20% due February 1, 2006 | 150,000 | 150,000 | ||||||||||||||
4.875% due July 15, 2007 | 300,000 | 300,000 | ||||||||||||||
4.10% due August 15, 2009 | 125,000 | 125,000 | ||||||||||||||
Variable rate (4.53% at 1/1/06) due 2009 | 150,000 | 150,000 | ||||||||||||||
4.00% to 6.00% due 2011-2045 | 1,850,000 | 1,225,000 | ||||||||||||||
Total long-term notes payable | 2,575,000 | 2,400,000 | ||||||||||||||
Other long-term debt — | ||||||||||||||||
Pollution control revenue bonds — non-collateralized: | ||||||||||||||||
2.83% to 5.45% due 2012-2034 | 812,560 | 812,560 | ||||||||||||||
Variable rate (2.82% to 3.08% at 1/1/06) due 2011-2032 | 873,330 | 873,330 | ||||||||||||||
Total other long-term debt | 1,685,890 | 1,685,890 | ||||||||||||||
Capitalized lease obligations | 74,484 | 76,982 | ||||||||||||||
Unamortized debt premium (discount), net | (3,448 | ) | (522 | ) | ||||||||||||
Total long-term debt (annual interest requirement — $205.5 million) | 4,331,926 | 4,162,350 | ||||||||||||||
Less amount due within one year | 152,708 | 452,498 | ||||||||||||||
Long-term debt excluding amount due within one year | 4,179,218 | 3,709,852 | 40.3 | % | 38.7 | % | ||||||||||
Long-term Debt Payable to Affiliated Trusts: | ||||||||||||||||
4.88% to 7.13% due 2042 (annual interest requirement — $59.5 million) | 969,073 | 969,073 | 9.4 | 10.1 | ||||||||||||
Cumulative Preferred Stock: | ||||||||||||||||
$100 stated value at 4.60% | ||||||||||||||||
Authorized — 5,000,000 shares | ||||||||||||||||
Outstanding — 145,689 shares (annual dividend requirement — $0.7 million) | 14,609 | 14,609 | ||||||||||||||
Less amount due within one year | 14,609 | — | ||||||||||||||
Total cumulative preferred stock excluding amount due within one year | — | 14,609 | 0.0 | 0.2 | ||||||||||||
Common Stockholder’s Equity: | ||||||||||||||||
Common stock, without par value — | ||||||||||||||||
Authorized — 15,000,000 shares | ||||||||||||||||
Outstanding — 7,761,500 shares | 344,250 | 344,250 | ||||||||||||||
Paid-in capital | 2,643,012 | 2,478,268 | ||||||||||||||
Retained earnings | 2,261,698 | 2,102,798 | ||||||||||||||
Accumulated other comprehensive income (loss) | (34,425 | ) | (34,755 | ) | ||||||||||||
Total common stockholder’s equity | 5,214,535 | 4,890,561 | 50.3 | 51.0 | ||||||||||||
Total Capitalization | $ | 10,362,826 | $ | 9,584,095 | 100.0 | % | 100.0 | % | ||||||||
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Other | ||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2002 | $ | 344,250 | $ | 2,156,080 | $ | 1,945,520 | $ | (11,403 | ) | $ | 4,434,447 | |||||||||
Net income after dividends on preferred stock | — | — | 630,577 | — | 630,577 | |||||||||||||||
Capital contributions from parent company | — | 52,458 | — | — | 52,458 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (11,471 | ) | (11,471 | ) | |||||||||||||
Cash dividends on common stock | — | — | (565,800 | ) | — | (565,800 | ) | |||||||||||||
Balance at December 31, 2003 | 344,250 | 2,208,538 | 2,010,297 | (22,874 | ) | 4,540,211 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 658,001 | — | 658,001 | |||||||||||||||
Capital contributions from parent company | — | 269,769 | — | — | 269,769 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (11,881 | ) | (11,881 | ) | |||||||||||||
Cash dividends on common stock | — | — | (565,500 | ) | — | (565,500 | ) | |||||||||||||
Other | — | (39 | ) | — | — | (39 | ) | |||||||||||||
Balance at December 31, 2004 | 344,250 | 2,478,268 | 2,102,798 | (34,755 | ) | 4,890,561 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 714,999 | — | 714,999 | |||||||||||||||
Capital contributions from parent company | — | 164,745 | — | — | 164,745 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 330 | 330 | |||||||||||||||
Cash dividends on common stock | — | — | (556,100 | ) | — | (556,100 | ) | |||||||||||||
Other | — | (1 | ) | 1 | — | — | ||||||||||||||
Balance at December 31, 2005 | $ | 344,250 | $ | 2,643,012 | $ | 2,261,698 | $ | (34,425 | ) | $ | 5,214,535 | |||||||||
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2005 | 2004 | 2003 | |||||||||||
(in thousands) | |||||||||||||
Net income after dividends on preferred stock | $ | 714,999 | $ | 658,001 | $ | 630,577 | |||||||
Other comprehensive income (loss): | |||||||||||||
Change in additional minimum pension liability, net of tax of $(1,981), $(3,861) and $(5,133), respectively | (3,140 | ) | (6,122 | ) | (8,138 | ) | |||||||
Change in fair value of marketable securities, net of tax of $317 and $(114) | 501 | (181 | ) | — | |||||||||
Changes in fair value of qualifying hedges, net of tax of $1,214, $(5,046) and $(3,241), respectively | 1,925 | (7,999 | ) | (5,550 | ) | ||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $848, $1,528 and $1,208, respectively | 1,044 | 2,421 | 2,217 | ||||||||||
Total other comprehensive income (loss) | 330 | (11,881 | ) | (11,471 | ) | ||||||||
Comprehensive Income | $ | 715,329 | $ | 646,120 | $ | 619,106 | |||||||
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1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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2005 | 2004 | Note | ||||||||||
(in millions) | ||||||||||||
Deferred income tax charges | $ | 501 | $ | 506 | (a | ) | ||||||
Premium on reacquired debt | 170 | 177 | (b | ) | ||||||||
Corporate building lease | 52 | 53 | (e | ) | ||||||||
Vacation pay | 59 | 57 | (d | ) | ||||||||
Postretirement benefits | 18 | 20 | (e | ) | ||||||||
DOE assessments | 6 | 10 | (c | ) | ||||||||
Generating plant outage costs | 46 | 40 | (g | ) | ||||||||
Other regulatory assets | 33 | 11 | (e | ) | ||||||||
Asset retirement obligation | 65 | (20 | ) | (a | ) | |||||||
Other cost of removal obligations | (404 | ) | (412 | ) | (a | ) | ||||||
Deferred income tax credits | (159 | ) | (171 | ) | (a | ) | ||||||
Environmental remediation | (19 | ) | (22 | ) | (f | ) | ||||||
Purchased power | (33 | ) | — | (f | ) | |||||||
Other regulatory liabilities | (30 | ) | (6 | ) | (e | ) | ||||||
Total | $ | 305 | $ | 243 | ||||||||
(a) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered, and deferred tax liabilities are amortized over the related property lives, which may range up to 60 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(b) | 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. | |
(c) | Assessments for the decontamination and decommissioning of the DOE’s nuclear fuel enrichment facilities are recorded annually from 1993 through 2006. | |
(d) | Recorded as earned by employees and recovered as paid, generally within one year. | |
(e) | Recorded and recovered or amortized as approved by the Georgia PSC. | |
(f) | Amortized over a three-year period ending in 2007. See Note 3 under “Retail Regulatory Matters — Rate Plans.” | |
(g) | See “Property, Plant, and Equipment” herein. |
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2005 | 2004 | |||||||
Generation | $ | 9,571 | $ | 9,002 | ||||
Transmission | 2,994 | 2,870 | ||||||
Distribution | 5,953 | 5,744 | ||||||
General | 1,057 | 1,038 | ||||||
Plant acquisition adjustment | 28 | 28 | ||||||
Total plant in service | $ | 19,603 | $ | 18,682 | ||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Balance beginning of year | $ | 505 | $ | 476 | ||||
Liabilities incurred | 91 | — | ||||||
Liabilities settled | (2 | ) | (2 | ) | ||||
Accretion | 33 | 31 | ||||||
Balance end of year | $ | 627 | $ | 505 | ||||
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Unrealized | Unrealized | Fair | ||||||||||
2005 | Gains | Losses | Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 76.7 | $ | (6.3 | ) | $ | 325.5 | |||||
Debt | 2.8 | (0.8 | ) | 135.3 | ||||||||
Other | — | — | 25.8 | |||||||||
Total | $ | 79.5 | $ | (7.1 | ) | $ | 486.6 |
Unrealized | Unrealized | Fair | ||||||||||
2004 | Gains | Losses | Value | |||||||||
(in millions) | ||||||||||||
Equity | $ | 68.7 | $ | (4.0 | ) | $ | 308.2 | |||||
Debt | 5.3 | (0.1 | ) | 138.0 | ||||||||
Other | — | — | 13.0 | |||||||||
Total | $ | 74.0 | $ | (4.1 | ) | $ | 459.2 |
Plant | Plant | |||||||
Hatch | Vogtle | |||||||
(in millions) | ||||||||
Amount expensed in 2005 | $ | — | $ | 7 | ||||
Accumulated provisions: | ||||||||
External trust funds, at fair value | $ | 313 | $ | 174 | ||||
Internal reserves | — | 1 | ||||||
Total | $ | 313 | $ | 175 | ||||
Plant | Plant | |||||||
Hatch | Vogtle | |||||||
Decommissioning periods: | ||||||||
Beginning year | 2034 | 2027 | ||||||
Completion year | 2065 | 2048 | ||||||
(in millions) | ||||||||
Site study costs: | ||||||||
Radiated structures | $ | 497 | $ | 452 | ||||
Non-radiated structures | 49 | 58 | ||||||
Total | $ | 546 | $ | 510 | ||||
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As | Options | Pro | ||||||||||
Net Income | Reported | Impact | Forma | |||||||||
(in millions) | ||||||||||||
2005 | $ | 715 | $ | (3 | ) | $ | 712 | |||||
2004 | $ | 658 | (3 | ) | $ | 655 | ||||||
2003 | $ | 631 | (4 | ) | $ | 627 |
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.90 | % | 3.10 | % | 2.70 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.90 | % | 19.60 | % | 23.60 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 |
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Carrying | Fair | |||||||
Amount | Value | |||||||
(in millions) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 5,227 | $ | 5,195 | ||||
2004 | $ | 5,055 | $ | 5,125 |
value of plan assets was as follows:
Projected Benefit Obligation | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 1,885 | $ | 1,727 | ||||
Service cost | 45 | 42 | ||||||
Interest cost | 106 | 101 | ||||||
Benefits paid | (85 | ) | (85 | ) | ||||
Plan amendments | 13 | 1 | ||||||
Actuarial loss | 91 | 99 | ||||||
Balance at end of year | $ | 2,055 | $ | 1,885 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 2,181 | $ | 2,055 | ||||
Actual return on plan assets | 339 | 207 | ||||||
Benefits paid | (80 | ) | (81 | ) | ||||
Balance at end of year | $ | 2,440 | $ | 2,181 | ||||
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Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Funded status | $ | 385 | $ | 295 | ||||
Unrecognized transition amount | (4 | ) | (8 | ) | ||||
Unrecognized prior service cost | 109 | 108 | ||||||
Unrecognized net actuarial gain (loss) | (54 | ) | 21 | |||||
Prepaid pension asset, net | $ | 436 | $ | 416 | ||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Prepaid pension asset | $ | 476 | $ | 450 | ||||
Employee benefit obligations | (96 | ) | (89 | ) | ||||
Other property and investments | 15 | 19 | ||||||
Accumulated other comprehensive income | 41 | 36 | ||||||
Prepaid pension asset, net | $ | 436 | $ | 416 | ||||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 45 | $ | 42 | $ | 38 | ||||||
Interest cost | 106 | 101 | 100 | |||||||||
Expected return on plan assets | (182 | ) | (180 | ) | (179 | ) | ||||||
Recognized net (gain)/loss | 3 | (5 | ) | (19 | ) | |||||||
Net amortization | 7 | 7 | 6 | |||||||||
Net pension (income) | $ | (21 | ) | $ | (35 | ) | $ | (54 | ) | |||
Benefit | ||||
Payments | ||||
(in millions) | ||||
2006 | $ | 88 | ||
2007 | 91 | |||
2008 | 94 | |||
2009 | 97 | |||
2010 | 102 | |||
2011 to 2015 | $ | 607 | ||
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Accumulated | ||||||||
Benefit Obligation | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 726 | $ | 723 | ||||
Service cost | 10 | 10 | ||||||
Interest cost | 41 | 41 | ||||||
Benefits paid | (32 | ) | (31 | ) | ||||
Actuarial loss | 24 | 42 | ||||||
Plan amendments | — | (59 | ) | |||||
Balance at end of year | $ | 769 | $ | 726 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 299 | $ | 265 | ||||
Actual return on plan assets | 38 | 32 | ||||||
Employer contributions | 40 | 33 | ||||||
Benefits paid | (32 | ) | (31 | ) | ||||
Balance at end of year | $ | 345 | $ | 299 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 43 | % | 43 | % | 42 | % | ||||||
International equity | 21 | 22 | 23 | |||||||||
Domestic fixed income | 19 | 19 | 19 | |||||||||
Global fixed income | 11 | 11 | 11 | |||||||||
Real estate | 4 | 3 | 3 | |||||||||
Private equity | 2 | 2 | 2 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Funded status | $ | (424 | ) | $ | (428 | ) | ||
Unrecognized transition obligation | 70 | 78 | ||||||
Unrecognized prior service cost | 25 | 27 | ||||||
Unrecognized net loss | 203 | 203 | ||||||
Fourth quarter contributions | 21 | 15 | ||||||
Employee benefit obligations recognized in the balance sheets | $ | (105 | ) | $ | (105 | ) | ||
2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Service cost | $ | 10 | $ | 10 | $ | 9 | ||||||
Interest cost | 41 | 41 | 40 | |||||||||
Expected return on plan assets | (22 | ) | (25 | ) | (24 | ) | ||||||
Net amortization | 18 | 18 | 16 | |||||||||
Net postretirement cost | $ | 47 | $ | 44 | $ | 41 | ||||||
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Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in millions) | ||||||||||||
2006 | $ | 37 | $ | (3 | ) | $ | 34 | |||||
2007 | 39 | (4 | ) | 35 | ||||||||
2008 | 42 | (4 | ) | 38 | ||||||||
2009 | 46 | (4 | ) | 42 | ||||||||
2010 | 50 | (5 | ) | 45 | ||||||||
2011 to 2015 | 280 | (34 | ) | 246 | ||||||||
2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | 3.50 | 3.75 | |||||||||
Long-term return on plan assets | 8.50 | 8.50 | 8.50 | |||||||||
1 Percent | 1 Percent | |||||||||||
Increase | Decrease | |||||||||||
(in millions) | ||||||||||||
Benefit obligation | $ | 70 | $ | 62 | ||||||||
Service and interest costs | 5 | 4 | ||||||||||
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• | the transfer of Savannah Electric’s generating facilities and certification of the generating facilities as the Company’s assets; | |
• | amendments to the Company’s Integrated Resource Plan to add the current Savannah Electric’s customers and generating facilities; | |
• | the transfer of Savannah Electric’s assigned service territory to the Company; | |
• | adoption of the Company’s service rules and regulations to the current Savannah Electric customers; | |
• | new fuel rate and base rate schedules that would apply to the Company’s sale of electricity to the current Savannah Electric customers; | |
• | adoption of a “merger transition adjustment” rate that would be used to more closely align Savannah Electric’s existing base rates to those of the Company and a “merger transition credit” rate that would credit the additional revenues collected from former Savannah Electric customers to the Company’s existing customers; and | |
• | the issuance of additional shares of the Company’s common stock to Southern Company in exchange for Southern Company’s shares of Savannah Electric common stock. |
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Energy | $ | 54 | $ | 51 | $ | 55 | ||||||
Capacity | 38 | 36 | 34 | |||||||||
Total | $ | 92 | $ | 87 | $ | 89 | ||||||
Company | Accumulated | |||||||||||
Facility (Type) | Ownership | Investment | Depreciation | |||||||||
(in millions) | ||||||||||||
Plant Vogtle (nuclear) | 45.7 | % | $ | 3,311 | * | $ | 1,809 | |||||
Plant Hatch (nuclear) | 50.1 | 935 | 492 | |||||||||
Plant Wansley (coal) | 53.5 | 395 | 172 | |||||||||
Plant Scherer (coal) | ||||||||||||
Units 1 and 2 | 8.4 | 115 | 56 | |||||||||
Unit 3 | 75.0 | 562 | 270 | |||||||||
Plant McIntosh CC (combined cycle) | 83.9 | 436 | 7 | |||||||||
Plant McIntosh Common Facilities (combustion-turbine) | 75.0 | 27 | 5 | |||||||||
Rocky Mountain (pumped storage) | 25.4 | 169 | * | 92 | ||||||||
Intercession City (combustion-turbine) | 33.3 | 12 | 2 | |||||||||
* Investment includes write-offs |
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2005 | 2004 | 2003 | ||||||||||
(in millions) | ||||||||||||
Total provision for income taxes: | ||||||||||||
Federal: | ||||||||||||
Current | $ | 173 | $ | 116 | $ | 143 | ||||||
Deferred | 203 | 221 | 181 | |||||||||
376 | 337 | 324 | ||||||||||
State: | ||||||||||||
Current | 26 | 12 | 24 | |||||||||
Deferred | 29 | 30 | 16 | |||||||||
Deferred investment tax credits | — | — | 2 | |||||||||
Total | $ | 431 | $ | 379 | $ | 366 | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 2,177 | $ | 2,050 | ||||
Property basis differences | 558 | 577 | ||||||
Employee benefit obligations | 163 | 149 | ||||||
Fuel clause under recovery | 305 | 141 | ||||||
Premium on reacquired debt | 69 | 72 | ||||||
Storm damage reserve | 13 | 6 | ||||||
Other | 74 | 81 | ||||||
Total | 3,359 | 3,076 | ||||||
Deferred tax assets: | ||||||||
Federal effect of state deferred taxes | 116 | 106 | ||||||
Other property basis differences | 139 | 147 | ||||||
Other deferred costs | 126 | 94 | ||||||
Employee benefit obligations | 51 | 55 | ||||||
Other comprehensive income | 23 | 22 | ||||||
Unbilled revenue | 13 | 11 | ||||||
Other | 33 | 19 | ||||||
Total | 501 | 454 | ||||||
Total deferred tax liabilities, net | 2,858 | 2,622 | ||||||
Portion included in current (liabilities) assets, net | (128 | ) | (66 | ) | ||||
Accumulated deferred income taxes in the balance sheets | $ | 2,730 | $ | 2,556 | ||||
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2005 | 2004 | 2003 | ||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State income tax, net of federal deduction | 3 | 3 | 3 | |||||||||
Non-deductible book depreciation | 1 | 1 | 1 | |||||||||
Other | (1 | ) | (2 | ) | (2 | ) | ||||||
Effective income tax rate | 38 | % | 37 | % | 37 | % | ||||||
2005 | 2004 | |||||||
(in millions) | ||||||||
Capital lease | $ | 3 | $ | 2 | ||||
Senior notes | 150 | 450 | ||||||
Preferred stock | 15 | — | ||||||
Total | $ | 168 | $ | 452 | ||||
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 26,643 | ||
Other comprehensive income | — | |||
Net income | (81 | ) | ||
Total fair value | $ | 26,562 | ||
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Fair | ||||||||||||
Value | ||||||||||||
Weighted Average | Notional | Gain / | ||||||||||
Maturity | Fixed Rate Paid | Amount | (Loss) | |||||||||
(in millions) | ||||||||||||
2007 | 2.67% | $ | 300 | $ | 2.4 | |||||||
2006-2007 | 2.09% -3.85 | %* | $ | 400 | $ | 1.2 | ||||||
2037 | 4.58% -5.75 | %** | $ | 300 | $ | (1.1 | ) | |||||
* | Series of interest rate caps and collars (showing the lowest floor and highest cap) with variable rate based on one-month LIBOR | |
** | Interest rate collar |
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Commitments | ||||||||||||
Natural | Nuclear | |||||||||||
Gas | Coal | Fuel | ||||||||||
(in millions) | ||||||||||||
2006 | $ | 577 | $ | 1,579 | $ | 44 | ||||||
2007 | 325 | 1,313 | 28 | |||||||||
2008 | 200 | 907 | 14 | |||||||||
2009 | 257 | 422 | 11 | |||||||||
2010 | 254 | 272 | 14 | |||||||||
2011 and thereafter | 2,047 | 40 | 64 | |||||||||
Total | $ | 3,660 | $ | 4,533 | $ | 175 | ||||||
Capacity Payments | ||||
(in millions) | ||||
2006 | $ | 53 | ||
2007 | 52 | |||
2008 | 54 | |||
2009 | 54 | |||
2010 | 54 | |||
2011 and thereafter | 261 | |||
Total | $ | 528 | ||
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Commitments | ||||||||
Non- | ||||||||
Affiliated | Affiliated | |||||||
(in millions) | ||||||||
2006 | $ | 205 | $ | 85 | ||||
2007 | 205 | 86 | ||||||
2008 | 205 | 87 | ||||||
2009 | 205 | 68 | ||||||
2010 | 112 | 66 | ||||||
2011 and thereafter | 455 | 278 | ||||||
Total | $ | 1,387 | $ | 670 | ||||
Minimum Lease Payments | ||||||||||||
Rail Cars | Other | Total | ||||||||||
(in millions) | ||||||||||||
2006 | $ | 17 | $ | 17 | $ | 34 | ||||||
2007 | 17 | 14 | 31 | |||||||||
2008 | 16 | 11 | 27 | |||||||||
2009 | 15 | 9 | 24 | |||||||||
2010 | 14 | 6 | 20 | |||||||||
2011 and thereafter | 48 | 10 | 58 | |||||||||
Total | $ | 127 | $ | 67 | $ | 194 | ||||||
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Shares | Average | |||||||
Subject | Option Price | |||||||
To Option | Per Share | |||||||
Balance at December 31, 2002 | 7,178,597 | $ | 19.73 | |||||
Options granted | 1,455,517 | 27.98 | ||||||
Options canceled | (54,860 | ) | 25.47 | |||||
Options exercised | (1,428,273 | ) | 16.92 | |||||
Balance at December 31, 2003 | 7,150,981 | 21.92 | ||||||
Options granted | 1,434,915 | 29.50 | ||||||
Options canceled | (6,371 | ) | 25.99 | |||||
Options exercised | (1,450,309 | ) | 18.25 | |||||
Balance at December 31, 2004 | 7,129,216 | 24.19 | ||||||
Options granted | 1,427,618 | 32.71 | ||||||
Options canceled | (12,910 | ) | 23.75 | |||||
Options exercised | (1,838,033 | ) | 21.23 | |||||
Balance at December 31, 2005 | 6,705,891 | $ | 26.82 | |||||
Options exercisable: | ||||||||
At December 31, 2003 | 3,956,234 | |||||||
At December 31, 2004 | 4,304,091 | |||||||
At December 31, 2005 | 3,989,722 | |||||||
Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares (in thousands) | 991 | 2,922 | 2,794 | |||||||||
Average remaining life (in years) | 4.2 | 6.0 | 8.5 | |||||||||
Average exercise price | $ | 17.25 | $ | 25.94 | $ | 31.13 | ||||||
Exercisable: | ||||||||||||
Shares (in thousands) | 991 | 2,496 | 503 | |||||||||
Average exercise price | $ | 17.25 | $ | 25.59 | $ | 29.75 | ||||||
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Net Income | ||||||||||||
After | ||||||||||||
Dividends on | ||||||||||||
Operating | Operating | Preferred | ||||||||||
Quarter Ended | Revenues | Income | Stock | |||||||||
(in millions) | ||||||||||||
March 2005 | $ | 1,370 | $ | 286 | $ | 142 | ||||||
June 2005 | 1,459 | 311 | 158 | |||||||||
September 2005 | 2,219 | 626 | 355 | |||||||||
December 2005 | 1,586 | 165 | 60 | |||||||||
March 2004 | $ | 1,199 | $ | 285 | $ | 144 | ||||||
June 2004 | 1,353 | 322 | 156 | |||||||||
September 2004 | 1,582 | 486 | 287 | |||||||||
December 2004 | 1,237 | 166 | 71 | |||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) | $ | 6,634,203 | $ | 5,370,808 | $ | 4,913,507 | $ | 4,822,460 | $ | 4,965,794 | ||||||||||
Net Income after Dividends on Preferred Stock (in thousands) | $ | 714,999 | $ | 658,001 | $ | 630,577 | $ | 617,629 | $ | 610,335 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 556,100 | $ | 565,500 | $ | 565,800 | $ | 542,900 | $ | 527,300 | ||||||||||
Return on Average Common Equity (percent) | 14.15 | 13.95 | 14.05 | 13.99 | 14.12 | |||||||||||||||
Total Assets (in thousands) | $ | 17,047,783 | $ | 15,822,338 | $ | 14,850,754 | $ | 14,342,656 | $ | 14,447,973 | ||||||||||
Gross Property Additions (in thousands) | $ | 906,248 | $ | 1,126,064 | $ | 742,810 | $ | 883,968 | $ | 1,389,751 | ||||||||||
Capitalization (in thousands) : | ||||||||||||||||||||
Common stock equity | $ | 5,214,535 | $ | 4,890,561 | $ | 4,540,211 | $ | 4,434,447 | $ | 4,397,485 | ||||||||||
Preferred stock | — | 14,609 | 14,569 | 14,569 | 14,569 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 940,000 | 940,000 | 789,250 | |||||||||||||||
Long-term debt payable to affiliated trusts | 969,073 | 969,073 | — | — | — | |||||||||||||||
Long-term debt | 4,179,218 | 3,709,852 | 3,762,333 | 3,109,619 | 2,961,726 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 10,362,826 | $ | 9,584,095 | $ | 9,257,113 | $ | 8,498,635 | $ | 8,163,030 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 50.3 | 51.0 | 49.0 | 52.2 | 53.9 | |||||||||||||||
Preferred stock | — | 0.2 | 0.2 | 0.2 | 0.2 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 10.2 | 11.1 | 9.6 | |||||||||||||||
Long-term debt payable to affiliated trusts | 9.4 | 10.1 | — | — | — | |||||||||||||||
Long-term debt | 40.3 | 38.7 | 40.6 | 36.5 | 36.3 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
Preferred Stock - | ||||||||||||||||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
Fitch | A | A | A | A | A | |||||||||||||||
Unsecured Long-Term Debt - | ||||||||||||||||||||
Moody’s | A2 | A2 | A2 | A2 | A2 | |||||||||||||||
Standard and Poor’s | A | A | A | A | A | |||||||||||||||
Fitch | A+ | A+ | A+ | A+ | A+ | |||||||||||||||
Customers (year-end) : | ||||||||||||||||||||
Residential | 1,832,520 | 1,801,426 | 1,768,662 | 1,734,430 | 1,698,407 | |||||||||||||||
Commercial | 270,373 | 265,543 | 258,276 | 250,993 | 244,674 | |||||||||||||||
Industrial | 8,206 | 7,676 | 7,899 | 8,240 | 8,046 | |||||||||||||||
Other | 3,536 | 3,482 | 3,434 | 3,328 | 3,239 | |||||||||||||||
Total | 2,114,635 | 2,078,127 | 2,038,271 | 1,996,991 | 1,954,366 | |||||||||||||||
Employees(year-end) | 8,713 | 8,731 | 8,714 | 8,837 | 9,048 | |||||||||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands): | ||||||||||||||||||||
Residential | $ | 2,024,204 | $ | 1,736,072 | $ | 1,583,082 | $ | 1,600,438 | $ | 1,507,031 | ||||||||||
Commercial | 2,206,252 | 1,812,096 | 1,661,054 | 1,631,130 | 1,682,918 | |||||||||||||||
Industrial | 1,351,731 | 1,172,936 | 1,012,267 | 1,004,288 | 1,106,420 | |||||||||||||||
Other | 60,625 | 55,881 | 53,569 | 52,241 | 52,943 | |||||||||||||||
Total retail | 5,642,812 | 4,776,985 | 4,309,972 | 4,288,097 | 4,349,312 | |||||||||||||||
Sales for resale — non-affiliates | 519,673 | 246,545 | 259,376 | 270,678 | 366,085 | |||||||||||||||
Sales for resale — affiliates | 264,989 | 166,245 | 174,855 | 98,323 | 99,411 | |||||||||||||||
Total revenues from sales of electricity | 6,427,474 | 5,189,775 | 4,744,203 | 4,657,098 | 4,814,808 | |||||||||||||||
Other revenues | 206,729 | 181,033 | 169,304 | 165,362 | 150,986 | |||||||||||||||
Total | $ | 6,634,203 | $ | 5,370,808 | $ | 4,913,507 | $ | 4,822,460 | $ | 4,965,794 | ||||||||||
Kilowatt-Hour Sales (in thousands): | ||||||||||||||||||||
Residential | 23,585,115 | 22,930,372 | 21,778,582 | 22,144,559 | 20,119,080 | |||||||||||||||
Commercial | 29,768,402 | 28,014,357 | 26,940,572 | 26,954,922 | 26,493,255 | |||||||||||||||
Industrial | 25,027,371 | 26,357,271 | 25,703,421 | 25,739,785 | 25,349,477 | |||||||||||||||
Other | 601,330 | 602,202 | 595,742 | 593,202 | 583,007 | |||||||||||||||
Total retail | 78,982,218 | 77,904,202 | 75,018,317 | 75,432,468 | 72,544,819 | |||||||||||||||
Sales for resale — non-affiliates | 11,234,527 | 5,969,983 | 8,835,804 | 8,069,375 | 8,110,096 | |||||||||||||||
Sales for resale — affiliates | 4,854,914 | 4,782,873 | 5,844,196 | 3,962,559 | 3,133,485 | |||||||||||||||
Total | 95,071,659 | 88,657,058 | 89,698,317 | 87,464,402 | 83,788,400 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents): | ||||||||||||||||||||
Residential | 8.58 | 7.57 | 7.27 | 7.23 | 7.49 | |||||||||||||||
Commercial | 7.41 | 6.47 | 6.17 | 6.05 | 6.35 | |||||||||||||||
Industrial | 5.40 | 4.45 | 3.94 | 3.90 | 4.36 | |||||||||||||||
Total retail | 7.14 | 6.13 | 5.75 | 5.68 | 6.00 | |||||||||||||||
Sales for resale | 4.88 | 3.84 | 2.96 | 3.07 | 4.14 | |||||||||||||||
Total sales | 6.76 | 5.85 | 5.29 | 5.32 | 5.75 | |||||||||||||||
Residential Average Annual Kilowatt-Hour Use Per Customer | 12,974 | 12,838 | 12,421 | 12,867 | 11,933 | |||||||||||||||
Residential Average Annual Revenue Per Customer | $ | 1,113 | $ | 972 | $ | 903 | $ | 930 | $ | 894 | ||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 15,097 | 13,978 | 13,980 | 14,059 | 14,474 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts): | ||||||||||||||||||||
Winter | 13,501 | 12,208 | 13,153 | 11,873 | 11,977 | |||||||||||||||
Summer | 15,953 | 15,180 | 14,826 | 14,597 | 14,294 | |||||||||||||||
Annual Load Factor (percent) | 59.7 | 61.5 | 61.0 | 60.4 | 61.7 | |||||||||||||||
Plant Availability (percent): | ||||||||||||||||||||
Fossil-steam | 90.7 | 90.3 | 87.6 | 80.9 | 88.5 | |||||||||||||||
Nuclear | 89.3 | 94.8 | 94.2 | 88.8 | 94.4 | |||||||||||||||
Source of Energy Supply (percent): | ||||||||||||||||||||
Coal | 60.8 | 57.9 | 58.6 | 59.5 | 58.5 | |||||||||||||||
Nuclear | 15.1 | 17.3 | 16.8 | 16.2 | 18.1 | |||||||||||||||
Hydro | 1.9 | 1.5 | 2.1 | 0.9 | 1.1 | |||||||||||||||
Oil and gas | 2.9 | 0.1 | 0.3 | 0.3 | 0.4 | |||||||||||||||
Purchased power - | ||||||||||||||||||||
From non-affiliates | 5.7 | 7.0 | 7.5 | 6.3 | 7.8 | |||||||||||||||
From affiliates | 13.6 | 16.2 | 14.7 | 16.8 | 14.1 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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Key | 2005 | 2005 | ||
Performance | Target | Actual | ||
Indicator | Performance | Performance | ||
Customer Satisfaction | Top quartile performance in customer surveys | Top quartile | ||
Peak Season EFOR | 3.00% | 1.50% | ||
Net Income | $75.0 million | $75.2 million |
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Increase (Decrease) | ||||||||||||||||||
Amount | From Prior Year | |||||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||||
(in thousands) | ||||||||||||||||||
Operating revenues | $ | 1,083,622 | $ | 123,491 | $ | 82,434 | $ | 57,230 | ||||||||||
Fuel | 415,789 | 48,634 | 50,652 | 42,643 | ||||||||||||||
Purchased power | 98,397 | 32,500 | 15,740 | (12,841 | ) | |||||||||||||
Other operation and maintenance | 249,770 | 20,058 | 19,012 | 10,625 | ||||||||||||||
Depreciation and amortization | 85,002 | 2,203 | 477 | 5,308 | ||||||||||||||
Taxes other than income taxes | 76,387 | 6,531 | 3,741 | 5,082 | ||||||||||||||
Total operating expenses | 925,345 | 109,926 | 89,622 | 50,817 | ||||||||||||||
Operating income | 158,277 | 13,565 | (7,188 | ) | 6,413 | |||||||||||||
Total other income and (expense) | (37,326 | ) | (749 | ) | 5,219 | (706 | ) | |||||||||||
Income taxes | 44,981 | 5,286 | (1,182 | ) | 3,733 | |||||||||||||
Net Income | 75,970 | 7,530 | (787 | ) | 1,974 | |||||||||||||
Dividends on Preferred and Preference Stock | 761 | 544 | — | — | ||||||||||||||
Net Income after Dividends on Preferred and Preference Stock | $ | 75,209 | $ | 6,986 | $ | (787 | ) | $ | 1,974 | |||||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Retail – Prior Year | $ | 736,870 | $ | 699,174 | $ | 665,836 | ||||||
Change in — | ||||||||||||
Base rates | — | — | 22,000 | |||||||||
Sales growth | 11,568 | 4,896 | 7,040 | |||||||||
Weather | (4,223 | ) | 3,313 | (6,757 | ) | |||||||
Fuel and other cost recovery | 120,644 | 29,487 | 11,055 | |||||||||
Retail – Current Year | 864,859 | 736,870 | 699,174 | |||||||||
Sales for resale — | ||||||||||||
Non-affiliates | 84,346 | 73,537 | 76,767 | |||||||||
Affiliates | 91,352 | 110,264 | 63,268 | |||||||||
Total sales for resale | 175,698 | 183,801 | 140,035 | |||||||||
Other operating revenues | 43,065 | 39,460 | 38,488 | |||||||||
Total operating revenues | $ | 1,083,622 | $ | 960,131 | $ | 877,697 | ||||||
Percent change | 12.9 | % | 9.4 | % | 7.0 | % | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Unit Power — | ||||||||||||
Capacity | $ | 20,852 | $ | 18,780 | $ | 18,598 | ||||||
Energy | 33,206 | 29,360 | 30,892 | |||||||||
Total | $ | 54,058 | $ | 48,140 | $ | 49,490 | ||||||
KWH | Percent Change | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(millions) | ||||||||||||||||
Residential | 5,319 | 2.0 | % | 2.2 | % | (0.8 | )% | |||||||||
Commercial | 3,736 | 1.1 | 2.2 | 1.7 | ||||||||||||
Industrial | 2,161 | 2.3 | (1.6 | ) | 4.5 | |||||||||||
Other | 23 | 0.7 | 0.4 | 4.7 | ||||||||||||
Total retail | 11,239 | 1.7 | 1.5 | 1.0 | ||||||||||||
Sales for resale | ||||||||||||||||
Non-affiliates | 2,296 | 1.7 | (9.9 | ) | 16.1 | |||||||||||
Affiliates | 1,976 | (36.8 | ) | 28.1 | �� | 41.8 | ||||||||||
Total | 15,511 | (5.6 | ) | 3.8 | 8.0 | |||||||||||
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2005 | 2004 | 2003 | ||||||||||
Total generation (millions of KWH) | 15,024 | 15,841 | 14,988 | |||||||||
Sources of generation (percent) — | ||||||||||||
Coal | 86 | 84 | 87 | |||||||||
Gas | 14 | 16 | 13 | |||||||||
Average cost of fuel per net KWH generated (cents) | 2.77 | 2.32 | 2.11 | |||||||||
Average cost of purchased power per net KWH (cents) | 8.39 | 4.97 | 3.29 | |||||||||
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. |
• | Changes in existing income tax regulations or changes in Internal Revenue Service (IRS) interpretations of existing regulations. |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which the Company may be asserted to be a potentially responsible party. |
• | Identification and evaluation of other potential lawsuits or complaints in which the Company may be named as a defendant. |
• | Resolution or progression of existing matters through the legislative process, the court systems, the EPA, or the FDEP. |
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Changes in Fair Value | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Contracts beginning of year | $ | 317 | $ | 2,503 | ||||
Contracts realized or settled | (15,023 | ) | (8,409 | ) | ||||
New contracts at inception | — | — | ||||||
Changes in valuation techniques | — | — | ||||||
Current period changes (a) | 26,232 | 6,223 | ||||||
Contracts end of year | $ | 11,526 | $ | 317 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End | ||||||||||||
Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | 2006 | 2007-2008 | ||||||||||
(in thousands) | ||||||||||||
Actively quoted | $ | 11,568 | $ | 7,770 | $ | 3,798 | ||||||
External sources | (42 | ) | (42 | ) | — | |||||||
Models and other methods | — | — | — | |||||||||
Contracts end of Year | $ | 11,526 | $ | 7,728 | $ | 3,798 | ||||||
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 11,540 | ||
Other comprehensive income | — | |||
Net income | (14 | ) | ||
Total fair value | $ | 11,526 | ||
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2007- | 2009- | After | ||||||||||||||||||
Contractual Obligations | 2006 | 2008 | 2010 | 2010 | Total | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Long-term debt(a) — | ||||||||||||||||||||
Principal | $ | 37,075 | $ | — | $ | — | $ | 624,721 | $ | 661,796 | ||||||||||
Interest | 33,055 | 61,592 | 61,592 | 625,399 | 781,638 | |||||||||||||||
Commodity derivative obligations(b) | 2,444 | 8 | — | — | 2,452 | |||||||||||||||
Preference stock dividends(c) | 3,300 | 6,600 | 6,600 | — | 16,500 | |||||||||||||||
Operating leases | 4,875 | 7,363 | 4,169 | 4,170 | 20,577 | |||||||||||||||
Purchase commitments(d) — | ||||||||||||||||||||
Capital(e) | 162,711 | 441,554 | — | — | 604,265 | |||||||||||||||
Coal | 240,647 | 92,694 | — | — | 333,341 | |||||||||||||||
Natural gas(f) | 123,447 | 116,683 | 37,772 | 204,030 | 481,932 | |||||||||||||||
Long-term service agreements | 5,711 | 13,077 | 16,203 | 43,064 | 78,055 | |||||||||||||||
Postretirement benefit trusts(g) | 70 | 140 | — | — | 210 | |||||||||||||||
Total | $ | 613,335 | $ | 739,711 | $ | 126,336 | $ | 1,501,384 | $ | 2,980,766 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. | |
(b) | For additional information, see Notes 1 and 6 to the financial statements herein. | |
(c) | Preference stock does not mature; therefore, amounts are provided for the next five years only. | |
(d) | The Company generally does not enter into non-cancelable commitments for other operation and maintenance expenditures. Total other operation and maintenance expenses for the last three years were $250 million, $230 million, and $211 million, respectively. | |
(e) | The Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(f) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(g) | The Company forecasts postretirement trust contributions over a three-year period. No contributions related to the Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from the Company’s corporate assets. |
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• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; |
• | current and future litigation, regulatory investigations, proceedings, or inquiries, including the pending EPA civil actions against the Company, FERC matters, and IRS audits; |
• | the effects, extent, and timing of the entry of additional competition in the markets in which the Company operates; |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population and business growth (and declines); |
• | available sources and costs of fuels; |
• | ability to control costs; |
• | investment performance of the Company’s employee benefit plans; |
• | advances in technology; |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; |
• | internal restructuring or other restructuring options that may be pursued; |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to the Company; |
• | the ability of counterparties of the Company to make payments as and when due; |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; |
• | the direct or indirect effect on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; |
• | the ability of the Company to obtain additional generating capacity at competitive prices; |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes or other similar occurrences; |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; |
• | the effect of accounting pronouncements issued periodically by standard setting bodies; and |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Company from time to time with the Securities and Exchange Commission. |
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For the Years Ended December 31, 2005, 2004, and 2003
Gulf Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 864,859 | $ | 736,870 | $ | 699,174 | ||||||
Sales for resale — | ||||||||||||
Non-affiliates | 84,346 | 73,537 | 76,767 | |||||||||
Affiliates | 91,352 | 110,264 | 63,268 | |||||||||
Other revenues | 43,065 | 39,460 | 38,488 | |||||||||
Total operating revenues | 1,083,622 | 960,131 | 877,697 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 415,789 | 367,155 | 316,503 | |||||||||
Purchased power — | ||||||||||||
Non-affiliates | 29,995 | 30,720 | 17,137 | |||||||||
Affiliates | 68,402 | 35,177 | 33,020 | |||||||||
Other operations | 176,620 | 160,635 | 140,166 | |||||||||
Maintenance | 73,150 | 69,077 | 70,534 | |||||||||
Depreciation and amortization | 85,002 | 82,799 | 82,322 | |||||||||
Taxes other than income taxes | 76,387 | 69,856 | 66,115 | |||||||||
Total operating expenses | 925,345 | 815,419 | 725,797 | |||||||||
Operating Income | 158,277 | 144,712 | 151,900 | |||||||||
Other Income and (Expense): | ||||||||||||
Interest income | 3,804 | 1,224 | 888 | |||||||||
Interest expense, net of amounts capitalized | (35,727 | ) | (31,482 | ) | (31,069 | ) | ||||||
Interest expense to affiliate trusts | (4,590 | ) | (3,443 | ) | — | |||||||
Distributions on mandatorily redeemable preferred securities | — | (1,113 | ) | (7,085 | ) | |||||||
Other income (expense), net | (813 | ) | (1,763 | ) | (4,530 | ) | ||||||
Total other income and (expense) | (37,326 | ) | (36,577 | ) | (41,796 | ) | ||||||
Earnings Before Income Taxes | 120,951 | 108,135 | 110,104 | |||||||||
Income taxes | 44,981 | 39,695 | 40,877 | |||||||||
Net Income | 75,970 | 68,440 | 69,227 | |||||||||
Dividends on Preferred and Preference Stock | 761 | 217 | 217 | |||||||||
Net Income After Dividends on Preferred and Preference Stock | $ | 75,209 | $ | 68,223 | $ | 69,010 | ||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Gulf Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 75,970 | $ | 68,440 | $ | 69,227 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 90,890 | 88,772 | 87,949 | |||||||||
Deferred income taxes | 33,161 | 46,255 | 2,303 | |||||||||
Pension, postretirement, and other employee benefits | 375 | (895 | ) | (717 | ) | |||||||
Tax benefit of stock options | 3,502 | 3,063 | 1,768 | |||||||||
Hedge settlements | — | — | (3,266 | ) | ||||||||
Other, net | 3,958 | 11,402 | 6,795 | |||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (46,248 | ) | 543 | 8,165 | ||||||||
Fossil fuel stock | (11,740 | ) | 2,355 | 1,837 | ||||||||
Materials and supplies | 3,785 | (831 | ) | (1,091 | ) | |||||||
Prepaid income taxes | 31,898 | (32,343 | ) | 12,701 | ||||||||
Property damage cost recovery | 20,045 | — | — | |||||||||
Other current assets | 3,453 | 2,721 | (704 | ) | ||||||||
Accounts payable | (72,532 | ) | (51,876 | ) | (1,512 | ) | ||||||
Accrued taxes | 6,847 | 629 | (549 | ) | ||||||||
Accrued compensation | 311 | 1,946 | 104 | |||||||||
Other current liabilities | 9,011 | 4,325 | 8,300 | |||||||||
Net cash provided from operating activities | 152,686 | 144,506 | 191,310 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (143,171 | ) | (148,765 | ) | (98,572 | ) | ||||||
Cost of removal net of salvage | (8,504 | ) | (10,259 | ) | (7,881 | ) | ||||||
Construction payables | (8,806 | ) | 13,682 | (2,726 | ) | |||||||
Other | (440 | ) | 8,952 | (2,545 | ) | |||||||
Net cash used for investing activities | (160,921 | ) | (136,390 | ) | (111,724 | ) | ||||||
Financing Activities: | ||||||||||||
Increase in notes payable, net | 39,465 | 12,334 | 9,187 | |||||||||
Proceeds — | ||||||||||||
Pollution control bonds | — | — | 61,625 | |||||||||
Senior notes | 60,000 | 110,000 | 225,000 | |||||||||
Other long-term debt | — | 100,000 | — | |||||||||
Preferred and preference stock | 55,000 | — | — | |||||||||
Capital contributions from parent company | (94 | ) | 29,481 | 13,315 | ||||||||
Redemptions — | ||||||||||||
Pollution control bonds | — | — | (61,625 | ) | ||||||||
First mortgage bonds | (30,000 | ) | — | — | ||||||||
Senior notes | — | (125,000 | ) | (151,757 | ) | |||||||
Other long-term debt | (100,000 | ) | — | (20,000 | ) | |||||||
Preferred and preference stock | (4,236 | ) | — | — | ||||||||
Mandatorily redeemable preferred securities | — | — | (85,000 | ) | ||||||||
Payment of preferred and preference stock dividends | (761 | ) | (217 | ) | (217 | ) | ||||||
Payment of common stock dividends | (68,400 | ) | (70,000 | ) | (70,200 | ) | ||||||
Other | (3,721 | ) | (2,433 | ) | (10,644 | ) | ||||||
Net cash provided from (used for) financing activities | (52,747 | ) | 54,165 | (90,316 | ) | |||||||
Net Change in Cash and Cash Equivalents | (60,982 | ) | 62,281 | (10,730 | ) | |||||||
Cash and Cash Equivalents at Beginning of Year | 64,829 | 2,548 | 13,278 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 3,847 | $ | 64,829 | $ | 2,548 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for — | ||||||||||||
Interest (net of $515, $819, and $314 capitalized, respectively) | $ | 35,786 | $ | 28,796 | $ | 37,468 | ||||||
Income taxes (net of refunds) | (27,912 | ) | 24,130 | 23,777 | ||||||||
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At December 31, 2005 and 2004
Gulf Power Company 2005 Annual Report
Assets | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 3,847 | $ | 64,829 | ||||
Receivables — | ||||||||
Customer accounts receivable | 51,567 | 44,255 | ||||||
Unbilled revenues | 39,951 | 35,889 | ||||||
Under recovered regulatory clause revenues | 33,205 | 9,283 | ||||||
Other accounts and notes receivable | 10,533 | 7,177 | ||||||
Affiliated companies | 24,001 | 16,218 | ||||||
Accumulated provision for uncollectible accounts | (1,134 | ) | (2,144 | ) | ||||
Fossil fuel stock, at average cost | 44,740 | 32,999 | ||||||
Materials and supplies, at average cost | 32,976 | 36,761 | ||||||
Prepaid income taxes | 295 | 34,812 | ||||||
Property damage cost recovery | 28,744 | 3,500 | ||||||
Other regulatory assets | 9,895 | 9,043 | ||||||
Other | 19,341 | 5,198 | ||||||
Total current assets | 297,961 | 297,820 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 2,502,057 | 2,367,189 | ||||||
Less accumulated provision for depreciation | 865,989 | 844,617 | ||||||
1,636,068 | 1,522,572 | |||||||
Construction work in progress | 28,177 | 75,218 | ||||||
Total property, plant, and equipment | 1,664,245 | 1,597,790 | ||||||
Other Property and Investments | 6,736 | 6,425 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 17,379 | 17,566 | ||||||
Prepaid pension costs | 46,374 | 45,384 | ||||||
Other regulatory assets | 123,258 | 127,190 | ||||||
Other | 19,844 | 19,702 | ||||||
Total deferred charges and other assets | 206,855 | 209,842 | ||||||
Total Assets | $ | 2,175,797 | $ | 2,111,877 | ||||
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At December 31, 2005 and 2004
Gulf Power Company 2005 Annual Report
Liabilities and Stockholder’s Equity | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Liabilities: | ||||||||
Securities due within one year | $ | 37,075 | $ | 100,000 | ||||
Notes payable | 89,465 | 50,000 | ||||||
Accounts payable — | ||||||||
Affiliated | 36,717 | 35,359 | ||||||
Other | 44,139 | 77,452 | ||||||
Customer deposits | 18,834 | 18,470 | ||||||
Accrued taxes — | ||||||||
Income taxes | 12,823 | 1,927 | ||||||
Other | 11,689 | 9,250 | ||||||
Accrued interest | 7,713 | 7,665 | ||||||
Accrued compensation | 20,336 | 16,989 | ||||||
Other regulatory liabilities | 15,671 | 6,469 | ||||||
Other | 21,844 | 13,179 | ||||||
Total current liabilities | 316,306 | 336,760 | ||||||
Long-term Debt(See accompanying statements) | 544,388 | 550,989 | ||||||
Long-term Debt Payable to Affiliated Trusts(See accompanying statements) | 72,166 | 72,166 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 256,490 | 229,909 | ||||||
Accumulated deferred investment tax credits | 16,569 | 18,489 | ||||||
Employee benefit obligations | 56,235 | 54,869 | ||||||
Other cost of removal obligations | 153,665 | 155,831 | ||||||
Other regulatory liabilities | 26,795 | 25,402 | ||||||
Other | 76,948 | 71,192 | ||||||
Total deferred credits and other liabilities | 586,702 | 555,692 | ||||||
Total Liabilities | 1,519,562 | 1,515,607 | ||||||
Preferred and Preference Stock(See accompanying statements) | 53,891 | 4,098 | ||||||
Common Stockholder’s Equity(See accompanying statements) | 602,344 | 592,172 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 2,175,797 | $ | 2,111,877 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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At December 31, 2005 and 2004
Gulf Power Company 2005 Annual Report
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long Term Debt: | ||||||||||||||||
First mortgage bonds — | ||||||||||||||||
6.50% due November 1, 2006 | $ | 25,000 | $ | 25,000 | ||||||||||||
6.88% due January 1, 2026 | — | 30,000 | ||||||||||||||
Total first mortgage bonds | 25,000 | 55,000 | ||||||||||||||
Long-term notes payable — | ||||||||||||||||
Variable rate (2.36% at 1/1/05) due October 28, 2005 | — | 100,000 | ||||||||||||||
4.35% to 5.88% due 2013-2044 | 395,000 | 335,000 | ||||||||||||||
Total long-term notes payable | 395,000 | 435,000 | ||||||||||||||
Other long-term debt — | ||||||||||||||||
Pollution control revenue bonds — | ||||||||||||||||
Collateralized: 5.25% due April 1, 2006 | 12,075 | 12,075 | ||||||||||||||
Non-collateralized: | ||||||||||||||||
4.80% due September 1, 2028 | 13,000 | 13,000 | ||||||||||||||
Variable rates (3.10% to 3.80% at 1/1/06) due 2022-2037 | 144,555 | 144,555 | ||||||||||||||
Total other long-term debt | 169,630 | 169,630 | ||||||||||||||
Unamortized debt premium (discount), net | (8,167 | ) | (8,641 | ) | ||||||||||||
Total long-term debt (annual interest requirement — $28.5 million) | 581,463 | 650,989 | ||||||||||||||
Less amount due within one year | 37,075 | 100,000 | ||||||||||||||
Long-term debt excluding amount due within one year | 544,388 | 550,989 | 42.8 | % | 45.2 | % | ||||||||||
Long-term Debt Payable to Affiliated Trusts: | ||||||||||||||||
5.6% to 7.38% due 2041 through 2042 (annual interest requirement — $4.6 million) | 72,166 | 72,166 | 5.7 | 5.9 | ||||||||||||
Preferred and Preference Stock: | ||||||||||||||||
Cumulative preferred stock | ||||||||||||||||
$100 par value | ||||||||||||||||
Authorized — 10,000,000 shares | ||||||||||||||||
Outstanding — No shares in 2005, 42,361 shares in 2004 4.64% to 5.44% | — | 4,098 | ||||||||||||||
Non-cumulative preference stock | ||||||||||||||||
$100 par or stated value — 6.00% | ||||||||||||||||
Authorized — 10,000,000 shares | ||||||||||||||||
Outstanding — 550,000 shares | 53,891 | — | ||||||||||||||
Total preferred and preference stock (annual dividend requirement — $3.3 million) | 53,891 | 4,098 | 4.2 | 0.3 | ||||||||||||
Common Stockholder’s Equity: | ||||||||||||||||
Common stock, without par value — | ||||||||||||||||
Authorized — 10,000,000 shares | ||||||||||||||||
Outstanding — 992,717 shares | 38,060 | 38,060 | ||||||||||||||
Paid-in capital | 400,815 | 397,396 | ||||||||||||||
Retained earnings | 166,279 | 159,581 | ||||||||||||||
Accumulated other comprehensive income (loss) | (2,810 | ) | (2,865 | ) | ||||||||||||
Total common stockholder’s equity | 602,344 | 592,172 | 47.3 | 48.6 | ||||||||||||
Total Capitalization | $ | 1,272,789 | $ | 1,219,425 | 100.0 | % | 100.0 | % | ||||||||
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Other | ||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2002 | $ | 38,060 | $ | 349,781 | $ | 162,398 | $ | (734 | ) | $ | 549,505 | |||||||||
Net income after dividends on preferred stock | — | — | 69,010 | — | 69,010 | |||||||||||||||
Capital contributions from parent company | — | 15,083 | — | — | 15,083 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (2,040 | ) | (2,040 | ) | |||||||||||||
Cash dividends on common stock | — | — | (70,200 | ) | — | (70,200 | ) | |||||||||||||
Balance at December 31, 2003 | 38,060 | 364,864 | 161,208 | (2,774 | ) | 561,358 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 68,223 | — | 68,223 | |||||||||||||||
Capital contributions from parent company | — | 32,544 | — | — | 32,544 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (91 | ) | (91 | ) | |||||||||||||
Cash dividends on common stock | — | — | (70,000 | ) | — | (70,000 | ) | |||||||||||||
Other | — | (12 | ) | 150 | — | 138 | ||||||||||||||
Balance at December 31, 2004 | 38,060 | 397,396 | 159,581 | (2,865 | ) | 592,172 | ||||||||||||||
Net income after dividends on preferred and preference stock | — | — | 75,209 | — | 75,209 | |||||||||||||||
Capital contributions from parent company | — | 3,408 | — | — | 3,408 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 55 | 55 | |||||||||||||||
Cash dividends on common stock | — | — | (68,400 | ) | — | (68,400 | ) | |||||||||||||
Other | — | 11 | (111 | ) | — | (100 | ) | |||||||||||||
Balance at December 31, 2005 | $ | 38,060 | $ | 400,815 | $ | 166,279 | $ | (2,810 | ) | $ | 602,344 | |||||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Net income after dividends on preferred and preference stock | $ | 75,209 | $ | 68,223 | $ | 69,010 | ||||||
Other comprehensive income (loss): | ||||||||||||
Changes in additional minimum pension liability, net of tax of $(91), $(184) and $(84), respectively | (146 | ) | (292 | ) | (134 | ) | ||||||
Change in fair value of marketable securities, net of tax of $35 | — | 56 | — | |||||||||
Changes in fair value of qualifying hedges, net of tax of $(1,260) | — | — | (2,006 | ) | ||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $126, $91 and $63 | 201 | 145 | 100 | |||||||||
Total other comprehensive income (loss) | 55 | (91 | ) | (2,040 | ) | |||||||
Comprehensive Income | $ | 75,264 | $ | 68,132 | $ | 66,970 | ||||||
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Gulf Power Company 2005 Annual Report
2005 | 2004 | Note | ||||||||||
(in thousands) | ||||||||||||
Environmental remediation | $ | 58,235 | $ | 59,364 | (a | ) | ||||||
Loss on reacquired debt | 19,433 | 19,197 | (b | ) | ||||||||
Vacation pay | 5,662 | 5,446 | (c | ) | ||||||||
Deferred income tax charges | 17,379 | 17,566 | (d | ) | ||||||||
Fuel-hedging assets | 2,411 | 1,685 | (e | ) | ||||||||
Other assets | 3,374 | 5,656 | (f | ) | ||||||||
Under recovered regulatory clause revenues | 31,634 | 7,931 | (f | ) | ||||||||
Property damage recovery | 30,778 | — | (g | ) | ||||||||
Property damage reserve | 43,574 | 48,284 | (f | ) | ||||||||
Asset retirement obligations | (640 | ) | 1,453 | (d | ) | |||||||
Other cost of removal obligations | (153,665 | ) | (155,831 | ) | (d | ) | ||||||
Deferred income tax credits | (20,627 | ) | (23,354 | ) | (d | ) | ||||||
Fuel-hedging liabilities | (13,950 | ) | (1,994 | ) | (e | ) | ||||||
Over recovered regulatory clause revenues | (5,333 | ) | (4,554 | ) | (f | ) | ||||||
Other liabilities | (1,916 | ) | (1,967 | ) | (f | ) | ||||||
Total | $ | 16,349 | $ | (21,118 | ) | |||||||
(a) | Recovered through the environmental cost recovery clause when the expense is incurred. | |
(b) | Recovered over the remaining life of the original issue, which may range up to 40 years. | |
(c) | Recorded as earned by employees and recovered as paid, generally within one year. | |
(d) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered, and deferred tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(e) | Fuel-hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed two years. Upon final settlement, costs are recovered through the fuel cost recovery clause. | |
(f) | Recorded and recovered or amortized as approved by the Florida PSC. | |
(g) | Recorded and recovered over 24 months ending March 2007 as approved by the Florida PSC. |
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Gulf Power Company 2005 Annual Report
2005 | 2004 | |||||||
(in thousands) | ||||||||
Generation | $ | 1,326,766 | $ | 1,237,184 | ||||
Transmission | 262,168 | 254,506 | ||||||
Distribution | 788,711 | 754,667 | ||||||
General | 120,339 | 116,503 | ||||||
Plant acquisition adjustment | 4,073 | 4,329 | ||||||
Total plant in service | $ | 2,502,057 | $ | 2,367,189 | ||||
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Gulf Power Company 2005 Annual Report
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance beginning of year | $ | 5,789 | $ | 4,271 | ||||
Liabilities incurred | 9,122 | — | ||||||
Liabilities settled | — | — | ||||||
Accretion | 387 | 316 | ||||||
Cash flow revisions | — | 1,202 | ||||||
Balance end of year | $ | 15,298 | $ | 5,789 | ||||
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Gulf Power Company 2005 Annual Report
As | Options | Pro | ||||||||||
Reported | Impact | Forma | ||||||||||
(in thousands) | ||||||||||||
2005 | $ | 75,209 | $ | (586 | ) | $ | 74,623 | |||||
2004 | 68,223 | (522 | ) | 67,701 | ||||||||
2003 | 69,010 | (593 | ) | 68,417 | ||||||||
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Gulf Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.9 | % | 3.1 | % | 2.7 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.9 | % | 19.6 | % | 23.6 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 | ||||||
Carrying | Fair | |||||||
Amount | Value | |||||||
(in thousands) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 653,629 | $ | 644,677 | ||||
2004 | 723,155 | 729,821 | ||||||
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Gulf Power Company 2005 Annual Report
Projected | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 228,414 | $ | 206,486 | ||||
Service cost | 6,318 | 5,915 | ||||||
Interest cost | 12,866 | 12,136 | ||||||
Benefits paid | (10,081 | ) | (9,499 | ) | ||||
Actuarial (gain)/loss and employee transfers, net | 10,509 | 13,376 | ||||||
Balance at end of year | $ | 248,026 | $ | 228,414 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 250,238 | $ | 236,345 | ||||
Actual return on plan assets | 38,478 | 23,152 | ||||||
Employer contributions | 732 | 550 | ||||||
Benefits paid | (10,081 | ) | (9,499 | ) | ||||
Employee transfers | 999 | (310 | ) | |||||
Balance at end of year | $ | 280,366 | $ | 250,238 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
Accrued Pension Costs | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | 32,340 | $ | 21,824 | ||||
Unrecognized transition amount | — | (721 | ) | |||||
Unrecognized prior service cost | 12,780 | 12,434 | ||||||
Unrecognized net (gain)/loss | (3,645 | ) | 7,511 | |||||
Prepaid pension asset, net | $ | 41,475 | $ | 41,048 | ||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Prepaid pension asset | $ | 46,374 | $ | 45,384 | ||||
Employee benefit obligations | (7,893 | ) | (7,316 | ) | ||||
Other property and investments — other | 868 | 1,091 | ||||||
Accumulated other comprehensive income | 2,126 | 1,889 | ||||||
Prepaid pension asset, net | $ | 41,475 | $ | 41,048 | ||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Service cost | $ | 6,317 | $ | 5,915 | $ | 5,225 | ||||||
Interest cost | 12,866 | 12,136 | 11,733 | |||||||||
Expected return on plan assets | (20,816 | ) | (20,689 | ) | (20,564 | ) | ||||||
Recognized net (gain)/loss | 350 | (317 | ) | (1,819 | ) | |||||||
Net amortization | 502 | 486 | 486 | |||||||||
Net pension income | $ | (781 | ) | $ | (2,469 | ) | $ | (4,939 | ) | |||
Benefit | ||||
Payments | ||||
(in thousands) | ||||
2006 | $ | 10,459 | ||
2007 | 10,756 | |||
2008 | 11,053 | |||
2009 | 11,403 | |||
2010 | 11,895 | |||
2011 to 2015 | $ | 69,865 | ||
Accumulated | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 69,186 | $ | 72,903 | ||||
Service cost | 1,357 | 1,275 | ||||||
Interest cost | 3,892 | 4,080 | ||||||
Benefits paid | (3,124 | ) | (2,447 | ) | ||||
Actuarial (gain)/loss | 1,969 | (6,625 | ) | |||||
Balance at end of year | $ | 73,280 | $ | 69,186 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 14,296 | $ | 12,642 | ||||
Actual return on plan assets | 2,114 | 1,594 | ||||||
Employer contributions | 3,148 | 2,507 | ||||||
Benefits paid | (3,124 | ) | (2,447 | ) | ||||
Balance at end of year | $ | 16,434 | $ | 14,296 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 34 | % | 38 | % | 34 | % | ||||||
International equity | 23 | 23 | 19 | |||||||||
Fixed income | 19 | 21 | 30 | |||||||||
Real estate | 14 | 12 | 10 | |||||||||
Private equity | 10 | 6 | 7 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | (56,846 | ) | $ | (54,891 | ) | ||
Unrecognized transition obligation | 2,589 | 2,944 | ||||||
Unrecognized prior service cost | 4,311 | 4,657 | ||||||
Unrecognized net (gain)/loss | 9,026 | 8,074 | ||||||
Fourth quarter contributions | 973 | 829 | ||||||
Accrued liability recognized in the balance sheets | $ | (39,947 | ) | $ | (38,387 | ) | ||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Service cost | $ | 1,357 | $ | 1,275 | $ | 1,128 | ||||||
Interest cost | 3,892 | 4,081 | 4,058 | |||||||||
Expected return on plan assets | (1,202 | ) | (1,220 | ) | (1,139 | ) | ||||||
Transition obligation | 356 | 355 | 356 | |||||||||
Prior service cost | 346 | 346 | 346 | |||||||||
Recognized net (gain)/loss | 33 | 241 | 113 | |||||||||
Net postretirement cost | $ | 4,782 | $ | 5,078 | $ | 4,862 | ||||||
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Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in thousands) | ||||||||||||
2006 | $ | 3,628 | $ | (315 | ) | $ | 3,313 | |||||
2007 | 3,803 | (399 | ) | 3,404 | ||||||||
2008 | 4,146 | (456 | ) | 3,690 | ||||||||
2009 | 4,518 | (508 | ) | 4,010 | ||||||||
2010 | 4,881 | (558 | ) | 4,323 | ||||||||
2011 to 2015 | $ | 27,109 | $ | (3,936 | ) | $ | 23,173 | |||||
2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | % | 3.50 | % | 3.75 | % | ||||||
Long-term return on plan assets | 8.50 | % | 8.50 | % | 8.50 | % | ||||||
1 Percent | ||||||||
Increase | Decrease | |||||||
(in thousands) | ||||||||
Benefit obligation | $ | 4,745 | $ | 4,254 | ||||
Service and interest costs | $ | 310 | $ | 276 | ||||
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Plant | Plant | |||||||
Scherer | Daniel | |||||||
Unit 3 | Units 1 & 2 | |||||||
(coal) | (coal) | |||||||
(in thousands) | ||||||||
Plant in service | $ | 190,534 | (1) | $ | 244,380 | |||
Accumulated depreciation | 87,817 | 133,923 | ||||||
Construction work in progress | 360 | 3,620 | ||||||
Ownership | 25 | % | 50 | % | ||||
(1) | Includes net plant acquisition adjustment of $4.1 million. |
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Federal — | ||||||||||||
Current | $ | 11,330 | $ | (4,255 | ) | $ | 33,871 | |||||
Deferred | 26,693 | 39,373 | 1,702 | |||||||||
38,023 | 35,118 | 35,573 | ||||||||||
State — | ||||||||||||
Current | 490 | (2,305 | ) | 4,703 | ||||||||
Deferred | 6,468 | 6,882 | 601 | |||||||||
6,958 | 4,577 | 5,304 | ||||||||||
Total | $ | 44,981 | $ | 39,695 | $ | 40,877 | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 245,906 | $ | 218,137 | ||||
Fuel recovery clause | 12,812 | 3,212 | ||||||
Pension benefits | 14,817 | 14,176 | ||||||
Property reserve | 29,393 | 20,675 | ||||||
Other | 6,352 | 15,029 | ||||||
Total | 309,280 | 271,229 | ||||||
Deferred tax assets: | ||||||||
Federal effect of state deferred taxes | 13,591 | 11,930 | ||||||
Postretirement benefits | 13,430 | 12,588 | ||||||
Pension benefits | 2,054 | 2,020 | ||||||
Other comprehensive loss | 1,765 | 1,800 | ||||||
Other | 13,082 | 11,055 | ||||||
Total | 43,922 | 39,393 | ||||||
Net deferred tax liabilities | 265,358 | 231,836 | ||||||
Less current portion, net | (8,868 | ) | (1,927 | ) | ||||
Accumulated deferred income taxes in the balance sheets | $ | 256,490 | $ | 229,909 | ||||
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2005 | 2004 | 2003 | ||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State income tax, net of federal deduction | 4 | 3 | 3 | |||||||||
Non-deductible book depreciation | 1 | 1 | 1 | |||||||||
Difference in prior years’ deferred and current tax rate | (1 | ) | (1 | ) | (1 | ) | ||||||
Other, net | (2 | ) | (1 | ) | (1 | ) | ||||||
Effective income tax rate | 37 | % | 37 | % | 37 | % | ||||||
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 11,540 | ||
Other comprehensive income | — | |||
Net income | (14 | ) | ||
Total fair value | $ | 11,526 | ||
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Natural | ||||||||
Year | Gas | Coal | ||||||
(in thousands) | ||||||||
2006 | $ | 123,447 | $ | 240,647 | ||||
2007 | 71,482 | 92,694 | ||||||
2008 | 45,201 | — | ||||||
2009 | 18,886 | — | ||||||
2010 | 18,886 | — | ||||||
2011 and thereafter | 204,030 | — | ||||||
Total commitments | $ | 481,932 | $ | 333,341 | ||||
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Rail | ||||||||||||
Year | Cars | Other | Total | |||||||||
(in thousands) | ||||||||||||
2006 | $ | 4,816 | $ | 59 | $ | 4,875 | ||||||
2007 | 4,105 | 61 | 4,166 | |||||||||
2008 | 3,134 | 63 | 3,197 | |||||||||
2009 | 2,101 | — | 2,101 | |||||||||
2010 | 2,068 | — | 2,068 | |||||||||
2011 and thereafter | 4,170 | — | 4,170 | |||||||||
Total minimum payments | $ | 20,394 | $ | 183 | $ | 20,577 | ||||||
Shares | Average | |||||||
Subject | Option Price | |||||||
to Option | per Share | |||||||
Balance at December 31, 2002 | 1,226,198 | $ | 19.88 | |||||
Options granted | 274,245 | 27.98 | ||||||
Options canceled | (3,082 | ) | 19.26 | |||||
Options exercised | (192,189 | ) | 17.01 | |||||
Balance at December 31, 2003 | 1,305,172 | 22.00 | ||||||
Options granted | 256,363 | 29.50 | ||||||
Options canceled | (438 | ) | 28.47 | |||||
Options exercised | (386,413 | ) | 18.76 | |||||
Balance at December 31, 2004 | 1,174,684 | 24.70 | ||||||
Options granted | 249,683 | 32.70 | ||||||
Options canceled | (2,131 | ) | 29.08 | |||||
Options exercised | (322,687 | ) | 22.80 | |||||
Balance at December 31, 2005 | 1,099,549 | $ | 27.07 | |||||
Options exercisable: | ||||||||
At December 31, 2003 | 839,618 | |||||||
At December 31, 2004 | 715,570 | |||||||
At December 31, 2005 | 622,435 | |||||||
Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares (in thousands) | 158 | 452 | 490 | |||||||||
Average remaining life (in years) | 4.2 | 6.3 | 8.6 | |||||||||
Average exercise price | $ | 17.11 | $ | 26.13 | $ | 31.13 | ||||||
Exercisable: | ||||||||||||
Shares (in thousands) | 158 | 381 | 84 | |||||||||
Average exercise price | $ | 17.11 | $ | 25.79 | $ | 29.67 | ||||||
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Net Income | ||||||||||||
After Dividends | ||||||||||||
Operating | Operating | on Preferred and | ||||||||||
Quarter Ended | Revenues | Income | Preference Stock | |||||||||
(in thousands) | ||||||||||||
March 2005 | $ | 224,597 | $ | 31,229 | $ | 14,646 | ||||||
June 2005 | 251,297 | 44,153 | 21,458 | |||||||||
September 2005 | 344,080 | 68,571 | 37,197 | |||||||||
December 2005 | 263,648 | 14,324 | 1,908 | |||||||||
March 2004 | $ | 214,919 | $ | 35,803 | $ | 16,839 | ||||||
June 2004 | 241,170 | 39,824 | 19,002 | |||||||||
September 2004 | 269,386 | 59,628 | 31,900 | |||||||||
December 2004 | 234,656 | 9,457 | 482 | |||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) | $ | 1,083,622 | $ | 960,131 | $ | 877,697 | $ | 820,467 | $ | 725,203 | ||||||||||
Net Income after Dividends on Preferred and Preference Stock (in thousands) | $ | 75,209 | $ | 68,223 | $ | 69,010 | $ | 67,036 | $ | 58,307 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 68,400 | $ | 70,000 | $ | 70,200 | $ | 65,500 | $ | 53,275 | ||||||||||
Return on Average Common Equity (percent) | 12.59 | 11.83 | 12.42 | 12.72 | 12.51 | |||||||||||||||
Total Assets (in thousands) | $ | 2,175,797 | $ | 2,111,877 | $ | 1,839,053 | $ | 1,816,889 | $ | 1,713,436 | ||||||||||
Gross Property Additions (in thousands) | $ | 142,583 | $ | 161,205 | $ | 99,284 | $ | 106,624 | $ | 274,668 | ||||||||||
Capitalization (in thousands) : | ||||||||||||||||||||
Common stock equity | $ | 602,344 | $ | 592,172 | $ | 561,358 | $ | 549,505 | $ | 504,894 | ||||||||||
Preferred and preference stock | 53,891 | 4,098 | 4,236 | 4,236 | 4,236 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 70,000 | 115,000 | 115,000 | |||||||||||||||
Long-term debt payable to affiliated trusts | 72,166 | 72,166 | — | — | — | |||||||||||||||
Long-term debt | 544,388 | 550,989 | 515,827 | 452,040 | 467,784 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 1,272,789 | $ | 1,219,425 | $ | 1,151,421 | $ | 1,120,781 | $ | 1,091,914 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 47.3 | 48.6 | 48.8 | 49.0 | 46.2 | |||||||||||||||
Preferred and preference stock | 4.2 | 0.3 | 0.4 | 0.4 | 0.4 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 6.1 | 10.3 | 10.5 | |||||||||||||||
Long-term debt payable to affiliated trusts | 5.7 | 5.9 | — | — | — | |||||||||||||||
Long-term debt | 42.8 | 45.2 | 44.7 | 40.3 | 42.9 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
First Mortgage Bonds — | ||||||||||||||||||||
Moody’s | A1 | A1 | A1 | A1 | A1 | |||||||||||||||
Standard and Poor’s | A+ | A+ | A+ | A+ | A+ | |||||||||||||||
Fitch | A+ | A+ | A+ | A+ | A+ | |||||||||||||||
Preferred Stock/ Preference Stock — | ||||||||||||||||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
Fitch | A- | A- | A- | A- | A- | |||||||||||||||
Unsecured Long-Term Debt — | ||||||||||||||||||||
Moody’s | A2 | A2 | A2 | A2 | A2 | |||||||||||||||
Standard and Poor’s | A | A | A | A | A | |||||||||||||||
Fitch | A | A | A | A | A | |||||||||||||||
Customers (year-end) : | ||||||||||||||||||||
Residential | 354,466 | 343,151 | 341,935 | 333,757 | 327,128 | |||||||||||||||
Commercial | 53,398 | 51,865 | 51,169 | 49,411 | 48,654 | |||||||||||||||
Industrial | 298 | 285 | 285 | 281 | 270 | |||||||||||||||
Other | 479 | 473 | 473 | 474 | 468 | |||||||||||||||
Total | 408,641 | 395,774 | 393,862 | 383,923 | 376,520 | |||||||||||||||
Employees(year-end) | 1,335 | 1,336 | 1,337 | 1,339 | 1,309 | |||||||||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) : | ||||||||||||||||||||
Residential | $ | 465,346 | $ | 401,382 | $ | 381,464 | $ | 365,693 | $ | 313,165 | ||||||||||
Commercial | 273,114 | 232,928 | 218,928 | 207,960 | 188,759 | |||||||||||||||
Industrial | 123,044 | 99,420 | 95,702 | 89,385 | 81,719 | |||||||||||||||
Other | 3,355 | 3,140 | 3,080 | 2,798 | 948 | |||||||||||||||
Total retail | 864,859 | 736,870 | 699,174 | 665,836 | 584,591 | |||||||||||||||
Sales for resale — non-affiliates | 84,346 | 73,537 | 76,767 | 77,171 | 82,252 | |||||||||||||||
Sales for resale — affiliates | 91,352 | 110,264 | 63,268 | 40,391 | 27,256 | |||||||||||||||
Total revenues from sales of electricity | 1,040,557 | 920,671 | 839,209 | 783,398 | 694,099 | |||||||||||||||
Other revenues | 43,065 | 39,460 | 38,488 | 37,069 | 31,104 | |||||||||||||||
Total | $ | 1,083,622 | $ | 960,131 | $ | 877,697 | $ | 820,467 | $ | 725,203 | ||||||||||
Kilowatt-Hour Sales (in thousands) : | ||||||||||||||||||||
Residential | 5,319,630 | 5,215,332 | 5,101,099 | 5,143,802 | 4,716,404 | |||||||||||||||
Commercial | 3,735,776 | 3,695,471 | 3,614,255 | 3,552,931 | 3,417,427 | |||||||||||||||
Industrial | 2,160,760 | 2,113,027 | 2,146,956 | 2,053,668 | 2,018,206 | |||||||||||||||
Other | 22,730 | 22,579 | 22,479 | 21,496 | 21,208 | |||||||||||||||
Total retail | 11,238,896 | 11,046,409 | 10,884,789 | 10,771,897 | 10,173,245 | |||||||||||||||
Sales for resale — non-affiliates | 2,295,850 | 2,256,942 | 2,504,211 | 2,156,741 | 2,093,203 | |||||||||||||||
Sales for resale — affiliates | 1,976,368 | 3,124,788 | 2,438,874 | 1,720,240 | 962,892 | |||||||||||||||
Total | 15,511,114 | 16,428,139 | 15,827,874 | 14,648,878 | 13,229,340 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents) : | ||||||||||||||||||||
Residential | 8.75 | 7.70 | 7.48 | 7.11 | 6.64 | |||||||||||||||
Commercial | 7.31 | 6.30 | 6.06 | 5.85 | 5.52 | |||||||||||||||
Industrial | 5.69 | 4.71 | 4.46 | 4.35 | 4.05 | |||||||||||||||
Total retail | 7.70 | 6.67 | 6.42 | 6.18 | 5.75 | |||||||||||||||
Sales for resale | 4.11 | 3.42 | 2.83 | 3.03 | 3.58 | |||||||||||||||
Total sales | 6.71 | 5.60 | 5.30 | 5.35 | 5.25 | |||||||||||||||
Residential Average Annual Kilowatt-Hour Use Per Customer | 15,181 | 15,096 | 15,064 | 15,510 | 14,497 | |||||||||||||||
Residential Average Annual Revenue Per Customer | $ | 1,328 | $ | 1,162 | $ | 1,126 | $ | 1,100 | $ | 963 | ||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 2,712 | 2,712 | 2,786 | 2,809 | 2,188 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts) : | ||||||||||||||||||||
Winter | 2,124 | 2,061 | 2,494 | 2,182 | 2,106 | |||||||||||||||
Summer | 2,433 | 2,421 | 2,269 | 2,454 | 2,223 | |||||||||||||||
Annual Load Factor (percent) | 57.7 | 57.1 | 54.6 | 55.3 | 57.5 | |||||||||||||||
Plant Availability Fossil-Steam (percent) | 89.7 | 92.4 | 90.7 | 90.6 | 90.1 | |||||||||||||||
Source of Energy Supply (percent) : | ||||||||||||||||||||
Coal | 79.7 | 77.9 | 78.7 | 69.8 | 81.2 | |||||||||||||||
Gas | 13.1 | 14.4 | 11.9 | 15.5 | 1.0 | |||||||||||||||
Purchased power — | ||||||||||||||||||||
From non-affiliates | 2.8 | 4.5 | 3.2 | 4.6 | 6.5 | |||||||||||||||
From affiliates | 4.4 | 3.2 | 6.2 | 10.1 | 11.3 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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2005 | 2005 | |||||||
Key Performance | Target | Actual | ||||||
Indicator | Performance | Performance | ||||||
Customer Satisfaction | Top quartile in customer surveys | Top quartile | ||||||
Plant Availability- Peak Season EFOR | 3.0% or less | 1.51 | %* | |||||
Net Income (in millions) | $ | 77.8 | $ | 73.8 |
* | Excludes effects of Hurricane Katrina. Including Hurricane Katrina EFOR was 15.14%. |
Increase (Decrease) | ||||||||||||||||
Amount | From Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in thousands) | ||||||||||||||||
Operating revenues | $ | 969,733 | $ | 59,407 | $ | 40,402 | $ | 45,759 | ||||||||
Fuel | 358,572 | 33,690 | 95,189 | (52,700 | ) | |||||||||||
Purchased power | 143,492 | 36,729 | 13,566 | 41,864 | ||||||||||||
Other operation and maintenance | 239,622 | 2,144 | (62,198 | ) | 67,663 | |||||||||||
Depreciation and amortization | 33,549 | (5,841 | ) | (16,310 | ) | (1,938 | ) | |||||||||
Taxes other than income taxes | 60,058 | 4,486 | 1,581 | (1,527 | ) | |||||||||||
Total operating expenses | 835,293 | 71,208 | 31,828 | 53,362 | ||||||||||||
Operating income | 134,440 | (11,801 | ) | 8,574 | (7,603 | ) | ||||||||||
Total other income and (expense) | (12,525 | ) | 2,417 | 1,898 | 7,525 | |||||||||||
Less — | ||||||||||||||||
Income taxes | 46,374 | (4,292 | ) | 5,351 | (564 | ) | ||||||||||
Net income | 75,541 | (5,092 | ) | 5,121 | 486 | |||||||||||
Dividends on preferred stock | 1,733 | (2,099 | ) | 1,819 | — | |||||||||||
Net income after dividends on preferred stock | $ | 73,808 | $ | (2,993 | ) | $ | 3,302 | $ | 486 | |||||||
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Amount | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Retail — prior year | $ | 584,313 | $ | 516,301 | $ | 536,827 | ||||||
Change in - | ||||||||||||
Sales growth and weather | (15,734 | ) | 3,555 | (367 | ) | |||||||
Fuel cost recovery and other | 50,281 | 64,457 | (20,159 | ) | ||||||||
Retail — current year | 618,860 | 584,313 | 516,301 | |||||||||
Sales for resale — | ||||||||||||
Non-affiliates | 283,413 | 265,863 | 249,986 | |||||||||
Affiliates | 50,460 | 44,371 | 26,723 | |||||||||
Total sales for resale | 333,873 | 310,234 | 276,709 | |||||||||
Contract termination | — | — | 62,111 | |||||||||
Other electric operating revenues | 17,000 | 15,779 | 14,803 | |||||||||
Total electric operating revenues | $ | 969,733 | $ | 910,326 | $ | 869,924 | ||||||
Percent change | 6.5 | % | 4.6 | % | 5.6 | % | ||||||
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KWH | Percent Change | |||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Residential | 2,180 | (5.1 | )% | 1.9 | % | (1.9 | )% | |||||||||||||||||
Commercial | 2,725 | (8.2 | ) | 1.9 | 0.4 | |||||||||||||||||||
Industrial | 3,798 | (10.3 | ) | 3.0 | (1.2 | ) | ||||||||||||||||||
Other | 38 | (5.8 | ) | 1.0 | — | |||||||||||||||||||
Total retail | 8,741 | (8.4 | ) | 2.4 | (0.9 | ) | ||||||||||||||||||
Sales for resale | ||||||||||||||||||||||||
Non-affiliated | 4,811 | (20.2 | ) | 2.6 | 9.2 | |||||||||||||||||||
Affiliated | 897 | (14.9 | ) | 48.6 | (55.3 | ) | ||||||||||||||||||
Total | 14,449 | (13.1 | ) | 4.5 | (2.8 | ) | ||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||
Total generation (millions of KWHs) | 12,499 | 14,058 | 12,850 | |||||||||
Sources of generation(percent) — | ||||||||||||
Coal | 70 | 69 | 74 | |||||||||
Gas | 30 | 31 | 26 | |||||||||
Average cost of fuel per net KWH generated(cents) | 3.11 | 2.50 | 1.96 | |||||||||
Average cost of purchased power per net KWH(cents) | 5.44 | 3.28 | 2.51 | |||||||||
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. | |
• | Changes in existing income tax regulations or changes in Internal Revenue Service interpretations of existing regulations. | |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which the Company may be asserted to be a potentially responsible party. | |
• | Identification and evaluation of other potential lawsuits or complaints in which the Company may be named as a defendant. | |
• | Resolution or progression of existing matters through the legislative process, the court systems, or the EPA. |
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• | Fair market value of the Facility at lease inception. | |
• | The Company’s incremental borrowing rate. | |
• | Timing of debt payments and the related amortization of the initial acquisition cost during the initial lease term. | |
• | Residual value of the Facility at the end of the lease term. | |
• | Estimated economic life of the Facility. | |
• | Juniper’s status as a voting interest entity. |
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Change in Fair Value | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Contracts beginning of year | $ | 889 | $ | 2,470 | ||||
Contracts realized or settled | (13,816 | ) | (9,181 | ) | ||||
Current period changes (a) | 40,033 | 7,600 | ||||||
Contracts end of year | $ | 27,106 | $ | 889 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of Year-End Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | Year 1 | 2-3 Years | ||||||||||
(in thousands) | ||||||||||||
Actively quoted | $ | 27,645 | $ | 19,998 | $ | 7,647 | ||||||
External sources | (539 | ) | (539 | ) | — | |||||||
Models and other methods | — | — | — | |||||||||
Contracts end of year | $ | 27,106 | $ | 19,459 | $ | 7,647 | ||||||
Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 27,463 | ||
Other comprehensive income | (342 | ) | ||
Net income | (15 | ) | ||
Total fair value | $ | 27,106 | ||
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2007- | 2009- | After | ||||||||||||||||||
2006 | 2008 | 2010 | 2010 | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Long-term debt and preferred securities(a) — | ||||||||||||||||||||
Principal | $ | 100,000 | $ | — | $ | 40,000 | $ | 238,777 | $ | 378,777 | ||||||||||
Interest | 14,137 | 28,274 | 26,418 | 287,922 | 356,751 | |||||||||||||||
Commodity derivative obligations(b) | 969 | 105 | — | — | 1,074 | |||||||||||||||
Preferred stock dividends(c) | 1,728 | 3,456 | 3,456 | — | 8,640 | |||||||||||||||
Operating leases | 33,927 | 65,371 | 61,908 | 32,513 | 193,719 | |||||||||||||||
Purchase commitments(d) | ||||||||||||||||||||
Capital(e) | 126,000 | 251,000 | — | — | 377,000 | |||||||||||||||
Coal | 184,342 | 82,690 | — | — | 267,032 | |||||||||||||||
Natural gas(f) | 168,311 | 137,809 | 11,876 | 42,269 | 360,265 | |||||||||||||||
Long-term service agreements | 13,198 | 22,796 | 23,219 | 95,538 | 154,751 | |||||||||||||||
Post retirement benefit trust(g) | 260 | 520 | — | — | 780 | |||||||||||||||
Total | $ | 642,872 | $ | 592,021 | $ | 166,877 | $ | 697,019 | $ | 2,098,789 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. | |
(b) | For additional information, see Notes 1 and 6 to the financial statements herein. | |
(c) | Preferred stock does not mature; therefore, amounts are provided for the next five years only. | |
(d) | The Company generally does not enter into non-cancelable commitments for other operation and maintenance expenditures. Total other operation and maintenance expenses for the last three years were $240 million, $237 million, and $300 million, respectively. | |
(e) | The Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(f) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(g) | The Company forecasts postretirement trust contributions over a three-year period. No contributions related to the Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from the Company’s corporate assets. |
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• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax, and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; | |
• | current and future litigation, regulatory investigations, proceedings or inquiries, including FERC matters, and EPA civil actions; | |
• | the effects, extent and timing of the entry of additional competition in the markets in which the Company operates; | |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population, and business growth (and declines); | |
• | available sources and costs of fuels; | |
• | ability to control costs; | |
• | investment performance of the Company’s employee benefit plans; | |
• | advances in technology; | |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; | |
• | internal restructuring or other restructuring options that may be pursued; | |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to the Company; | |
• | the ability of counterparties of the Company to make payments as and when due; | |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; | |
• | the direct or indirect effect on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; | |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; | |
• | the ability of the Company to obtain additional generating capacity at competitive prices; | |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, or other similar occurrences; | |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; | |
• | the effect of accounting pronouncements issued periodically by standard setting bodies; and | |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Company from time to time with the Securities and Exchange Commission. |
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For the Years Ended December 31, 2005, 2004, and 2003
Mississippi Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 618,860 | $ | 584,313 | $ | 516,301 | ||||||
Sales for resale — | ||||||||||||
Non-affiliates | 283,413 | 265,863 | 249,986 | |||||||||
Affiliates | 50,460 | 44,371 | 26,723 | |||||||||
Contract termination | — | — | 62,111 | |||||||||
Other revenues | 17,000 | 15,779 | 14,803 | |||||||||
Total operating revenues | 969,733 | 910,326 | 869,924 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 358,572 | 324,882 | 229,693 | |||||||||
Purchased power — | ||||||||||||
Non-affiliates | 32,208 | 33,528 | 18,523 | |||||||||
Affiliates | 111,284 | 73,235 | 74,674 | |||||||||
Other operations — | ||||||||||||
Plant Daniel capacity | — | — | 60,300 | |||||||||
Other | 168,355 | 160,477 | 169,333 | |||||||||
Maintenance | 71,267 | 77,001 | 70,043 | |||||||||
Depreciation and amortization | 33,549 | 39,390 | 55,700 | |||||||||
Taxes other than income taxes | 60,058 | 55,572 | 53,991 | |||||||||
Total operating expenses | 835,293 | 764,085 | 732,257 | |||||||||
Operating Income | 134,440 | 146,241 | 137,667 | |||||||||
Other Income and (Expense): | ||||||||||||
Interest income | 1,718 | 777 | 617 | |||||||||
Interest expense | (11,230 | ) | (11,776 | ) | (14,369 | ) | ||||||
Interest expense to affiliate trust | (2,598 | ) | (1,948 | ) | — | |||||||
Distributions on mandatorily redeemable preferred securities | — | (630 | ) | (2,520 | ) | |||||||
Other income (expense), net | (415 | ) | (1,365 | ) | (568 | ) | ||||||
Total other income and (expense) | (12,525 | ) | (14,942 | ) | (16,840 | ) | ||||||
Earnings Before Income Taxes | 121,915 | 131,299 | 120,827 | |||||||||
Income taxes | 46,374 | 50,666 | 45,315 | |||||||||
Net Income | 75,541 | 80,633 | 75,512 | |||||||||
Dividends on Preferred Stock | 1,733 | 3,832 | 2,013 | |||||||||
Net Income After Dividends on Preferred Stock | $ | 73,808 | $ | 76,801 | $ | 73,499 | ||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Mississippi Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 75,541 | $ | 80,633 | $ | 75,512 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 63,319 | 60,260 | 60,226 | |||||||||
Deferred income taxes and investment tax credits, net | 118,316 | 44,424 | (8,562 | ) | ||||||||
Plant Daniel capacity | (25,125 | ) | (16,508 | ) | 60,300 | |||||||
Pension, postretirement, and other employee benefits | 2,938 | (1,084 | ) | (1,014 | ) | |||||||
Tax benefit of stock options | 3,723 | 1,532 | 3,018 | |||||||||
Other, net | 1,493 | (1,823 | ) | 1,816 | ||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (107,836 | ) | (26,250 | ) | 20,864 | |||||||
Fossil fuel stock | (25,745 | ) | 5,528 | 2,070 | ||||||||
Materials and supplies | (6,234 | ) | (3,768 | ) | (1,607 | ) | ||||||
Prepaid income taxes | (40,059 | ) | 3,419 | (5,638 | ) | |||||||
Other current assets | (2,498 | ) | (2,018 | ) | 6,807 | |||||||
Hurricane Katrina accounts payable | (82,102 | ) | — | — | ||||||||
Other accounts payable | 40,255 | (5,555 | ) | (20,602 | ) | |||||||
Accrued taxes | 4,001 | 151 | (8,976 | ) | ||||||||
Accrued compensation | 674 | 82 | (2,568 | ) | ||||||||
Over recovered regulatory clause revenues | 20,831 | (25,761 | ) | 694 | ||||||||
Other current liabilities | 441 | 6,052 | 3,264 | |||||||||
Net cash provided from operating activities | 41,933 | 119,314 | 185,604 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (158,084 | ) | (72,066 | ) | (72,134 | ) | ||||||
Cost of removal net of salvage | (26,140 | ) | (3,189 | ) | (5,811 | ) | ||||||
Construction payables | 16,417 | 1,243 | (1,414 | ) | ||||||||
Other | (2,655 | ) | (2,066 | ) | — | |||||||
Net cash used for investing activities | (170,462 | ) | (76,078 | ) | (79,359 | ) | ||||||
Financing Activities: | ||||||||||||
Increase in notes payable, net | 202,124 | — | — | |||||||||
Proceeds — | ||||||||||||
Senior notes | 30,000 | 40,000 | 90,000 | |||||||||
Preferred stock | — | 30,000 | — | |||||||||
Capital contributions from parent company | (25 | ) | 1,791 | 4,912 | ||||||||
Redemptions — | ||||||||||||
First mortgage bonds | (30,000 | ) | — | (33,350 | ) | |||||||
Pollution control bonds | — | — | (850 | ) | ||||||||
Senior notes | — | (80,000 | ) | (86,628 | ) | |||||||
Preferred stock | — | (28,388 | ) | — | ||||||||
Payment of preferred stock dividends | (1,733 | ) | (1,829 | ) | (2,013 | ) | ||||||
Payment of common stock dividends | (62,000 | ) | (66,200 | ) | (66,000 | ) | ||||||
Other | (2,481 | ) | (785 | ) | (5,891 | ) | ||||||
Net cash provided from (used for) financing activities | 135,885 | (105,411 | ) | (99,820 | ) | |||||||
Net Change in Cash and Cash Equivalents | 7,356 | (62,175 | ) | 6,425 | ||||||||
Cash and Cash Equivalents at Beginning of Year | 6,945 | 69,120 | 62,695 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 14,301 | $ | 6,945 | $ | 69,120 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for — | ||||||||||||
Interest | $ | 13,499 | $ | 12,084 | $ | 17,334 | ||||||
Income taxes (net of refunds) | (40,801 | ) | 6,654 | 60,618 | ||||||||
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At December 31, 2005 and 2004
Mississippi Power Company 2005 Annual Report
2005 | 2004 | |||||||
(in thousands) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 14,301 | $ | 6,945 | ||||
Receivables — | ||||||||
Customer accounts receivable | 36,747 | 32,978 | ||||||
Unbilled revenues | 20,267 | 20,803 | ||||||
Under recovered regulatory clause revenues | 120,653 | 32,499 | ||||||
Other accounts and notes receivable | 21,503 | 8,881 | ||||||
Insurance receivable | 60,163 | — | ||||||
Affiliated companies | 19,595 | 15,769 | ||||||
Accumulated provision for uncollectible accounts | (2,321 | ) | (774 | ) | ||||
Fossil fuel stock, at average cost | 45,449 | 19,704 | ||||||
Materials and supplies, at average cost | 33,673 | 27,438 | ||||||
Assets from risk management activities | 20,429 | 4,471 | ||||||
Prepaid income taxes | 42,278 | 5,814 | ||||||
Other | 12,625 | 12,741 | ||||||
Total current assets | 445,362 | 187,269 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 1,987,294 | 1,882,542 | ||||||
Less accumulated provision for depreciation | 803,754 | 697,862 | ||||||
1,183,540 | 1,184,680 | |||||||
Construction work in progress | 52,225 | 27,961 | ||||||
Total property, plant, and equipment | 1,235,765 | 1,212,641 | ||||||
Other Property and Investments | 6,825 | 6,402 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 9,863 | 10,668 | ||||||
Prepaid pension costs | 17,264 | 19,158 | ||||||
Deferred property damage | 209,324 | — | ||||||
Other | 56,866 | 42,975 | ||||||
Total deferred charges and other assets | 293,317 | 72,801 | ||||||
Total Assets | $ | 1,981,269 | $ | 1,479,113 | ||||
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At December 31, 2005 and 2004
Mississippi Power Company 2005 Annual Report
2005 | 2004 | |||||||
(in thousands) | ||||||||
Liabilities and Stockholder’s Equity | ||||||||
Current Liabilities: | ||||||||
Notes payable | $ | 202,124 | $ | — | ||||
Accounts payable — | ||||||||
Affiliated | 122,899 | 19,568 | ||||||
Other | 89,598 | 52,688 | ||||||
Customer deposits | 7,298 | 9,053 | ||||||
Accrued taxes — | ||||||||
Income taxes | 17,736 | 396 | ||||||
Other | 48,296 | 44,285 | ||||||
Accrued interest | 3,408 | 1,731 | ||||||
Accrued compensation | 24,587 | 23,913 | ||||||
Regulatory clauses over recovery | 26,188 | 5,356 | ||||||
Plant Daniel capacity | 13,008 | 25,125 | ||||||
Other | 40,334 | 27,067 | ||||||
Total current liabilities | 595,476 | 209,182 | ||||||
Long-term Debt(See accompanying statements) | 242,548 | 242,498 | ||||||
Long-term Debt Payable to Affiliated Trust(See accompanying statements) | 36,082 | 36,082 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 266,629 | 167,345 | ||||||
Deferred credits related to income taxes | 19,003 | 20,261 | ||||||
Accumulated deferred investment tax credits | 17,465 | 18,654 | ||||||
Employee benefit obligations | 58,318 | 57,275 | ||||||
Other cost of removal obligations | 81,284 | 76,228 | ||||||
Other regulatory liabilities | 13,411 | 23,154 | ||||||
Other | 57,113 | 49,817 | ||||||
Total deferred credits and other liabilities | 513,223 | 412,734 | ||||||
Total Liabilities | 1,387,329 | 900,496 | ||||||
Preferred Stock(See accompanying statements) | 32,780 | 32,780 | ||||||
Common Stockholder’s Equity(See accompanying statements) | 561,160 | 545,837 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 1,981,269 | $ | 1,479,113 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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At December 31, 2005 and 2004
Mississippi Power Company 2005 Annual Report
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long-Term Debt: | ||||||||||||||||
First mortgage bonds — 6.875% due 2025 | $ | — | $ | 30,000 | ||||||||||||
Long-term notes payable — | ||||||||||||||||
5.4% to 5.625% due 2033-2035 | 120,000 | 90,000 | ||||||||||||||
Adjustable rates (4.64% at 1/1/06) due 2009 | 40,000 | 40,000 | ||||||||||||||
Total long-term notes payable | 160,000 | 130,000 | ||||||||||||||
Other long-term debt — | ||||||||||||||||
Pollution control revenue bonds — non-collateralized: | ||||||||||||||||
Variable rates (3.45% to 3.87% at 1/1/06) due 2020-2028 | 82,695 | 82,695 | ||||||||||||||
Unamortized debt premium (discount), net | (147 | ) | (197 | ) | ||||||||||||
Total long-term debt (annual interest requirement — $11.5 million) | 242,548 | 242,498 | 27.8 | % | 28.3 | % | ||||||||||
Long-term Debt Payable to Affiliated Trust: | ||||||||||||||||
7.20% due 2041 (annual interest requirement — $2.6 million) | 36,082 | 36,082 | 4.1 | 4.2 | ||||||||||||
Cumulative Preferred Stock: | ||||||||||||||||
$100 par value | ||||||||||||||||
Authorized — 1,244,139 shares | ||||||||||||||||
Outstanding — 334,210 shares | ||||||||||||||||
4.40% to 5.25% (annual dividend requirement — $1.7 million) | 32,780 | 32,780 | 3.8 | 3.8 | ||||||||||||
Common Stockholder’s Equity: | ||||||||||||||||
Common stock, without par value — | ||||||||||||||||
Authorized - 1,130,000 shares | ||||||||||||||||
Outstanding - 1,121,000 shares | 37,691 | 37,691 | ||||||||||||||
Paid-in capital | 299,536 | 295,837 | ||||||||||||||
Retained earnings | 227,701 | 215,893 | ||||||||||||||
Accumulated other comprehensive income (loss) | (3,768 | ) | (3,584 | ) | ||||||||||||
Total common stockholder’s equity | 561,160 | 545,837 | 64.3 | 63.7 | ||||||||||||
Total Capitalization | $ | 872,570 | $ | 857,197 | 100.0 | % | 100.0 | % | ||||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Mississippi Power Company 2005 Annual Report
Other | ||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2002 | $ | 37,691 | $ | 285,606 | $ | 195,920 | $ | (1,264 | ) | $ | 517,953 | |||||||||
Net income after dividends on preferred stock | — | — | 73,499 | — | 73,499 | |||||||||||||||
Capital contributions from parent company | — | 7,235 | — | — | 7,235 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (198 | ) | (198 | ) | |||||||||||||
Cash dividends on common stock | — | — | (66,000 | ) | — | (66,000 | ) | |||||||||||||
Balance at December 31, 2003 | 37,691 | 292,841 | 203,419 | (1,462 | ) | 532,489 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 76,801 | — | 76,801 | |||||||||||||||
Capital contributions from parent company | — | 3,323 | — | — | 3,323 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (2,122 | ) | (2,122 | ) | |||||||||||||
Cash dividends on common stock | — | — | (66,200 | ) | — | (66,200 | ) | |||||||||||||
Other | — | (327 | ) | 1,873 | — | 1,546 | ||||||||||||||
Balance at December 31, 2004 | 37,691 | 295,837 | 215,893 | (3,584 | ) | 545,837 | ||||||||||||||
Net income after dividends on preferred stock | — | — | 73,808 | — | 73,808 | |||||||||||||||
Capital contributions from parent company | — | 3,699 | — | — | 3,699 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (184 | ) | (184 | ) | |||||||||||||
Cash dividends on common stock | — | — | (62,000 | ) | — | (62,000 | ) | |||||||||||||
Balance at December 31, 2005 | $ | 37,691 | $ | 299,536 | $ | 227,701 | $ | (3,768 | ) | $ | 561,160 | |||||||||
For the Years Ended December 31, 2005, 2004, and 2003
Mississippi Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
Net income after dividends on preferred stock | $ | 73,808 | $ | 76,801 | $ | 73,499 | ||||||
Other comprehensive income (loss): | ||||||||||||
Change in additional minimum pension liability, net of tax of $(167), $(1,131) and $(123), respectively | (269 | ) | (1,825 | ) | (198 | ) | ||||||
Change in fair value of marketable securities, net of tax of $49 | — | 80 | — | |||||||||
Changes in fair value of qualifying hedges, net of tax of $53 and $(184), respectively | 85 | (297 | ) | — | ||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $(49) | — | (80 | ) | — | ||||||||
Total other comprehensive income (loss) | (184 | ) | (2,122 | ) | (198 | ) | ||||||
Comprehensive Income | $ | 73,624 | $ | 74,679 | $ | 73,301 | ||||||
Table of Contents
Mississippi Power Company 2005 Annual Report
Table of Contents
Mississippi Power Company 2005 Annual Report
2005 | 2004 | Note | ||||||||
(in thousands) | ||||||||||
Hurricane Katrina | $ | 209,324 | $ | — | (i) | |||||
Property Damage | (500 | ) | (5,035 | ) | (g) | |||||
Deferred income tax charges | 10,443 | 11,358 | (a) | |||||||
Property tax | 15,148 | 11,199 | (b) | |||||||
Vacation pay | 6,954 | 6,125 | (c) | |||||||
Loss on reacquired debt | 10,381 | 9,437 | (d) | |||||||
Loss on redeemed preferred stock | 914 | 1,086 | (e) | |||||||
Other regulatory assets | 405 | 460 | ||||||||
Fuel-hedging assets | 232 | 2,666 | (f) | |||||||
Asset retirement obligations | 10,668 | 1,398 | (a) | |||||||
Deferred income tax credits | (20,559 | ) | (21,789 | ) | (a) | |||||
Other cost of removal obligations | (81,284 | ) | (76,228 | ) | (a) | |||||
Plant Daniel capacity | (18,667 | ) | (43,792 | ) | (h) | |||||
Fuel-hedging liabilities | (27,695 | ) | (4,027 | ) | (f) | |||||
Other liabilities | (660 | ) | (142 | ) | (g) | |||||
Total | $ | 115,104 | $ | (107,284 | ) | |||||
Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows: | ||
(a) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered and deferred tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(b) | Recovered through the ad valorem tax adjustment clause over a 12-month period beginning in April of the following year. | |
(c) | Recorded as earned by employees and recovered as paid, generally within one year. | |
(d) | Recovered over the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years. | |
(e) | Amortized over a period beginning in 2004 that is not to exceed seven years. | |
(f) | Fuel-hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed two years. Upon final settlement, costs are recovered through the Energy Cost Management clause (ECM). | |
(g) | Recorded and recovered as approved by the Mississippi PSC. | |
(h) | Amortized over a four-year period ending in 2007. | |
(i) | For additional information, see Note 3 under “Retail Regulatory Matters — Storm Damage Cost Recovery.” |
Table of Contents
Mississippi Power Company 2005 Annual Report
2005 | 2004 | |||||||
Generation | $ | 833,598 | $ | 824,755 | ||||
Transmission | 390,961 | 377,717 | ||||||
Distribution | 624,769 | 547,231 | ||||||
General | 137,966 | 132,839 | ||||||
Total plant in service | $ | 1,987,294 | $ | 1,882,542 | ||||
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2005 | 2004 | |||||||
(in millions) | ||||||||
Balance, beginning of year | $ | 5.5 | $ | 2.5 | ||||
Liabilities incurred | 9.5 | — | ||||||
Liabilities settled | — | — | ||||||
Accretion | 0.4 | 0.2 | ||||||
Cash flow revisions | — | 2.8 | ||||||
Balance, end of year | $ | 15.4 | $ | 5.5 | ||||
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As | Option | Pro | ||||||||||
Reported | Impact | Forma | ||||||||||
(in thousands) | ||||||||||||
2005 | $ | 73,808 | $ | (648 | ) | $ | 73,160 | |||||
2004 | 76,801 | (682 | ) | 76,119 | ||||||||
2003 | 73,499 | (758 | ) | 72,741 | ||||||||
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.9 | % | 3.1 | % | 2.7 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.9 | % | 19.6 | % | 23.6 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 | ||||||
Carrying | Fair | |||||||
Amount | Value | |||||||
(in thousands) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 278,630 | $ | 273,278 | ||||
2004 | $ | 278,580 | $ | 282,884 | ||||
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Projected | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 232,658 | $ | 207,689 | ||||
Service cost | 6,566 | 6,153 | ||||||
Interest cost | 13,089 | 12,249 | ||||||
Benefits paid | (10,703 | ) | (10,564 | ) | ||||
Actuarial loss and employee transfers | 12,080 | 16,342 | ||||||
Amendments | 1,347 | 789 | ||||||
Balance at end of year | $ | 255,037 | $ | 232,658 | ||||
Plan Assets | |||||||||
2005 | 2004 | ||||||||
(in thousands) | |||||||||
Balance at beginning of year | $ | 222,543 | $ | 210,285 | |||||
Actual return on plan assets | 33,654 | 20,419 | |||||||
Benefits paid | (9,497 | ) | (8,985 | ) | |||||
Employee transfers | (429 | ) | 824 | ||||||
Balance at end of year | $ | 246,271 | $ | 222,543 | |||||
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Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | (8,767 | ) | $ | (10,115 | ) | ||
Unrecognized transition obligation | (545 | ) | (1,090 | ) | ||||
Unrecognized prior service cost | 14,288 | 14,423 | ||||||
Unrecognized net gain (loss) | 3,915 | 8,315 | ||||||
Prepaid pension asset, net | $ | 8,891 | $ | 11,533 | ||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Prepaid pension asset | $ | 17,264 | $ | 19,158 | ||||
Employee benefit obligations | (16,357 | ) | (15,394 | ) | ||||
Other property and investment- other | 2,224 | 2,445 | ||||||
Accumulated other comprehensive income | 5,760 | 5,324 | ||||||
Prepaid pension, net | $ | 8,891 | $ | 11,533 | ||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Service cost | $ | 6,566 | $ | 6,153 | $ | 5,607 | ||||||
Interest cost | 13,089 | 12,249 | 11,965 | |||||||||
Expected return on plan assets | (18,437 | ) | (18,325 | ) | (18,329 | ) | ||||||
Recognized net (gain) loss | 526 | 865 | (1,847 | ) | ||||||||
Net amortization | 937 | (361 | ) | 862 | ||||||||
Net pension (income) expense | $ | 2,681 | $ | 581 | $ | (1,742 | ) | |||||
2005 | ||||
(in thousands) | ||||
2006 | $ | 11,112 | ||
2007 | 11,138 | |||
2008 | 11,288 | |||
2009 | 11,648 | |||
2010 | 11,987 | |||
2011 to 2015 | $ | 70,609 | ||
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Accumulated | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 75,435 | $ | 72,186 | ||||
Service cost | 1,427 | 1,330 | ||||||
Interest cost | 4,242 | 4,015 | ||||||
Benefits paid | (3,937 | ) | (3,364 | ) | ||||
Actuarial (gain) loss | 9,315 | 1,268 | ||||||
Balance at end of year | $ | 86,482 | $ | 75,435 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 20,183 | $ | 18,185 | ||||
Actual return on plan assets | 2,462 | 1,868 | ||||||
Employer contributions | 4,051 | 3,494 | ||||||
Benefits paid | (3,937 | ) | (3,364 | ) | ||||
Balance at end of year | $ | 22,759 | $ | 20,183 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 28 | % | 31 | % | 27 | % | ||||||
International equity | 18 | 18 | 15 | |||||||||
Fixed income | 35 | 36 | 45 | |||||||||
Real estate | 11 | 10 | 8 | |||||||||
Private equity | 8 | 5 | 5 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
Accrued Costs | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | (63,723 | ) | $ | (55,253 | ) | ||
Unrecognized transition obligation | 2,543 | 2,889 | ||||||
Unrecognized prior service cost | 1,398 | 1,504 | ||||||
Unrecognized net gain | 26,919 | 19,211 | ||||||
Fourth quarter contributions | 902 | 779 | ||||||
Accrued liability recognized in the Balance Sheets | $ | (31,961 | ) | $ | (30,870 | ) | ||
Net Periodic Costs | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(in thousands) | |||||||||||||
Service cost | $ | 1,427 | $ | 1,330 | $ | 1,149 | |||||||
Interest cost | 4,242 | 4,015 | 3,898 | ||||||||||
Expected return on Plan assets | (1,563 | ) | (1,716 | ) | (1,598 | ) | |||||||
Transition obligation | 346 | 346 | 346 | ||||||||||
Prior service cost | 106 | 106 | 106 | ||||||||||
Recognized net loss | 706 | 408 | 116 | ||||||||||
Net postretirement cost | $ | 5,264 | $ | 4,489 | $ | 4,017 | |||||||
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Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in thousands) | ||||||||||||
2006 | $ | 4,092 | $ | (418 | ) | $ | 3,674 | |||||
2007 | 4,433 | (508 | ) | 3,925 | ||||||||
2008 | 4,779 | (576 | ) | 4,203 | ||||||||
2009 | 5,186 | (627 | ) | 4,559 | ||||||||
2010 | 5,521 | (687 | ) | 4,834 | ||||||||
2011 to 2015 | $ | 31,273 | $(4,775 | ) | $ | 26,498 | ||||||
2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | 3.50 | 3.75 | |||||||||
Long-term return on plan assets | 8.50 | 8.50 | 8.50 | |||||||||
1 Percent | ||||||||
Increase | Decrease | |||||||
(in thousands) | ||||||||
Benefit obligation | $ | 6,456 | $ | 5,815 | ||||
Service and interest costs | 498 | 392 | ||||||
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Generating | Percent | Gross | Accumulated | |||||||||
Plant | Ownership | Investment | Depreciation | |||||||||
(in thousands) | ||||||||||||
Greene County | ||||||||||||
Units 1 and 2 | 40 | % | $ | 73,722 | $ | 40,172 | ||||||
Daniel | ||||||||||||
Units 1 and 2 | 50 | % | $ | 255,712 | $ | 129,510 | ||||||
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Federal — | ||||||||||||
Current | $ | (61,933 | ) | $ | 3,700 | $ | 46,116 | |||||
Deferred | 102,659 | 40,350 | (6,166 | ) | ||||||||
40,726 | 44,050 | 39,950 | ||||||||||
State — | ||||||||||||
Current | (10,009 | ) | 2,542 | 7,761 | ||||||||
Deferred | 15,657 | 4,074 | (2,396 | ) | ||||||||
5,648 | 6,616 | 5,365 | ||||||||||
Total | $ | 46,374 | $ | 50,666 | $ | 45,315 | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 269,188 | $ | 224,353 | ||||
Basis differences | 8,630 | 14,092 | ||||||
Fuel clause under recovered | 41,627 | 8,696 | ||||||
Other | 59,883 | 22,382 | ||||||
Total | 379,328 | 269,523 | ||||||
Deferred tax assets: | ||||||||
Federal effect of state deferred taxes | 13,642 | 7,639 | ||||||
Other property basis differences | 9,244 | 9,762 | ||||||
Pension and other benefits | 13,473 | 12,756 | ||||||
Property insurance | 3,618 | 4,108 | ||||||
Unbilled fuel | 7,660 | 6,225 | ||||||
Other comprehensive loss | 2,441 | 2,322 | ||||||
Other | 44,961 | 62,651 | ||||||
Total | 95,039 | 105,463 | ||||||
Total deferred tax liabilities, net | 284,289 | 164,060 | ||||||
Portion included in prepaid (accrued) income taxes, net | (17,660 | ) | 3,285 | |||||
Accumulated deferred income taxes in the balance sheets | $ | 266,629 | $ | 167,345 | ||||
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2005 | 2004 | 2003 | ||||||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||||||
State income tax, net of federal deduction | 3.0 | 3.3 | 2.9 | |||||||||||||
Non-deductible book Depreciation | 0.5 | 0.4 | 0.4 | |||||||||||||
Other | (0.5 | ) | (0.1 | ) | (0.8 | ) | ||||||||||
Effective income tax rate | 38.0 | % | 38.6 | % | 37.5 | % | ||||||||||
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 27,463 | ||
Other comprehensive income | (342 | ) | ||
Net income | (15 | ) | ||
Total fair value | $ | 27,106 | ||
7. | COMMITMENTS |
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Year | Natural Gas | Coal | ||||||
(in thousands) | ||||||||
2006 | $ | 168,311 | $ | 184,342 | ||||
2007 | 86,978 | 64,138 | ||||||
2008 | 50,831 | 18,552 | ||||||
2009 | 5,938 | — | ||||||
2010 | 5,938 | — | ||||||
2011 and thereafter | 42,269 | — | ||||||
Total commitments | $ | 360,265 | $ | 267,032 | ||||
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Year | Lease Payments | |||
(in thousands) | ||||
2006 | $ | 28,824 | ||
2007 | 28,718 | |||
2008 | 28,616 | |||
2009 | 28,504 | |||
2010 | 28,398 | |||
2011 and thereafter | 28,291 | |||
Total commitments | $ | 171,351 | ||
Average | ||||||||
Shares | Option | |||||||
Subject | Price | |||||||
to Option | per Share | |||||||
Balance at December 31, 2002 | 1,484,009 | $ | 19.86 | |||||
Options granted | 336,450 | 27.98 | ||||||
Options canceled | (2,882 | ) | 24.64 | |||||
Options exercised | (269,753 | ) | 16.35 | |||||
Balance at December 31, 2003 | 1,547,824 | 22.23 | ||||||
Options granted | 309,043 | 29.50 | ||||||
Options canceled | (1,395 | ) | 19.87 | |||||
Options exercised | (260,061 | ) | 17.00 | |||||
Balance at December 31, 2004 | 1,595,411 | 24.49 | ||||||
Options granted | 272,813 | 32.71 | ||||||
Options canceled | (1,314 | ) | 29.81 | |||||
Options exercised | (422,472 | ) | 21.67 | |||||
Balance at December 31, 2005 | 1,444,438 | $ | 26.86 | |||||
Options exercisable: | ||||||||
At December 31, 2003 | 794,374 | |||||||
At December 31, 2004 | 1,019,627 | |||||||
At December 31, 2005 | 920,511 | |||||||
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Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares(in thousands) | 191 | 679 | 575 | |||||||||
Average remaining life(in years) | 4.1 | 5.5 | 8.2 | |||||||||
Average exercise price | $ | 17.67 | $ | 25.93 | $ | 31.02 | ||||||
Exercisable: | ||||||||||||
Shares(in thousands) | 191 | 594 | 136 | |||||||||
Average exercise price | $ | 17.67 | $ | 25.64 | $ | 29.66 | ||||||
Net Income | ||||||||||||
After Dividends | ||||||||||||
Operating | Operating | On Preferred | ||||||||||
Quarter Ended | Revenues | Income | Stock | |||||||||
(in thousands) | ||||||||||||
March 2005 | $ | 215,210 | $ | 31,902 | $ | 16,947 | ||||||
June 2005 | 248,576 | 43,061 | 25,632 | |||||||||
September 2005 | 277,907 | 51,975 | 28,244 | |||||||||
December 2005 | 228,040 | 7,502 | 2,985 | |||||||||
March 2004 | $ | 209,728 | $ | 31,600 | $ | 17,319 | ||||||
June 2004 | 232,785 | 43,290 | 21,891 | |||||||||
September 2004 | 258,564 | 61,744 | 35,581 | |||||||||
December 2004 | 209,249 | 9,607 | 2,010 | |||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) | $ | 969,733 | $ | 910,326 | $ | 869,924 | $ | 824,165 | $ | 796,065 | ||||||||||
Net Income after Dividends on Preferred Stock (in thousands) | $ | 73,808 | $ | 76,801 | $ | 73,499 | $ | 73,013 | $ | 63,887 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 62,000 | $ | 66,200 | $ | 66,000 | $ | 63,500 | $ | 50,200 | ||||||||||
Return on Average Common Equity (percent) | 13.33 | 14.24 | 13.99 | 14.46 | 14.25 | |||||||||||||||
Total Assets (in thousands) | $ | 1,981,269 | $ | 1,479,113 | $ | 1,511,174 | $ | 1,482,040 | $ | 1,411,050 | ||||||||||
Gross Property Additions (in thousands) | $ | 158,084 | $ | 70,063 | $ | 69,345 | $ | 67,460 | $ | 61,193 | ||||||||||
Capitalization (in thousands) : | ||||||||||||||||||||
Common stock equity | $ | 561,160 | $ | 545,837 | $ | 532,489 | $ | 517,953 | $ | 491,680 | ||||||||||
Preferred stock | 32,780 | 32,780 | 31,809 | 31,809 | 31,809 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 35,000 | 35,000 | 35,000 | |||||||||||||||
Long-term debt payable to affiliated trust | 36,082 | 36,082 | — | — | — | |||||||||||||||
Long-term debt | 242,548 | 242,498 | 202,488 | 243,715 | 233,753 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 872,570 | $ | 857,197 | $ | 801,786 | $ | 828,477 | $ | 792,242 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 64.3 | 63.7 | 66.4 | 62.5 | 62.1 | |||||||||||||||
Preferred stock | 3.8 | 3.8 | 4.0 | 3.8 | 4.0 | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | 4.4 | 4.2 | 4.4 | |||||||||||||||
Long-term debt payable to affiliated trust | 4.1 | 4.2 | — | — | — | |||||||||||||||
Long-term debt | 27.8 | 28.3 | 25.2 | 29.5 | 29.5 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
First Mortgage Bonds — | ||||||||||||||||||||
Moody’s | — | Aa3 | Aa3 | Aa3 | Aa3 | |||||||||||||||
Standard and Poor’s | — | A+ | A+ | A+ | A+ | |||||||||||||||
Fitch | — | AA | AA- | AA- | AA- | |||||||||||||||
Preferred Stock — | ||||||||||||||||||||
Moody’s | A3 | A3 | A3 | A3 | A3 | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
Fitch | A+ | A+ | A | A | A | |||||||||||||||
Unsecured Long-Term Debt — | ||||||||||||||||||||
Moody’s | A1 | A1 | A1 | A1 | A1 | |||||||||||||||
Standard and Poor’s | A | A | A | A | A | |||||||||||||||
Fitch | AA- | AA- | A+ | A+ | A+ | |||||||||||||||
Customers (year-end) : | ||||||||||||||||||||
Residential | 142,077 | 160,189 | 159,582 | 158,873 | 158,852 | |||||||||||||||
Commercial | 30,895 | 33,646 | 33,135 | 32,713 | 32,538 | |||||||||||||||
Industrial | 512 | 522 | 520 | 489 | 498 | |||||||||||||||
Other | 176 | 183 | 171 | 171 | 173 | |||||||||||||||
Total | 173,660 | 194,540 | 193,408 | 192,246 | 192,061 | |||||||||||||||
Employees(year-end) | 1,254 | 1,283 | 1,290 | 1,301 | 1,316 | |||||||||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) : | ||||||||||||||||||||
Residential | $ | 209,546 | $ | 199,242 | $ | 180,978 | $ | 186,522 | $ | 164,716 | ||||||||||
Commercial | 213,093 | 199,127 | 175,416 | 181,224 | 163,253 | |||||||||||||||
Industrial | 190,720 | 180,516 | 154,825 | 164,042 | 156,525 | |||||||||||||||
Other | 5,501 | 5,428 | 5,082 | 5,039 | 4,659 | |||||||||||||||
Total retail | 618,860 | 584,313 | 516,301 | 536,827 | 489,153 | |||||||||||||||
Sales for resale — non-affiliates | 283,413 | 265,863 | 249,986 | 224,275 | 204,623 | |||||||||||||||
Sales for resale — affiliates | 50,460 | 44,371 | 26,723 | 46,314 | 85,652 | |||||||||||||||
Total revenues from sales of electricity | 952,733 | 894,547 | 793,010 | 807,416 | 779,428 | |||||||||||||||
Other revenues | 17,000 | 15,779 | 76,914 | 16,749 | 16,637 | |||||||||||||||
Total | $ | 969,733 | $ | 910,326 | $ | 869,924 | $ | 824,165 | $ | 796,065 | ||||||||||
Kilowatt-Hour Sales (in thousands) : | ||||||||||||||||||||
Residential | 2,179,756 | 2,297,110 | 2,255,445 | 2,300,017 | 2,162,623 | |||||||||||||||
Commercial | 2,725,274 | 2,969,829 | 2,914,133 | 2,902,291 | 2,840,840 | |||||||||||||||
Industrial | 3,798,477 | 4,235,290 | 4,111,199 | 4,161,902 | 4,275,781 | |||||||||||||||
Other | 37,905 | 40,229 | 39,890 | 39,635 | 41,009 | |||||||||||||||
Total retail | 8,741,412 | 9,542,458 | 9,320,667 | 9,403,845 | 9,320,253 | |||||||||||||||
Sales for resale — non-affiliates | 4,811,250 | 6,027,666 | 5,874,724 | 5,380,145 | 5,011,212 | |||||||||||||||
Sales for resale — affiliates | 896,361 | 1,053,471 | 709,065 | 1,586,968 | 2,952,455 | |||||||||||||||
Total | 14,449,023 | 16,623,595 | 15,904,456 | 16,370,958 | 17,283,920 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents) : | ||||||||||||||||||||
Residential | 9.61 | 8.67 | 8.02 | 8.11 | 7.62 | |||||||||||||||
Commercial | 7.82 | 6.70 | 6.02 | 6.24 | 5.75 | |||||||||||||||
Industrial | 5.02 | 4.26 | 3.77 | 3.94 | 3.66 | |||||||||||||||
Total retail | 7.08 | 6.12 | 5.54 | 5.71 | 5.25 | |||||||||||||||
Sales for resale | 5.85 | 4.38 | 4.20 | 3.88 | 3.64 | |||||||||||||||
Total sales | 6.59 | 5.38 | 4.99 | 4.93 | 4.51 | |||||||||||||||
Residential Average Annual Kilowatt-Hour Use Per Customer | 14,111 | 14,357 | 14,161 | 14,453 | 13,634 | |||||||||||||||
Residential Average Annual Revenue Per Customer | $ | 1,367 | $ | 1,245 | $ | 1,136 | $ | 1,172 | $ | 1,038 | ||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 3,156 | 3,156 | 3,156 | 3,156 | 3,156 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts) : | ||||||||||||||||||||
Winter | 2,178 | 2,173 | 2,458 | 2,311 | 2,249 | |||||||||||||||
Summer | 2,493 | 2,427 | 2,330 | 2,492 | 2,466 | |||||||||||||||
Annual Load Factor (percent) | 56.6 | 62.4 | 60.5 | 61.8 | 60.7 | |||||||||||||||
Plant Availability Fossil-Steam (percent) : | 82.8 | 91.4 | 92.6 | 91.7 | 92.8 | |||||||||||||||
Source of Energy Supply (percent) : | ||||||||||||||||||||
Coal | 58.1 | 55.7 | 57.7 | 50.8 | 52.0 | |||||||||||||||
Oil and gas | 24.4 | 25.5 | 19.9 | 37.7 | 35.9 | |||||||||||||||
Purchased power — | ||||||||||||||||||||
From non-affiliates | 5.1 | 6.4 | 3.5 | 3.1 | 3.1 | |||||||||||||||
From affiliates | 12.4 | 12.4 | 18.9 | 8.4 | 9.0 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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Key | 2005 | 2005 | ||
Performance Indicator | Target Performance | Actual Performance | ||
Customer Satisfaction | Top quartile in customer surveys | Second quartile | ||
Peak Season EFOR | 3.0% or less | 1.0% | ||
Net Income | $25.2 million | $29.9 million |
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Increase (Decrease) | ||||||||||||||||
Amount | from Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in thousands) | ||||||||||||||||
Operating revenues | $ | 444,994 | $ | 88,034 | $ | 41,843 | $ | 18,111 | ||||||||
Fuel | 106,549 | 50,553 | 119 | 922 | ||||||||||||
Purchased power | 146,247 | 20,573 | 36,169 | 13,901 | ||||||||||||
Other operation and maintenance | 93,014 | 7,049 | 2,344 | 2,603 | ||||||||||||
Depreciation and amortization | 22,404 | 1,152 | 753 | (2,205 | ) | |||||||||||
Taxes other than income taxes | 16,202 | 957 | 580 | 208 | ||||||||||||
Total operating expenses | 384,416 | 80,284 | 39,965 | 15,429 | ||||||||||||
Operating income | 60,578 | 7,750 | 1,878 | 2,682 | ||||||||||||
Total other income and (expense) | (10,956 | ) | 1,762 | (745 | ) | 3,528 | ||||||||||
Income taxes | 16,989 | 2,611 | (1,140 | ) | 4,070 | |||||||||||
Net income | 32,633 | 6,901 | 2,273 | 2,140 | ||||||||||||
Dividends on preferred stock | 2,700 | 1,200 | 1,500 | — | ||||||||||||
Net income after dividends on preferred stock | $ | 29,933 | $ | 5,701 | $ | 773 | $ | 2,140 | ||||||||
Amount | ||||||||||||||||
2005 | 2004 | 2003 | ||||||||||||||
(in thousands) | ||||||||||||||||
Retail — prior year | $ | 341,766 | $ | 298,807 | $ | 283,225 | ||||||||||
Change in — | ||||||||||||||||
Base rates | 6,097 | — | 2,799 | |||||||||||||
Sales growth | 1,696 | 9,497 | 2,084 | |||||||||||||
Weather | 1,127 | 10 | (263 | ) | ||||||||||||
Fuel cost recovery and other | 70,865 | 33,452 | 10,962 | |||||||||||||
Retail — current year | 421,551 | 341,766 | 298,807 | |||||||||||||
Sales for resale — | ||||||||||||||||
Non-affiliates | 5,126 | 5,035 | 5,653 | |||||||||||||
Affiliates | 10,536 | 6,130 | 6,499 | |||||||||||||
Total sales for resale | 15,662 | 11,165 | 12,152 | |||||||||||||
Other operating revenues | 7,781 | 4,029 | 4,158 | |||||||||||||
Total operating revenues | $ | 444,994 | $ | 356,960 | $ | 315,117 | ||||||||||
Percent change | 24.7 | % | 13.3 | % | 6.1 | % | ||||||||||
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KWH | Percent Change | |||||||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Residential | 1,923 | 1.3 | % | 8.3 | % | (0.1 | )% | |||||||||||||||||||||
Commercial | 1,566 | 1.7 | 5.4 | 0.4 | ||||||||||||||||||||||||
Industrial | 805 | (4.2 | ) | (2.4 | ) | 8.8 | ||||||||||||||||||||||
Other | 136 | (4.7 | ) | 4.1 | (0.5 | ) | ||||||||||||||||||||||
Total retail | 4,430 | 0.2 | 5.0 | 1.8 | ||||||||||||||||||||||||
Sales for resale — | ||||||||||||||||||||||||||||
Non-affiliates | 84 | (36.1 | ) | (19.2 | ) | 7.7 | ||||||||||||||||||||||
Affiliates | 178 | 24.8 | (22.9 | ) | 47.1 | |||||||||||||||||||||||
Total | 4,692 | (0.1 | )% | 3.0 | % | 3.3 | % | |||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||
Total generation (millions of KWHs) | 2,569 | 2,135 | 2,325 | |||||||||
Sources of generation (percent) — | ||||||||||||
Coal | 79 | 96 | 94 | |||||||||
Oil | 1 | 1 | 2 | |||||||||
Gas | 20 | 3 | 4 | |||||||||
Average cost of fuel per net KWH generated (cents) | 4.15 | 2.62 | 2.40 | |||||||||
Total purchased power (millions of KWHs) | 2,472 | 2,829 | 2,581 | |||||||||
Average cost of purchased power per net KWH (cents) | 5.92 | 4.44 | 3.47 | |||||||||
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• | the transfer of the Company’s generating facilities and certification of the generating facilities as Georgia Power assets; |
• | amendments to Georgia Power’s Integrated Resource Plan to add the current customers and generating facilities of the Company; |
• | the transfer of the Company’s assigned service territory to Georgia Power; |
• | adoption of Georgia Power’s service rules and regulations to the current Savannah Electric customers; |
• | new fuel rate and base rate schedules that would apply to Georgia Power’s sale of electricity to the current company customers; and |
• | the issuance of additional shares of Georgia Power common stock to Southern Company in exchange for Southern Company’s shares of the Company’s common stock. |
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• | Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes, and other environmental matters. |
• | Changes in existing income tax regulations or changes in Internal Revenue Service interpretations of existing regulations. |
• | Identification of additional sites that require environmental remediation or the filing of other complaints in which the Company may be asserted to be a potentially responsible party. |
• | Identification and evaluation of other potential lawsuits or complaints in which the Company may be named as a defendant. |
• | Resolution or progression of existing matters through the legislative process, the court systems, or the EPA. |
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Changes in Fair Value | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Contracts beginning of year | $ | 1,474 | $ | 463 | ||||
Contracts realized or settled | (6,895 | ) | (1,811 | ) | ||||
New contracts at inception | — | — | ||||||
Changes in valuation techniques | — | — | ||||||
Current period changes (a) | 14,169 | 2,822 | ||||||
Contracts end of year | $ | 8,748 | $ | 1,474 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | Year 1 | 2-3 Years | ||||||||||
(in thousands) | ||||||||||||
Actively quoted | $ | 8,762 | $ | 6,394 | $ | 2,368 | ||||||
External sources | (14 | ) | (14 | ) | — | |||||||
Models and other methods | — | — | — | |||||||||
Contracts end of year | $ | 8,748 | $ | 6,380 | $ | 2,368 | ||||||
Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 8,752 | ||
Other comprehensive income | — | |||
Net income | (4 | ) | ||
Total fair value | $ | 8,748 | ||
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2007- | 2009- | After | ||||||||||||||||||
2006 | 2008 | 2010 | 2010 | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Long-term debt(a) — | ||||||||||||||||||||
Principal | $ | 21,003 | $ | 47,020 | $ | 1,366 | $ | 168,647 | $ | 238,036 | ||||||||||
Interest | 13,294 | 23,677 | 17,585 | 139,187 | 193,743 | |||||||||||||||
Commodity derivative obligations(b) | 901 | 2 | — | — | 903 | |||||||||||||||
Preferred stock dividends(c) | 2,700 | 5,400 | 5,400 | — | 13,500 | |||||||||||||||
Operating leases | 909 | 1,573 | 1,077 | 3,179 | 6,738 | |||||||||||||||
Purchase commitments(d) — | ||||||||||||||||||||
Capital(e) | 44,696 | 89,261 | — | — | 133,957 | |||||||||||||||
Coal | 60,615 | 11,073 | — | — | 71,688 | |||||||||||||||
Natural gas(f) | 60,829 | 51,288 | 87,886 | 362,804 | 562,807 | |||||||||||||||
Purchased power | 13,240 | 26,531 | 13,286 | — | 53,057 | |||||||||||||||
Long-term service agreements | 1,212 | 3,146 | 4,280 | 27,223 | 35,861 | |||||||||||||||
Postretirement benefit trusts(g) | 1,300 | 2,600 | — | — | 3,900 | |||||||||||||||
Total | $ | 220,699 | $ | 261,571 | $ | 130,880 | $ | 701,040 | $ | 1,314,190 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to continue to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. Variable rate interest obligations are estimated based on rates as of January 1, 2006, as reflected in the statements of capitalization. Fixed rates include, where applicable, the effects of interest rate derivatives employed to manage interest rate risk. | |
(b) | For additional information, see Notes 1 and 6 to the financial statements herein. | |
(c) | Preferred stock does not mature; therefore, amounts are provided for the next five years only. In connection with the Merger, the Company’s preferred stock is expected to be exchanged for Georgia Power preferred stock. | |
(d) | The Company generally does not enter into non-cancelable commitments for other operation and maintenance expenditures. Total other operation and maintenance expenses for 2005, 2004, and 2003 were $93.0 million, $86.0 million, and $83.6 million, respectively. | |
(e) | The Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures. At December 31, 2005, significant purchase commitments were outstanding in connection with the construction program. | |
(f) | Natural gas purchase commitments contain fixed volumes with prices based on various indices at the time of delivery. Amounts reflected have been estimated based on the New York Mercantile Exchange future prices at December 31, 2005. | |
(g) | The Company forecasts postretirement trust contributions over a three-year period. No contributions related to the Company’s pension trust are currently expected during this period. See Note 2 to the financial statements for additional information related to the pension and postretirement plans, including estimated benefit payments. Certain benefit payments will be made through the related trusts. Other benefit payments will be made from the Company’s corporate assets. |
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• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax, and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; | |
• | current and future litigation, regulatory investigations, proceedings or inquiries, including the pending EPA civil action against the Company and FERC matters; | |
• | the effects, extent, and timing of the entry of additional competition in the markets in which the Company operates; | |
• | variations in demand for electricity and gas, including those relating to weather, the general economy and population and business growth (and declines); | |
• | available sources and costs of fuels; | |
• | ability to control costs; | |
• | investment performance of the Company’s employee benefit plans; | |
• | advances in technology; | |
• | state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; | |
• | internal restructuring or other restructuring options that may be pursued; | |
• | potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to the Company; | |
• | the ability of counterparties of the Company to make payments as and when due; | |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; | |
• | the direct or indirect effects on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; | |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; | |
• | the ability of the Company to obtain additional generating capacity at competitive prices; | |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, or other similar occurrences; | |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; | |
• | the effect of accounting pronouncements issued periodically by standard-setting bodies; and | |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Company from time to time with the Securities and Exchange Commission. |
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Retail sales | $ | 421,551 | $ | 341,766 | $ | 298,807 | ||||||
Sales for resale — | ||||||||||||
Non-affiliates | 5,126 | 5,035 | 5,653 | |||||||||
Affiliates | 10,536 | 6,130 | 6,499 | |||||||||
Other revenues | 7,781 | 4,029 | 4,158 | |||||||||
Total operating revenues | 444,994 | 356,960 | 315,117 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 106,549 | 55,996 | 55,877 | |||||||||
Purchased power — | ||||||||||||
Non-affiliates | 12,470 | 11,413 | 5,713 | |||||||||
Affiliates | 133,777 | 114,261 | 83,792 | |||||||||
Other operations | 62,718 | 61,134 | 56,823 | |||||||||
Maintenance | 30,296 | 24,831 | 26,798 | |||||||||
Depreciation and amortization | 22,404 | 21,252 | 20,499 | |||||||||
Taxes other than income taxes | 16,202 | 15,245 | 14,665 | |||||||||
Total operating expenses | 384,416 | 304,132 | 264,167 | |||||||||
Operating Income | 60,578 | 52,828 | 50,950 | |||||||||
Other Income and (Expense): | ||||||||||||
Interest income | 255 | 208 | 290 | |||||||||
Interest expense, net of amounts capitalized | (14,778 | ) | (12,047 | ) | (9,590 | ) | ||||||
Distributions on mandatorily redeemable preferred securities | — | (109 | ) | (2,740 | ) | |||||||
Other income (expense), net | 3,567 | (770 | ) | 67 | ||||||||
Total other income and (expense) | (10,956 | ) | (12,718 | ) | (11,973 | ) | ||||||
Earnings Before Income Taxes | 49,622 | 40,110 | 38,977 | |||||||||
Income taxes | 16,989 | 14,378 | 15,518 | |||||||||
Net Income | 32,633 | 25,732 | 23,459 | |||||||||
Dividends on Preferred Stock | 2,700 | 1,500 | — | |||||||||
Net Income After Dividends on Preferred Stock | $ | 29,933 | $ | 24,232 | $ | 23,459 | ||||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 32,633 | $ | 25,732 | $ | 23,459 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 24,698 | 23,710 | 22,587 | |||||||||
Deferred income taxes and investment tax credits, net | 25,792 | 13,441 | 654 | |||||||||
Allowance for equity funds used during construction | (2,337 | ) | (2,379 | ) | (193 | ) | ||||||
Pension, postretirement, and other employee benefits | 6,133 | 4,866 | 5,312 | |||||||||
Tax benefit of stock options | 1,552 | 861 | 884 | |||||||||
Other, net | 2,871 | (7,758 | ) | 4,261 | ||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (62,593 | ) | (26,432 | ) | 212 | |||||||
Fossil fuel stock | (5,426 | ) | (1,938 | ) | (323 | ) | ||||||
Materials and supplies | (1,863 | ) | (842 | ) | 516 | |||||||
Other current assets | 175 | (5,324 | ) | 4,615 | ||||||||
Accounts payable | 15,497 | 5,035 | 3,713 | |||||||||
Accrued taxes | (3,628 | ) | 3,352 | (1,131 | ) | |||||||
Accrued compensation | 340 | (40 | ) | (819 | ) | |||||||
Other current liabilities | (174 | ) | (911 | ) | (4,492 | ) | ||||||
Net cash provided from operating activities | 33,670 | 31,373 | 59,255 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (48,443 | ) | (47,677 | ) | (39,015 | ) | ||||||
Purchase of property from affiliates | — | (74,832 | ) | — | ||||||||
Other | (1,656 | ) | 539 | 974 | ||||||||
Net cash used for investing activities | (50,099 | ) | (121,970 | ) | (38,041 | ) | ||||||
Financing Activities: | ||||||||||||
Increase (decrease) in notes payable, net | 38,203 | 20,567 | (2,897 | ) | ||||||||
Proceeds — | ||||||||||||
Pollution control bonds | — | — | 13,870 | |||||||||
Senior notes | — | 35,000 | 60,000 | |||||||||
Other long-term debt | — | 10,000 | — | |||||||||
Preferred stock | — | 45,000 | — | |||||||||
Capital contributions from parent company | 442 | 47,255 | 6,757 | |||||||||
Redemptions — | ||||||||||||
Pollution control bonds | — | — | (13,870 | ) | ||||||||
Senior notes | — | — | (20,000 | ) | ||||||||
Other long-term debt | (1,095 | ) | (31,014 | ) | (5,944 | ) | ||||||
Mandatorily redeemable preferred securities | — | (40,000 | ) | — | ||||||||
Payment of preferred stock dividends | (2,700 | ) | (825 | ) | — | |||||||
Payment of common stock dividends | (26,700 | ) | (23,200 | ) | (23,000 | ) | ||||||
Other | (81 | ) | (1,267 | ) | (2,165 | ) | ||||||
Net cash provided from financing activities | 8,069 | 61,516 | 12,751 | |||||||||
Net Change in Cash and Cash Equivalents | (8,360 | ) | (29,081 | ) | 33,965 | |||||||
Cash and Cash Equivalents at Beginning of Year | 8,862 | 37,943 | 3,978 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 502 | $ | 8,862 | $ | 37,943 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for — | ||||||||||||
Interest (net of $1,079, $1,471, and $220 capitalized, respectively) | $ | 13,358 | $ | 10,080 | $ | 11,334 | ||||||
Income taxes (net of refunds) | (11,042 | ) | 4,581 | 8,439 | ||||||||
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Assets | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 502 | $ | 8,862 | ||||
Receivables — | ||||||||
Customer accounts receivable | 29,116 | 22,875 | ||||||
Unbilled revenues | 6,651 | 6,681 | ||||||
Under recovered regulatory clause revenues | 28,990 | 23,800 | ||||||
Other accounts and notes receivable | 2,055 | 1,608 | ||||||
Affiliated companies | 5,449 | 3,392 | ||||||
Accumulated provision for uncollectible accounts | (916 | ) | (878 | ) | ||||
Fossil fuel stock, at average cost | 16,015 | 10,590 | ||||||
Materials and supplies, at average cost | 11,776 | 9,913 | ||||||
Prepaid income taxes | 22,629 | 21,615 | ||||||
Assets from risk management activities | 8,045 | 1,772 | ||||||
Other | 2,824 | 1,930 | ||||||
Total current assets | 133,136 | 112,160 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 1,033,256 | 945,359 | ||||||
Less accumulated provision for depreciation | 396,987 | 408,415 | ||||||
636,269 | 536,944 | |||||||
Construction work in progress | 21,315 | 91,275 | ||||||
Total property, plant, and equipment | 657,584 | 628,219 | ||||||
Other Property and Investments | 4,279 | 3,925 | ||||||
Deferred Charges and Other Assets: | ||||||||
Deferred charges related to income taxes | 11,455 | 10,588 | ||||||
Cash surrender value of life insurance for deferred compensation plans | 27,030 | 25,335 | ||||||
Deferred under recovered regulatory clause revenues | 48,689 | — | ||||||
Other regulatory assets | 20,191 | 23,527 | ||||||
Other | 10,437 | 8,837 | ||||||
Total deferred charges and other assets | 117,802 | 68,287 | ||||||
Total Assets | $ | 912,801 | $ | 812,591 | ||||
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Savannah Electric and Power Company 2005 Annual Report
Liabilities and Stockholder’s Equity | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Liabilities: | ||||||||
Securities due within one year | $ | 21,003 | $ | 1,010 | ||||
Notes payable | 58,771 | 20,567 | ||||||
Accounts payable — | ||||||||
Affiliated | 29,840 | 17,379 | ||||||
Other | 19,355 | 16,166 | ||||||
Customer deposits | 7,068 | 6,973 | ||||||
Accrued taxes — | ||||||||
Income taxes | — | 148 | ||||||
Other | 1,909 | 5,390 | ||||||
Accrued interest | 3,223 | 3,050 | ||||||
Accrued compensation | 5,952 | 5,612 | ||||||
Other | 15,020 | 9,426 | ||||||
Total current liabilities | 162,141 | 85,721 | ||||||
Long-term Debt(See accompanying statements) | 217,033 | 237,769 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Accumulated deferred income taxes | 119,424 | 90,079 | ||||||
Deferred credits related to income taxes | 7,978 | 8,738 | ||||||
Accumulated deferred investment tax credits | 7,298 | 7,961 | ||||||
Employee benefit obligations | 54,661 | 46,580 | ||||||
Other cost of removal obligations | 40,575 | 41,890 | ||||||
Other regulatory liabilities | 12,107 | 11,066 | ||||||
Other | 10,127 | 6,693 | ||||||
Total deferred credits and other liabilities | 252,170 | 213,007 | ||||||
Total Liabilities | 631,344 | 536,497 | ||||||
Preferred Stock(See accompanying statements) | 43,909 | 43,938 | ||||||
Common Stockholder’s Equity(See accompanying statements) | 237,548 | 232,156 | ||||||
Total Liabilities and Stockholder’s Equity | $ | 912,801 | $ | 812,591 | ||||
Commitments and Contingent Matters(See notes) | ||||||||
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At December 31, 2005 and 2004
Savannah Electric and Power Company 2005 Annual Report
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands) | (percent of total) | |||||||||||||||
Long-Term Debt: | ||||||||||||||||
First mortgage bonds — 6.9% due May 1, 2006 | $ | 20,000 | $ | 20,000 | ||||||||||||
Long-term notes payable — | ||||||||||||||||
6.55% due May 15, 2008 | 45,000 | 45,000 | ||||||||||||||
4.90% to 5.75% due 2013 through 2044 | 150,000 | 150,000 | ||||||||||||||
Total long-term notes payable | 195,000 | 195,000 | ||||||||||||||
Other long-term debt — | ||||||||||||||||
Non-collateralized pollution control revenue bonds — | ||||||||||||||||
Variable rates (2.65% to 3.75% at 1/1/06) | ||||||||||||||||
due 2016-2038 | 17,955 | 17,955 | ||||||||||||||
Capitalized lease obligations | 5,081 | 5,824 | ||||||||||||||
Total long-term debt (annual interest requirement — $13.3 million) | 238,036 | 238,779 | ||||||||||||||
Less amount due within one year | 21,003 | 1,010 | ||||||||||||||
Long-term debt excluding amount due within one year | 217,033 | 237,769 | 43.5 | % | 46.2 | % | ||||||||||
Non-Cumulative Preferred Stock: | ||||||||||||||||
$25 par value — 6.00% | ||||||||||||||||
Authorized — 4,000,000 shares | ||||||||||||||||
Outstanding — 1,800,000 shares | ||||||||||||||||
(annual dividend requirement — $2.7 million) | 43,909 | 43,938 | 8.8 | 8.6 | ||||||||||||
Common Stockholder’s Equity: | ||||||||||||||||
Common stock, par value $5 per share — | ||||||||||||||||
Authorized - 16,000,000 shares | ||||||||||||||||
Outstanding - 10,844,635 shares | 54,223 | 54,223 | ||||||||||||||
Paid-in capital | 74,527 | 72,533 | ||||||||||||||
Retained earnings | 110,939 | 107,685 | ||||||||||||||
Accumulated other comprehensive income (loss) | (2,141 | ) | (2,285 | ) | ||||||||||||
Total common stockholder’s equity | 237,548 | 232,156 | 47.7 | % | 45.2 | % | ||||||||||
Total Capitalization | $ | 498,490 | $ | 513,863 | 100.0 | % | 100.0 | % | ||||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Savannah Electric and Power Company 2005 Annual Report
Other | ||||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Balance at December 31, 2002 | $ | 54,223 | $ | 16,776 | $ | 106,194 | $ | (1,244 | ) | $ | 175,949 | |||||||||||
Net income | — | — | 23,459 | — | 23,459 | |||||||||||||||||
Capital contributions from parent company | — | 7,641 | — | — | 7,641 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | (960 | ) | (960 | ) | |||||||||||||||
Cash dividends on common stock | — | — | (23,000 | ) | — | (23,000 | ) | |||||||||||||||
Balance at December 31, 2003 | 54,223 | 24,417 | 106,653 | (2,204 | ) | 183,089 | ||||||||||||||||
Net income after dividends on preferred stock | — | — | 24,232 | — | 24,232 | |||||||||||||||||
Capital contributions from parent company | — | 48,116 | — | — | 48,116 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | (81 | ) | (81 | ) | |||||||||||||||
Cash dividends on common stock | — | — | (23,200 | ) | — | (23,200 | ) | |||||||||||||||
Balance at December 31, 2004 | 54,223 | 72,533 | 107,685 | (2,285 | ) | 232,156 | ||||||||||||||||
Net income after dividends on preferred stock | — | — | 29,933 | — | 29,933 | |||||||||||||||||
Capital contributions from parent company | — | 1,994 | — | — | 1,994 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | 144 | 144 | |||||||||||||||||
Cash dividends on common stock | — | — | (26,700 | ) | — | (26,700 | ) | |||||||||||||||
Other | — | — | 21 | — | 21 | |||||||||||||||||
Balance at December 31, 2005 | $ | 54,223 | $ | 74,527 | $ | 110,939 | $ | (2,141 | ) | $ | 237,548 | |||||||||||
For the Years Ended December 31, 2005, 2004, and 2003
Savannah Electric and Power Company 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Net income after dividends on preferred stock | $ | 29,933 | $ | 24,232 | $ | 23,459 | ||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Change in additional minimum pension liability, net of tax of $(235), $(253) and $(336), respectively | (371 | ) | (401 | ) | (533 | ) | ||||||||||||||
Changes in fair value of qualifying hedges, net of tax of $308, $161 and $(284), respectively | 494 | 255 | (450 | ) | ||||||||||||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $13, $41 and $15, respectively | 21 | 65 | 23 | |||||||||||||||||
Total other comprehensive income (loss) | 144 | (81 | ) | (960 | ) | |||||||||||||||
Comprehensive Income | $ | 30,077 | $ | 24,151 | $ | 22,499 | ||||||||||||||
The accompanying notes are an integral part of these financial statements. |
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2005 | 2004 | Note | ||||||||||||||
(in thousands) | ||||||||||||||||
Asset retirement obligations | $ | 5,610 | $ | 3,868 | (a | ) | ||||||||||
Deferred income tax charges | 11,455 | 10,588 | (a | ) | ||||||||||||
Loss on reacquired debt | 7,209 | 7,935 | (b | ) | ||||||||||||
Deferred McIntosh maintenance costs | 7,370 | 8,599 | (c | ) | ||||||||||||
Coal transloader | — | 3,077 | (d | ) | ||||||||||||
Fuel-hedging assets | 889 | 563 | (f | ) | ||||||||||||
Other cost of removal obligations | (40,575 | ) | (41,890 | ) | (a | ) | ||||||||||
Fuel-hedging liabilities | (9,642 | ) | (2,034 | ) | (f | ) | ||||||||||
Deferred income tax credits | (7,978 | ) | (8,738 | ) | (a | ) | ||||||||||
Storm damage reserves | (8,737 | ) | (8,341 | ) | (e | ) | ||||||||||
Accelerated cost recovery | — | (1,256 | ) | (g | ) | |||||||||||
Property damage reserves | (1,000 | ) | (1,000 | ) | (e | ) | ||||||||||
Injury and damage reserves | 66 | (123 | ) | (e | ) | |||||||||||
Total | $ | (35,333 | ) | $ | (28,752 | ) | ||||||||||
(a) | Asset retirement and removal liabilities are recorded, deferred income tax assets are recovered, and deferred tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. | |
(b) | 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 40 years. | |
(c) | Amortized over 10 years ending in 2011. | |
(d) | Transferred to plant in service in the December 2005 fuel cost recovery case. Previously being amortized over 21 months ending in July 2006. | |
(e) | Recorded and relieved upon the occurrence of a loss. | |
(f) | Fuel-hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed three years. Upon final settlement, costs are recovered through the fuel cost recovery clauses. | |
(g) | Amortized over three-year period ended in May 2005. |
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2005 | 2004 | |||||||
(in thousands) | ||||||||
Generation | $ | 416,318 | $ | 354,105 | ||||
Transmission | 150,126 | 148,199 | ||||||
Distribution | 411,966 | 389,074 | ||||||
General | 54,846 | 53,981 | ||||||
Plant in service | $ | 1,033,256 | $ | 945,359 | ||||
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2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance beginning of year | $ | 3,870 | $ | 4,220 | ||||
Liabilities incurred | 3,924 | — | ||||||
Liabilities settled | (602 | ) | (598 | ) | ||||
Accretion | 275 | 248 | ||||||
Balance end of year | $ | 7,467 | $ | 3,870 | ||||
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As | Option | Pro | ||||||||||
Reported | Impact | Forma | ||||||||||
(in thousands) | ||||||||||||
2005 | $ | 29,933 | $ | (304 | ) | $ | 29,629 | |||||
2004 | 24,232 | (251 | ) | 23,981 | ||||||||
2003 | 23,459 | (270 | ) | 23,189 | ||||||||
2005 | 2004 | 2003 | ||||||||||
Interest rate | 3.9 | % | 3.1 | % | 2.7 | % | ||||||
Average expected life of stock options (in years) | 5.0 | 5.0 | 4.3 | |||||||||
Expected volatility of common stock | 17.9 | % | 19.6 | % | 23.6 | % | ||||||
Expected annual dividends on common stock | $ | 1.43 | $ | 1.40 | $ | 1.37 | ||||||
Weighted average fair value of stock options granted | $ | 3.90 | $ | 3.29 | $ | 3.59 | ||||||
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Carrying | Fair | |||||||
Amount | Value | |||||||
(in millions) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 233 | $ | 232 | ||||
2004 | $ | 233 | $ | 235 |
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Projected | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 103,564 | $ | 94,789 | ||||
Service cost | 2,691 | 2,478 | ||||||
Interest cost | 5,814 | 5,551 | ||||||
Benefits paid | (4,893 | ) | (4,575 | ) | ||||
Actuarial loss and employee transfers | 8,835 | 5,162 | ||||||
Amendments | 475 | 159 | ||||||
Contractual termination benefits | 898 | — | ||||||
Balance at end of year | $ | 117,384 | $ | 103,564 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 48,556 | $ | 47,490 | ||||
Actual return on plan assets | 7,040 | 3,939 | ||||||
Benefits paid | (4,186 | ) | (4,060 | ) | ||||
Employee transfers | 2,239 | 1,187 | ||||||
Balance at end of year | $ | 53,649 | $ | 48,556 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 36 | % | 40 | % | 36 | % | ||||||
International equity | 24 | 24 | 20 | |||||||||
Fixed income | 15 | 17 | 26 | |||||||||
Real estate | 15 | 13 | 10 | |||||||||
Private equity | 10 | 6 | 8 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | (63,735 | ) | $ | (55,008 | ) | ||
Unrecognized prior service cost | 6,374 | 6,664 | ||||||
Unrecognized net loss | 29,194 | 26,929 | ||||||
Accrued liability recognized in the balance sheets | $ | (28,167 | ) | $ | (21,415 | ) | ||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Employee benefit obligations | $ | (33,768 | ) | $ | (26,601 | ) | ||
Other property and investments other | 1,442 | 1,634 | ||||||
Accumulated other comprehensive income | 4,159 | 3,552 | ||||||
Accrued liability recognized in the balance sheets | $ | (28,167 | ) | $ | (21,415 | ) | ||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Service cost | $ | 2,691 | $ | 2,479 | $ | 2,175 | ||||||
Interest cost | 5,814 | 5,551 | 5,409 | |||||||||
Expected return on plan assets | (3,931 | ) | (4,047 | ) | (4,186 | ) | ||||||
Recognized net loss | 893 | 532 | 152 | |||||||||
Net amortization | 764 | 753 | 740 | |||||||||
Contractual termination benefits | 898 | — | — | |||||||||
Net pension cost | $ | 7,129 | $ | 5,268 | $ | 4,290 | ||||||
(in thousands) | |||||
2006 | $ | 5,293 | |||
2007 | 5,441 | ||||
2008 | 5,565 | ||||
2009 | 5,851 | ||||
2010 | 6,083 | ||||
2011 to 2015 | $ | 35,296 | |||
Accumulated | ||||||||
Benefit Obligations | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 38,965 | $ | 37,249 | ||||
Service cost | 592 | 546 | ||||||
Interest cost | 2,191 | 2,094 | ||||||
Benefits paid | (1,909 | ) | (1,459 | ) | ||||
Actuarial loss (gain) and amendments | 2,480 | 535 | ||||||
Balance at end of year | $ | 42,319 | $ | 38,965 | ||||
Plan Assets | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Balance at beginning of year | $ | 13,354 | $ | 11,275 | ||||
Actual return on plan assets | 1,598 | 1,329 | ||||||
Employer contributions | 2,809 | 2,209 | ||||||
Benefits paid | (1,909 | ) | (1,459 | ) | ||||
Balance at end of year | $ | 15,852 | $ | 13,354 | ||||
Plan Assets | ||||||||||||
Target | 2005 | 2004 | ||||||||||
Domestic equity | 52 | % | 52 | % | 51 | % | ||||||
International equity | 11 | 12 | 14 | |||||||||
Fixed income | 30 | 31 | 30 | |||||||||
Real estate | 4 | 3 | 3 | |||||||||
Private equity | 3 | 2 | 2 | |||||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Funded status | $ | (26,467 | ) | $ | (25,611 | ) | ||
Unrecognized transition obligation | 3,456 | 3,950 | ||||||
Unamortized prior service cost | 1,537 | 1,651 | ||||||
Unrecognized net loss | 12,275 | 10,986 | ||||||
Fourth quarter contributions | 1,485 | 1,261 | ||||||
Accrued liability recognized in the Balance Sheets | $ | (7,714 | ) | $ | (7,763 | ) | ||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Service cost | $ | 592 | $ | 546 | $ | 493 | ||||||
Interest cost | 2,191 | 2,094 | 2,082 | |||||||||
Expected return on plan assets | (881 | ) | (845 | ) | (732 | ) | ||||||
Recognized net loss | 474 | 205 | 91 | |||||||||
Net amortization | 608 | 756 | 756 | |||||||||
Net postretirement cost | $ | 2,984 | $ | 2,756 | $ | 2,690 | ||||||
Benefit | Subsidy | |||||||||||
Payments | Receipts | Total | ||||||||||
(in thousands) | ||||||||||||
2006 | $ | 1,996 | $ | (179 | ) | $ | 1,817 | |||||
2007 | 2,183 | (205 | ) | 1,978 | ||||||||
2008 | 2,379 | (229 | ) | 2,150 | ||||||||
2009 | 2,582 | (252 | ) | 2,330 | ||||||||
2010 | 2,778 | (273 | ) | 2,505 | ||||||||
2011 to 2015 | $ | 15,440 | $ | (1,868 | ) | $ | 13,572 | |||||
2005 | 2004 | 2003 | ||||||||||
Discount | 5.50 | % | 5.75 | % | 6.00 | % | ||||||
Annual salary increase | 3.00 | 3.50 | 3.75 | |||||||||
Long-term return on plan assets | 8.50 | 8.50 | 8.50 | |||||||||
1 Percent | 1 Percent | |||||||
Increase | Decrease | |||||||
(in thousands) | ||||||||
Benefit obligation | $ | 3,273 | $ | 2,382 | ||||
Service and interest costs | 204 | 180 | ||||||
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• | the transfer of the Company’s generating facilities and certification of the generating facilities as Georgia Power assets; | |
• | amendments to Georgia Power’s Integrated Resource Plan to add the current customers and generating facilities of the Company; | |
• | the transfer of the Company’s assigned service territory to Georgia Power; | |
• | adoption of Georgia Power’s service rules and regulations to the current Savannah Electric customers; | |
• | new fuel rate and base rate schedules that would apply to Georgia Power’s sale of electricity to the current company customers; and | |
• | the issuance of additional shares of Georgia Power common stock to Southern Company in exchange for Southern Company’s shares of the Company’s common stock. |
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Federal — | ||||||||||||
Currently payable | $ | (7,120 | ) | $ | 246 | $ | 12,074 | |||||
Deferred | 22,430 | 12,171 | 1,299 | |||||||||
15,310 | 12,417 | 13,373 | ||||||||||
State — | ||||||||||||
Currently payable | (1,683 | ) | 691 | 2,791 | ||||||||
Deferred | 3,362 | 1,270 | (646 | ) | ||||||||
1,679 | 1,961 | 2,145 | ||||||||||
Total | $ | 16,989 | $ | 14,378 | $ | 15,518 | ||||||
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2005 | 2004 | |||||||
(in thousands) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | 103,991 | $ | 94,124 | ||||
Property basis differences | (95 | ) | (845 | ) | ||||
Other | 33,301 | 13,539 | ||||||
Total | 137,197 | 106,818 | ||||||
Deferred tax assets: | ||||||||
Pension and other benefits | 22,005 | 17,353 | ||||||
Other comprehensive income | 1,820 | 1,605 | ||||||
Other | 11,979 | 14,098 | ||||||
Total | 35,804 | 33,056 | ||||||
Total deferred tax liabilities, net | 101,393 | 73,762 | ||||||
Portion included in current assets, net | 18,031 | 16,317 | ||||||
Accumulated deferred income taxes in the Balance Sheets | $ | 119,424 | $ | 90,079 | ||||
2005 | 2004 | 2003 | ||||||||||
Federal statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
State income tax, net of Federal income tax benefit | 2 | 3 | 4 | |||||||||
Other | (3 | ) | (2 | ) | 1 | |||||||
Effective income tax rate | 34 | % | 36 | % | 40 | % | ||||||
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Amounts | ||||
(in thousands) | ||||
Regulatory liabilities, net | $ | 8,752 | ||
Other comprehensive income | — | |||
Net income | (4 | ) | ||
Total fair value | $ | 8,748 | ||
Weighted Average | Fair | |||||||||||
Fixed | Value | |||||||||||
Rate | Notional | Gain/ | ||||||||||
Maturity | Paid | Amount | (Loss) | |||||||||
(in millions) | ||||||||||||
2007 | 2.50%* | $ | 14.0 | $ | 0.3 | |||||||
2016 | 4.69% | $ | 30.0 | $ | 0.6 | |||||||
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Natural | ||||||||
Year | Gas | Coal | ||||||
(in thousands) | ||||||||
2006 | $ | 60,829 | $ | 60,615 | ||||
2007 | 32,101 | 11,073 | ||||||
2008 | 19,187 | — | ||||||
2009 | 43,943 | — | ||||||
2010 | 43,943 | — | ||||||
2011 and thereafter | 362,804 | — | ||||||
Total commitments | $ | 562,807 | $ | 71,688 | ||||
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Year | Commitments | |||
(in thousands) | ||||
2006 | $ | 13,240 | ||
2007 | 13,257 | |||
2008 | 13,274 | |||
2009 | 13,286 | |||
Total commitments | $ | 53,057 | ||
Year | Railcars | Other | Total | |||||||||
(in thousands) | ||||||||||||
2006 | $ | 429 | $ | 480 | $ | 909 | ||||||
2007 | 429 | 388 | 817 | |||||||||
2008 | 429 | 327 | 756 | |||||||||
2009 | 429 | 219 | 648 | |||||||||
2010 | 429 | — | 429 | |||||||||
2011 and thereafter | 3,179 | — | 3,179 | |||||||||
Total minimum payments | $ | 5,324 | $ | 1,414 | $ | 6,738 | ||||||
Activity from 2003 to 2005 for the options granted to the Company’s employees under the stock option plan is summarized below.
Shares | Average | |||||||
Subject | Option Price | |||||||
To Option | Per Share | |||||||
Balance at December 31, 2002 | 550,274 | $ | 20.16 | |||||
Options granted | 125,397 | 27.98 | ||||||
Options canceled | (8,410 | ) | 25.60 | |||||
Options exercised | (137,580 | ) | 17.46 | |||||
Balance at December 31, 2003 | 529,681 | 22.62 | ||||||
Options granted | 118,209 | 29.50 | ||||||
Options canceled | (3,708 | ) | 28.21 | |||||
Options exercised | (90,899 | ) | 18.12 | |||||
Balance at December 31, 2004 | 553,283 | 24.80 | ||||||
Options granted | 123,278 | 32.70 | ||||||
Options canceled | (4,544 | ) | 27.10 | |||||
Options exercised | (154,033 | ) | 21.85 | |||||
Balance at December 31, 2005 | 517,984 | $ | 27.53 | |||||
Options exercisable: | ||||||||
At December 31, 2003 | 251,576 | |||||||
At December 31, 2004 | 318,250 | |||||||
At December 31, 2005 | 282,133 | |||||||
Dollar Price | ||||||||||||
Range of Options | ||||||||||||
13-21 | 21-28 | 28-35 | ||||||||||
Outstanding: | ||||||||||||
Shares (in thousands) | 58 | 227 | 233 | |||||||||
Average remaining life (in years) | 4.2 | 6.4 | 8.6 | |||||||||
Average exercise price | $ | 17.35 | $ | 26.39 | $ | 31.18 | ||||||
Exercisable: | ||||||||||||
Shares (in thousands) | 58 | 189 | 35 | |||||||||
Average exercise price | $ | 17.35 | $ | 26.07 | $ | 29.53 | ||||||
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Net Income | ||||||||||||
Operating | Operating | after Preferred | ||||||||||
Quarter Ended | Revenues | Income | Stock Dividends | |||||||||
(in thousands) | ||||||||||||
March 2005 | $ | 88,588 | $ | 3,944 | $ | 1,020 | ||||||
June 2005 | 96,588 | 15,331 | 7,728 | |||||||||
September 2005 | 150,983 | 35,146 | 19,693 | |||||||||
December 2005 | 108,835 | 6,157 | 1,492 | |||||||||
March 2004 | $ | 72,321 | $ | 8,032 | $ | 2,833 | ||||||
June 2004 | 91,149 | 13,971 | 6,784 | |||||||||
September 2004 | 107,889 | 24,541 | 13,416 | |||||||||
December 2004 | 85,601 | 6,284 | 1,199 | |||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) | $ | 444,994 | $ | 356,960 | $ | 315,117 | $ | 297,006 | $ | 282,926 | ||||||||||
Net Income after Dividends on Preferred Stock (in thousands) | $ | 29,933 | $ | 24,232 | $ | 23,459 | $ | 21,319 | $ | 21,495 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 26,700 | $ | 23,200 | $ | 23,000 | $ | 22,700 | $ | 21,700 | ||||||||||
Return on Average Common Equity (percent) | 12.75 | 11.67 | 13.07 | 12.16 | 12.36 | |||||||||||||||
Total Assets (in thousands) | $ | 912,801 | $ | 812,591 | $ | 706,259 | $ | 644,923 | $ | 617,282 | ||||||||||
Gross Property Additions (in thousands) | $ | 52,314 | $ | 126,133 | $ | 40,242 | $ | 32,481 | $ | 31,296 | ||||||||||
Capitalization (in thousands) : | ||||||||||||||||||||
Common stock equity | $ | 237,548 | $ | 232,156 | $ | 183,089 | $ | 175,949 | $ | 174,624 | ||||||||||
Preferred stock | 43,909 | 43,938 | — | — | — | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | — | 40,000 | 40,000 | |||||||||||||||
Long-term debt | 217,033 | 237,769 | 222,493 | 168,052 | 160,709 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 498,490 | $ | 513,863 | $ | 405,582 | $ | 384,001 | $ | 375,333 | ||||||||||
Capitalization Ratios (percent) : | ||||||||||||||||||||
Common stock equity | 47.7 | 45.2 | 45.1 | 45.8 | 46.5 | |||||||||||||||
Preferred stock | 8.8 | 8.6 | — | — | — | |||||||||||||||
Mandatorily redeemable preferred securities | — | — | — | 10.4 | 10.7 | |||||||||||||||
Long-term debt | 43.5 | 46.2 | 54.9 | 43.8 | 42.8 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
First Mortgage Bonds — | ||||||||||||||||||||
Moody’s | A1 | A1 | A1 | A1 | A1 | |||||||||||||||
Standard and Poor’s | A+ | A+ | A+ | A+ | A+ | |||||||||||||||
Preferred Stock — | ||||||||||||||||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
Unsecured Long-Term Debt — | ||||||||||||||||||||
Moody’s | A2 | A2 | A2 | A2 | A2 | |||||||||||||||
Standard and Poor’s | A | A | A | A | A | |||||||||||||||
Customers (year-end) : | ||||||||||||||||||||
Residential | 128,036 | 124,789 | 122,128 | 120,131 | 117,199 | |||||||||||||||
Commercial | 18,636 | 17,964 | 17,102 | 16,512 | 16,121 | |||||||||||||||
Industrial | 84 | 89 | 90 | 81 | 76 | |||||||||||||||
Other | 607 | 533 | 506 | 494 | 474 | |||||||||||||||
Total | 147,363 | 143,375 | 139,826 | 137,218 | 133,870 | |||||||||||||||
Employees(year-end) | 560 | 563 | 549 | 550 | 550 | |||||||||||||||
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands) : | ||||||||||||||||||||
Residential | $ | 202,933 | $ | 164,889 | $ | 143,461 | $ | 137,767 | $ | 123,394 | ||||||||||
Commercial | 150,825 | 120,907 | 106,433 | 103,293 | 100,484 | |||||||||||||||
Industrial | 54,565 | 44,600 | 38,767 | 32,434 | 34,852 | |||||||||||||||
Other | 13,228 | 11,370 | 10,146 | 9,731 | 9,516 | |||||||||||||||
Total retail | 421,551 | 341,766 | 298,807 | 283,225 | 268,246 | |||||||||||||||
Sales for resale — non-affiliates | 5,126 | 5,035 | 5,653 | 6,354 | 8,884 | |||||||||||||||
Sales for resale — affiliates | 10,536 | 6,130 | 6,499 | 4,075 | 3,205 | |||||||||||||||
Total revenues from sales of electricity | 437,213 | 352,931 | 310,959 | 293,654 | 280,335 | |||||||||||||||
Other revenues | 7,781 | 4,029 | 4,158 | 3,352 | 2,591 | |||||||||||||||
Total | $ | 444,994 | $ | 356,960 | $ | 315,117 | $ | 297,006 | $ | 282,926 | ||||||||||
Kilowatt-Hour Sales (in thousands) : | ||||||||||||||||||||
Residential | 1,923,357 | 1,899,462 | 1,753,885 | 1,755,967 | 1,648,102 | |||||||||||||||
Commercial | 1,565,780 | 1,539,536 | 1,461,191 | 1,454,674 | 1,379,583 | |||||||||||||||
Industrial | 804,894 | 840,572 | 860,840 | 791,422 | 784,688 | |||||||||||||||
Other | 136,013 | 142,732 | 137,158 | 137,913 | 133,210 | |||||||||||||||
Total retail | 4,430,044 | 4,422,302 | 4,213,074 | 4,139,976 | 3,945,583 | |||||||||||||||
Sales for resale — non-affiliates | 83,876 | 131,259 | 162,469 | 150,795 | 111,145 | |||||||||||||||
Sales for resale — affiliates | 178,251 | 142,871 | 185,202 | 125,882 | 87,799 | |||||||||||||||
Total | 4,692,171 | 4,696,432 | 4,560,745 | 4,416,653 | 4,144,527 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents) : | ||||||||||||||||||||
Residential | 10.55 | 8.68 | 8.18 | 7.85 | 7.49 | |||||||||||||||
Commercial | 9.63 | 7.85 | 7.28 | 7.10 | 7.28 | |||||||||||||||
Industrial | 6.78 | 5.31 | 4.50 | 4.10 | 4.44 | |||||||||||||||
Total retail | 9.52 | 7.73 | 7.09 | 6.84 | 6.80 | |||||||||||||||
Sales for resale | 5.97 | 4.07 | 3.50 | 3.77 | 6.08 | |||||||||||||||
Total sales | 9.32 | 7.51 | 6.82 | 6.65 | 6.76 | |||||||||||||||
Residential Average Annual Kilowatt-Hour Use Per Customer | 15,208 | 15,388 | 14,493 | 14,771 | 14,150 | |||||||||||||||
Residential Average Annual Revenue Per Customer | $ | 1,605 | $ | 1,336 | $ | 1,185 | $ | 1,159 | $ | 1,059 | ||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 898 | 765 | 788 | 788 | 788 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts) : | ||||||||||||||||||||
Winter | 859 | 805 | 882 | 738 | 758 | |||||||||||||||
Summer | 983 | 949 | 904 | 921 | 846 | |||||||||||||||
Annual Load Factor (percent) | 54.5 | 56.3 | 56.8 | 54.5 | 55.9 | |||||||||||||||
Plant Availability Fossil-Steam (percent) | 86.8 | 77.1 | 83.3 | 81.4 | 81.2 | |||||||||||||||
Source of Energy Supply (percent) : | ||||||||||||||||||||
Coal | 39.9 | 41.2 | 44.7 | 44.4 | 50.5 | |||||||||||||||
Oil and gas | 11.1 | 1.9 | 2.7 | 4.2 | 4.0 | |||||||||||||||
Purchased power - | ||||||||||||||||||||
From non-affiliates | 3.7 | 5.4 | 3.1 | 3.1 | 5.3 | |||||||||||||||
From affiliates | 45.3 | 51.5 | 49.5 | 48.3 | 40.2 | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
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Increase (Decrease) | ||||||||||||||||
Amount | From Prior Year | |||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
(in thousands) | ||||||||||||||||
Operating revenues | $ | 781,004 | $ | 79,693 | $ 19,531 | $ | 383,012 | |||||||||
Fuel | 209,008 | 81,905 | 11,847 | 17,291 | ||||||||||||
Purchased power | 160,056 | (28,400 | ) | 3,155 | 131,638 | |||||||||||
Other operation and maintenance | 80,805 | 5,610 | 12,954 | 33,890 | ||||||||||||
Depreciation and amortization | 54,254 | 3,093 | 12,149 | 20,693 | ||||||||||||
Taxes other than income taxes | 13,314 | 2,041 | 4,608 | 2,390 | ||||||||||||
Total operating expenses | 517,437 | 64,249 | 44,713 | 205,902 | ||||||||||||
Operating income | 263,567 | 15,444 | (25,182 | ) | 177,110 | |||||||||||
Other income, net | 2,379 | (29 | ) | 4,002 | 2,988 | |||||||||||
Less — | ||||||||||||||||
Interest expense and other, net | 79,322 | 13,234 | 34,380 | 22,822 | ||||||||||||
Income taxes | 71,833 | (1,102 | ) | (12,286 | ) | 56,764 | ||||||||||
Cumulative effect of accounting | — | — | (367 | ) | 367 | |||||||||||
Net Income | $ | 114,791 | $ | 3,283 | $(43,641 | ) | $ | 100,879 | ||||||||
2005 | 2004 | 2003 | ||||||||||
(thousands) | ||||||||||||
Capacity revenues | ||||||||||||
Affiliates | $ | 278,221 | $ | 247,914 | $ | 163,341 | ||||||
Non-Affiliates | 68,645 | 73,980 | 54,064 | |||||||||
Total | 346,866 | 321,894 | 217,405 | |||||||||
Energy revenues | ||||||||||||
Affiliates | 254,844 | 124,837 | 103,340 | |||||||||
Non-Affiliates | 141,496 | 80,825 | 55,906 | |||||||||
Total | 396,340 | 205,662 | 159,246 | |||||||||
Total PPA revenues | $ | 743,206 | $ | 527,556 | $ | 376,651 | ||||||
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Capacity | Initial | |||||||
Project | (megawatts) | Term (1) | ||||||
Affiliated | ||||||||
Franklin Unit 1 | 563 | 6/02-5/10 | ||||||
Franklin Unit 2 | 623 | 6/03-5/11 | ||||||
Wansley Units 6 & 7 | 1,129 | 6/02-12/09 | ||||||
Harris Unit 1 | 625 | 6/03-5/10 | ||||||
Harris Unit 2 | 628 | 6/04-5/19 | ||||||
Non-Affiliated | ||||||||
Stanton A (OUC) | 338 | 11/03-10/23 | ||||||
Stanton A (KUA, FMPA) | 85 | 11/03-10/13 | ||||||
GA EMC Full Requirements (2) | 62-434 | 2002-2009 | ||||||
Oleander (FPL) | 160 | 6/05-5/12 | ||||||
Oleander (Seminole) | 533 | 6/05-12/09 | ||||||
Oleander (Seminole) | 320 | 1/10-12/15 | ||||||
Oleander (FMPA) | 160 | 12/07-12/22 | ||||||
Piedmont (PMPA) Full Requirements | 135-181 | 2006-2010 | ||||||
Franklin Unit 1 (FPL/Progress) | 540 | 6/10-12/15 | ||||||
Harris Unit 1 (FPL) | 625 | 6/10-12/15 | ||||||
(1) | Excluding automatic renewal provisions | ||
(2) | Option in 2009 to convert from full requirements to fixed capacity sale. |
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• | Assessing whether a sales contract meets the definition of a lease | |
• | Assessing whether a sales contract meets the definition of a derivative | |
• | Assessing whether a sales contract meets the definition of a capacity contract | |
• | Assessing the probability at inception and throughout the term of the individual contract that the contract will result in physical delivery | |
• | Ensuring that the contract quantities do not exceed available generating capacity | |
• | Identifying the hedging instrument, the hedged transaction, and the nature of the risk being hedged | |
• | Assessing hedge effectiveness at inception and throughout the contract term. |
• | Future demand for electricity based on projections of economic growth and estimates of available generating capacity | |
• | Future power and natural gas prices, which have been quite volatile in recent years | |
• | Future operating costs. |
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Changes in Fair | ||||||||
Value | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Contracts beginning of year | $ | 9 | $ | 665 | ||||
Contracts realized or settled | (168 | ) | (469 | ) | ||||
New contracts at inception | — | — | ||||||
Current period changes (a) | 382 | (187 | ) | |||||
Contracts end of year | $ | 223 | $ | 9 | ||||
(a) | Current period changes also include the changes in fair value of new contracts entered into during the period. |
Source of 2005 Year-End Valuation Prices | ||||||||||||
Total | Maturity | |||||||||||
Fair Value | 2006 | 2007-2008 | ||||||||||
(in thousands) | ||||||||||||
Actively quoted | $ | 259 | $ | 217 | $ | 42 | ||||||
External sources | (36 | ) | (36 | ) | — | |||||||
Models and other methods | — | — | — | |||||||||
Contracts end of year | $ | 223 | $ | 181 | $ | 42 | ||||||
Amounts (in thousands) | ||||
Net Income | $ | 153 | ||
Other Comprehensive Income | 70 | |||
Total fair value | $ | 223 | ||
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2007- | 2009- | After | ||||||||||||||||||
Contractual Obligations | 2006 | 2008 | 2010 | 2010 | Total | |||||||||||||||
(in millions) | ||||||||||||||||||||
Long-term debt(a) — | ||||||||||||||||||||
Principal | $ | 0.2 | $ | 1.3 | $ | — | $ | 1,100.0 | $ | 1,101.5 | ||||||||||
Interest | 61.6 | 123.1 | 123.1 | 199.8 | 507.6 | |||||||||||||||
Operating leases | 0.7 | 0.9 | 0.6 | 25.1 | 27.3 | |||||||||||||||
Purchase commitments(b)— | ||||||||||||||||||||
Capital(c) | 162.3 | 486.2 | — | — | 648.5 | |||||||||||||||
Natural gas(d) | 20.9 | 42.0 | 45.7 | 300.1 | 408.7 | |||||||||||||||
Long-term service agreements | 27.4 | 83.0 | 76.2 | 938.5 | 1,125.1 | |||||||||||||||
Total | $ | 273.1 | $ | 736.5 | $ | 245.6 | $ | 2,563.5 | $ | 3,818.7 | ||||||||||
(a) | All amounts are reflected based on final maturity dates. The Company plans to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit. |
(b) | The Company generally does not enter into non-cancelable commitments for other operations and maintenance expenditures. Total other operations and maintenance expenses for the last three years were $80.8 million, $75.2 million, and $62.2 million, respectively. |
(c) | The Company forecasts capital expenditures over a three-year period. Amounts represent current estimates of total expenditures. |
(d) | Natural gas purchase commitments are based on various indices at the time of delivery. Amounts reflected have been estimated based on New York Mercantile Exchange future prices at December 31, 2005. |
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• | the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax and other laws and regulations to which the Company is subject, as well as changes in application of existing laws and regulations; |
• | current and future litigation, regulatory investigations, proceedings or inquiries, including FERC matters; |
• | the effects, extent, and timing of the entry of additional competition in the markets in which the Company operates; |
• | variations in demand for electricity, including those relating to weather, the general economy and population, and business growth (and declines); |
• | available sources and costs of fuels; |
• | ability to control costs; |
• | advances in technology; |
• | the ability to avoid cost overruns during the development and construction of facilities, including the IGCC; |
• | state and federal rate regulations; |
• | internal restructuring or other restructuring options that may be pursued; |
• | potential business strategies, including acquisitions or dispositions of assets, which cannot be assured to be completed or beneficial to the Company; |
• | the ability of counterparties of the Company to make payments as and when due; |
• | the ability to obtain new short- and long-term contracts with neighboring utilities; |
• | the direct or indirect effect on the Company’s business resulting from terrorist incidents and the threat of terrorist incidents; |
• | interest rate fluctuations and financial market conditions and the results of financing efforts, including the Company’s credit ratings; |
• | the ability of the Company to obtain additional generating capacity at competitive prices; |
• | catastrophic events such as fires, earthquakes, explosions, floods, hurricanes or similar occurrences; |
• | the direct or indirect effects on the Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; |
• | the effect of accounting pronouncements issued periodically by standard-setting bodies; and |
• | other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Company from time to time with the Securities and Exchange Commission. |
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For the Years Ended December 31, 2005, 2004, and 2003
Southern Power Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Revenues: | ||||||||||||
Sales for resale — | ||||||||||||
Non-affiliates | $ | 223,058 | $ | 266,463 | $ | 278,559 | ||||||
Affiliates | 556,664 | 425,065 | 312,586 | |||||||||
Contract termination | — | — | 80,000 | |||||||||
Other revenues | 1,282 | 9,783 | 10,635 | |||||||||
Total operating revenues | 781,004 | 701,311 | 681,780 | |||||||||
Operating Expenses: | ||||||||||||
Fuel | 209,008 | 127,103 | 115,256 | |||||||||
Purchased power — | ||||||||||||
Non-affiliates | 57,182 | 76,652 | 61,234 | |||||||||
Affiliates | 102,874 | 111,804 | 124,067 | |||||||||
Other operations | 61,235 | 58,111 | 50,852 | |||||||||
Maintenance | 19,570 | 17,084 | 11,389 | |||||||||
Depreciation and amortization | 54,254 | 51,161 | 39,012 | |||||||||
Taxes other than income taxes | 13,314 | 11,273 | 6,665 | |||||||||
Total operating expenses | 517,437 | 453,188 | 408,475 | |||||||||
Operating Income | 263,567 | 248,123 | 273,305 | |||||||||
Other Income and (Expense): | ||||||||||||
Interest expense, net of amounts capitalized | (79,322 | ) | (66,088 | ) | (31,708 | ) | ||||||
Other income (expense), net | 2,379 | 2,408 | (1,594 | ) | ||||||||
Total other income and (expense) | (76,943 | ) | (63,680 | ) | (33,302 | ) | ||||||
Earnings Before Income Taxes | 186,624 | 184,443 | 240,003 | |||||||||
Income taxes | 71,833 | 72,935 | 85,221 | |||||||||
Earnings Before Cumulative Effect of Accounting Change | 114,791 | 111,508 | 154,782 | |||||||||
Cumulative effect of accounting change— less income taxes of $231 | — | — | 367 | |||||||||
Net Income | $ | 114,791 | $ | 111,508 | $ | 155,149 | ||||||
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For the Years Ended December 31, 2005, 2004, and 2003
Southern Power Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Operating Activities: | ||||||||||||
Net income | $ | 114,791 | $ | 111,508 | $ | 155,149 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities — | ||||||||||||
Depreciation and amortization | 68,210 | 65,838 | 47,267 | |||||||||
Deferred income taxes and investment tax credits, net | 24,055 | 23,510 | 22,521 | |||||||||
Deferred revenues | (370 | ) | 10,064 | 9,997 | ||||||||
Tax benefit of stock options | 686 | 415 | 130 | |||||||||
Hedge settlements | — | — | (93,298 | ) | ||||||||
Other, net | 2,777 | 9,957 | (25,787 | ) | ||||||||
Changes in certain current assets and liabilities — | ||||||||||||
Receivables | (42,355 | ) | (14,009 | ) | (7,008 | ) | ||||||
Fossil fuel stock | (4,316 | ) | 2,894 | 5,232 | ||||||||
Materials and supplies | (4,096 | ) | (1,715 | ) | (1,570 | ) | ||||||
Other current assets | (5,900 | ) | 4,144 | (9,675 | ) | |||||||
Accounts payable | 41,662 | (13,844 | ) | 32,694 | ||||||||
Accrued taxes | 5,782 | 32,330 | (6,939 | ) | ||||||||
Accrued interest | 535 | (1,386 | ) | 9,299 | ||||||||
Other current liabilities | — | (306 | ) | 236 | ||||||||
Net cash provided from operating activities | 201,461 | 229,400 | 138,248 | |||||||||
Investing Activities: | ||||||||||||
Property additions | (241,103 | ) | (115,606 | ) | (344,362 | ) | ||||||
Sale of property to affiliates | — | 414,582 | — | |||||||||
Change in construction payables, net | (124 | ) | (14,349 | ) | (16,931 | ) | ||||||
Other | — | (10,043 | ) | — | ||||||||
Net cash provided from (used for) investing activities | (241,227 | ) | 274,584 | (361,293 | ) | |||||||
Financing Activities: | ||||||||||||
Increase (decrease) in notes payable, net — affiliated | — | — | (20,488 | ) | ||||||||
Increase (decrease) in notes payable, net | 110,692 | (114,349 | ) | 114,347 | ||||||||
Proceeds — | ||||||||||||
Senior notes | — | — | 575,000 | |||||||||
Capital contributions from parent company | 5,022 | 2,808 | 5,952 | |||||||||
Redemptions — | ||||||||||||
Senior notes | — | (50,000 | ) | — | ||||||||
Other long-term debt | (200 | ) | — | (379,640 | ) | |||||||
Capital distributions to parent company | — | (113,000 | ) | (77,000 | ) | |||||||
Payment of common stock dividends | (72,400 | ) | (207,000 | ) | — | |||||||
Other | (958 | ) | — | (11,802 | ) | |||||||
Net cash provided from (used for) financing activities | 42,156 | (481,541 | ) | 206,369 | ||||||||
Net Change in Cash and Cash Equivalents | 2,390 | 22,443 | (16,676 | ) | ||||||||
Cash and Cash Equivalents at Beginning of Year | 25,241 | 2,798 | 19,474 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 27,631 | $ | 25,241 | $ | 2,798 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the period for — | ||||||||||||
Interest (net of $0, $17,368 and $36,736 capitalized, respectively) | $ | 64,487 | $ | 52,146 | $ | 105,765 | ||||||
Income taxes (net of refunds) | 33,751 | 13,313 | 77,993 | |||||||||
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At December 31, 2005 and 2004
Southern Power Company and Subsidiary Companies 2005 Annual Report
Assets | 2005 | 2004 | ||||||
(in thousands) | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 27,631 | $ | 25,241 | ||||
Receivables — | �� | |||||||
Customer accounts receivable | 20,953 | 12,865 | ||||||
Other accounts receivable | 93 | 893 | ||||||
Accumulated provision for uncollectible accounts | — | (350 | ) | |||||
Affiliated companies | 60,505 | 25,423 | ||||||
Fossil fuel stock, at average cost | 7,221 | 2,904 | ||||||
Materials and supplies, at average cost | 15,628 | 9,839 | ||||||
Prepaid income taxes | — | 4,619 | ||||||
Prepaid expenses | 10,788 | 8,085 | ||||||
Other | 251 | 112 | ||||||
Total current assets | 143,070 | 89,631 | ||||||
Property, Plant, and Equipment: | ||||||||
In service | 2,030,996 | 1,821,434 | ||||||
Less accumulated provision for depreciation | 161,358 | 111,200 | ||||||
1,869,638 | 1,710,234 | |||||||
Construction work in progress | 218,812 | 200,903 | ||||||
Total property, plant, and equipment | 2,088,450 | 1,911,137 | ||||||
Deferred Charges and Other Assets: | ||||||||
Prepaid long-term service agreements | 46,447 | 34,800 | ||||||
Other— | ||||||||
Affiliated | 4,496 | 6,455 | ||||||
Other | 20,513 | 24,990 | ||||||
Total deferred charges and other assets | 71,456 | 66,245 | ||||||
Total Assets | $ | 2,302,976 | $ | 2,067,013 | ||||
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At December 31, 2005 and 2004
Southern Power Company and Subsidiary Companies 2005 Annual Report
Liabilities and Stockholder’s Equity | 2005 | 2004 | ||||||||||
(in thousands) | ||||||||||||
Current Liabilities: | ||||||||||||
Securities due within one year | $ | 200 | $ | 200 | ||||||||
Notes payable | 110,692 | — | ||||||||||
Accounts payable — | ||||||||||||
Affiliated | 65,262 | 19,265 | ||||||||||
Other | 7,651 | 11,024 | ||||||||||
Accrued taxes — | ||||||||||||
Income taxes | 3,477 | — | ||||||||||
Other | 2,524 | 4,104 | ||||||||||
Accrued interest | 29,161 | 28,626 | ||||||||||
Other | 71 | 83 | ||||||||||
Total current liabilities | 219,038 | 63,302 | ||||||||||
Long-Term Debt: | ||||||||||||
Senior notes — | ||||||||||||
6.25% due 2012 | 575,000 | 575,000 | ||||||||||
4.875% due 2015 | 525,000 | 525,000 | ||||||||||
Other long-term debt | 1,285 | 1,485 | ||||||||||
Unamortized debt discount | (1,765 | ) | (2,050 | ) | ||||||||
Long-term debt | 1,099,520 | 1,099,435 | ||||||||||
Deferred Credits and Other Liabilities: | ||||||||||||
Accumulated deferred income taxes | 68,535 | 40,212 | ||||||||||
Deferred capacity revenues — affiliated | 37,534 | 39,118 | ||||||||||
Other — | ||||||||||||
Affiliated | 10,792 | 13,333 | ||||||||||
Other | 1,214 | 2 | ||||||||||
Total deferred credits and other liabilities | 118,075 | 92,665 | ||||||||||
Total Liabilities | 1,436,633 | 1,255,402 | ||||||||||
Common Stockholder’s Equity: | ||||||||||||
Common stock, par value $0.01 per share — | ||||||||||||
Authorized - 1,000,000 shares | ||||||||||||
Outstanding - 1,000 shares | — | — | ||||||||||
Paid-in capital | 746,243 | 740,535 | ||||||||||
Retained earnings | 164,525 | 122,134 | ||||||||||
Accumulated other comprehensive income (loss) | (44,425 | ) | (51,058 | ) | ||||||||
Total common stockholder’s equity | 866,343 | 811,611 | ||||||||||
Total Liabilities and Stockholder’s Equity | $ | 2,302,976 | $ | 2,067,013 | ||||||||
Commitments and Contingent Matters(See notes) | ||||||||||||
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Southern Power Company and Subsidiary Companies 2005 Annual Report
Other | ||||||||||||||||||||
Common | Paid-In | Retained | Comprehensive | |||||||||||||||||
Stock | Capital | Earnings | Income (loss) | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2002 | $ | — | $ | 731,230 | $ | 62,477 | $ | (47,103 | ) | $ | 746,604 | |||||||||
Net income | — | — | 155,149 | — | 155,149 | |||||||||||||||
Conversion of parent company debt to equity | — | 190,000 | — | — | 190,000 | |||||||||||||||
Capital distributions to parent company | — | (77,000 | ) | — | — | (77,000 | ) | |||||||||||||
Capital contributions from parent company | — | 6,082 | — | — | 6,082 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | (9,359 | ) | (9,359 | ) | |||||||||||||
Balance at December 31, 2003 | — | 850,312 | 217,626 | (56,462 | ) | 1,011,476 | ||||||||||||||
Net income | — | — | 111,508 | — | 111,508 | |||||||||||||||
Capital distributions to parent company | — | (113,000 | ) | — | — | (113,000 | ) | |||||||||||||
Capital contributions from parent company | — | 3,223 | — | — | 3,223 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 5,404 | 5,404 | |||||||||||||||
Cash dividends on common stock | — | — | (207,000 | ) | — | (207,000 | ) | |||||||||||||
Balance at December 31, 2004 | — | 740,535 | 122,134 | (51,058 | ) | 811,611 | ||||||||||||||
Net income | — | — | 114,791 | — | 114,791 | |||||||||||||||
Capital contributions from parent company | — | 5,708 | — | — | 5,708 | |||||||||||||||
Other comprehensive income (loss) | — | — | — | 6,633 | 6,633 | |||||||||||||||
Cash dividends on common stock | — | — | (72,400 | ) | — | (72,400 | ) | |||||||||||||
Balance at December 31, 2005 | $ | — | $ | 746,243 | $ | 164,525 | $ | (44,425 | ) | $ | 866,343 | |||||||||
For the Years Ended December 31, 2005, 2004, and 2003
Southern Power Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Net income | $ | 114,791 | $ | 111,508 | $ | 155,149 | ||||||
Other comprehensive income (loss): | ||||||||||||
Changes in fair value of qualifying hedges, net of tax of $106, $(520), and $(7,872), respectively | 164 | (920 | ) | (12,788 | ) | |||||||
Less: Reclassification adjustment for amounts included in net income, net of tax of $4,155, $3,964 and $1,868, respectively | 6,469 | 6,324 | 3,429 | |||||||||
Total other comprehensive income (loss) | 6,633 | 5,404 | (9,359 | ) | ||||||||
Comprehensive Income | $ | 121,424 | $ | 116,912 | $ | 145,790 | ||||||
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Southern Power Company and Subsidiary Companies 2005 Annual Report
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Carrying | Fair | |||||||
Amount | Value | |||||||
(in millions) | ||||||||
Long-term debt: | ||||||||
2005 | $ | 1,100 | $ | 1,117 | ||||
2004 | $ | 1,099 | $ | 1,114 | ||||
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2005 | 2004 | 2003 | ||||||||||
(in thousands) | ||||||||||||
Total provision for income taxes: | ||||||||||||
Federal: | ||||||||||||
Current | $ | 40,468 | $ | 40,492 | $ | 64,044 | ||||||
Deferred | 20,437 | 19,939 | 19,203 | |||||||||
60,905 | 60,431 | 83,247 | ||||||||||
State: | ||||||||||||
Current | 7,310 | 8,933 | 10,426 | |||||||||
Deferred | 3,618 | 3,571 | 3,318 | |||||||||
State manufacturer’s tax credits | — | — | (11,770 | ) | ||||||||
10,928 | 12,504 | 1,974 | ||||||||||
Total | $ | 71,833 | $ | 72,935 | $ | 85,221 | ||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
Deferred tax liabilities: | ||||||||
Accelerated depreciation | $ | (127,913 | ) | $ | (101,840 | ) | ||
Book/tax basis difference on asset transfer | (4,861 | ) | (6,455 | ) | ||||
Total | (132,774 | ) | (108,295 | ) | ||||
Deferred tax assets: | ||||||||
Book/tax basis differences on asset transfers | 11,878 | 13,333 | ||||||
Other comprehensive loss on interest rate swaps | 31,727 | 35,988 | ||||||
Levelized capacity revenues | 14,221 | 13,819 | ||||||
Other | 6,413 | 4,942 | ||||||
Total | 64,239 | 68,082 | ||||||
Accumulated deferred income taxes in the balance sheets | $ | (68,535 | ) | $ | (40,213 | ) | ||
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Southern Power Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income tax, net of federal deduction | 3.8 | 4.4 | 3.7 | |||||||||
State manufacturer’s tax credits, net of federal effect | — | — | (3.2 | ) | ||||||||
Other | (0.3 | ) | 0.1 | — | ||||||||
Effective income tax rate | 38.5 | % | 39.5 | % | 35.5 | % | ||||||
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Fuel | ||||
Year | Purchases | |||
(in thousands) | ||||
2006 | $ | 20,928 | ||
2007 | 21,272 | |||
2008 | 20,766 | |||
2009 | 18,589 | |||
2010 | 27,110 | |||
2011 and beyond | 300,057 | |||
Total | $ | 408,722 | ||
Operating | Operating | |||||||||||
Quarter Ended | Revenues | Income | Net Income | |||||||||
(in thousands) | ||||||||||||
March 2005 | $ | 152,821 | $ | 56,745 | $ | 23,073 | ||||||
June 2005 | 149,226 | 60,611 | 25,234 | |||||||||
September 2005 | 265,611 | 84,555 | 39,227 | |||||||||
December 2005 | 213,346 | 61,656 | 27,257 | |||||||||
March 2004 | $ | 175,605 | $ | 56,415 | $ | 27,185 | ||||||
June 2004 | 182,749 | 50,562 | 22,417 | |||||||||
September 2004 | 188,941 | 79,260 | 37,322 | |||||||||
December 2004 | 154,016 | 61,886 | 24,584 |
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Southern Power Company and Subsidiary Companies 2005 Annual Report
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Operating Revenues (in thousands): | ||||||||||||||||||||
Sales for resale — non-affiliates | $ | 223,058 | $ | 266,463 | $ | 278,559 | $ | 114,919 | $ | 26,390 | ||||||||||
Sales for resale — affiliates | 556,664 | 425,065 | 312,586 | 183,111 | 2,906 | |||||||||||||||
Total revenues from sales of electricity | 779,722 | 691,528 | 591,145 | 298,030 | 29,296 | |||||||||||||||
Other revenues | 1,282 | 9,783 | 90,635 | 738 | 5 | |||||||||||||||
Total | $ | 781,004 | $ | 701,311 | $ | 681,780 | $ | 298,768 | $ | 29,301 | ||||||||||
Net Income (in thousands) | $ | 114,791 | $ | 111,508 | $ | 155,149 | $ | 54,270 | $ | 8,207 | ||||||||||
Cash Dividends on Common Stock (in thousands) | $ | 72,400 | $ | 207,000 | $ | — | $ | — | $ | — | ||||||||||
Return on Average Common Equity (percent) | 13.68 | 12.23 | 17.65 | 8.94 | 3.51 | |||||||||||||||
Total Assets (in thousands) | $ | 2,302,976 | $ | 2,067,013 | $ | 2,409,285 | $ | 2,085,976 | $ | 822,857 | ||||||||||
Gross Property Additions (in thousands) | $ | 241,103 | $ | 115,606 | $ | 344,362 | $ | 1,214,677 | $ | 765,511 | ||||||||||
Capitalization (in thousands): | ||||||||||||||||||||
Common stock equity | $ | 866,343 | $ | 811,611 | $ | 1,011,476 | $ | 746,604 | $ | 466,993 | ||||||||||
Long-term debt | 1,099,520 | 1,099,435 | 1,149,112 | 955,879 | 293,205 | |||||||||||||||
Total (excluding amounts due within one year) | $ | 1,965,863 | $ | 1,911,046 | $ | 2,160,588 | $ | 1,702,483 | $ | 760,198 | ||||||||||
Capitalization Ratios (percent): | ||||||||||||||||||||
Common stock equity | 44.1 | 42.5 | 46.8 | 43.9 | 61.4 | |||||||||||||||
Long-term debt | 55.9 | 57.5 | 53.2 | 56.1 | 38.6 | |||||||||||||||
Total (excluding amounts due within one year) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Security Ratings: | ||||||||||||||||||||
Unsecured Long-Term Debt - | ||||||||||||||||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | — | |||||||||||||||
Standard and Poor’s | BBB+ | BBB+ | BBB+ | BBB+ | — | |||||||||||||||
Fitch | BBB+ | BBB+ | BBB+ | BBB+ | — | |||||||||||||||
Kilowatt-Hour Sales (in thousands): | ||||||||||||||||||||
Sales for resale — non-affiliates | 3,932,638 | 5,369,261 | 6,057,053 | 1,240,290 | 164,926 | |||||||||||||||
Sales for resale — affiliates | 6,355,249 | 6,583,017 | 5,430,973 | 3,607,107 | 69,307 | |||||||||||||||
Total | 10,287,887 | 11,952,278 | 11,488,026 | 4,847,397 | 234,233 | |||||||||||||||
Average Revenue Per Kilowatt-Hour (cents) | 7.58 | 5.79 | 5.15 | 6.15 | 12.51 | |||||||||||||||
Plant Nameplate Capacity Ratings (year-end) (megawatts) | 5,403 | 4,775 | 4,775 | 2,408 | 800 | |||||||||||||||
Maximum Peak-Hour Demand (megawatts): | ||||||||||||||||||||
Winter | 2,037 | 2,098 | 2,077 | 949 | — | |||||||||||||||
Summer | 2,420 | 2,740 | 2,439 | 1,426 | — | |||||||||||||||
Annual Load Factor (percent) | 48.9 | 54.4 | �� | 54.9 | 51.1 | — | ||||||||||||||
Plant Availability (percent) | 97.6 | 97.9 | 96.8 | 95.1 | 83.7 | |||||||||||||||
Source of Energy Supply (percent): | ||||||||||||||||||||
Gas | 72.6 | 61.9 | 53.4 | 77.4 | 100.0 | |||||||||||||||
Purchased power - | ||||||||||||||||||||
From non-affiliates | 9.6 | 24.7 | 30.5 | 5.9 | — | |||||||||||||||
From affiliates | 17.8 | 13.4 | 16.1 | 16.7 | — | |||||||||||||||
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Table of Contents
President, Chief Executive Officer and Director
Age 56
Served as Director since 2004
Age 68
Nominee
Age 54
Served as Director since 2003
Age 52
Served as Director since 2004
Age 53
Served as Director since 2001
Age 57
Served as Director since 1999
Age 59
Served as Director since 2003
Age 58
Served as Director since 2001
Age 65
Served as Director since 1988
Age 54
Served as Director since 2001
III-1
Table of Contents
President, Chief Executive Officer and Director
Age 56
Served as Executive Officer since 2003
Executive Vice President
Age 57
Served as Executive Officer since 1995
Executive Vice President
Age 58
Served as Executive Officer since 2001
Executive Vice President, Chief Financial Officer and Treasurer
Age 55
Served as Executive Officer since 2005
Executive Vice President
Age 47
Served as Executive Officer since 2001
Senior Vice President
Age 57
Served as Executive Officer since 2001
Senior Vice President
Age 54
Served as Executive Officer since 2003
Senior Vice President
Age 47
Served as Executive Officer since 2005
Senior Vice President and General Counsel
Age 56
Served as Executive Officer since 2004
Vice President
Age 43
Served as Executive Officer since 2001
Gene L. Ussery, Jr.
Vice President
Age 56
Served as Vice President since 2005
(1) | Mr. Archer will retire as Executive Vice President, effective March 19, 2006. | |
(2) | Mr. Womack was elected Executive Vice President of External Affairs, effective March 11, 2006. | |
(3) | Mr. Jones was elected Senior Vice President of Fossil and Hydro Generation, effective March 11, 2006. |
None.
None.
III-2
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III-3
Table of Contents
None.
Compliance.
None.
President and Chief Executive Officer
Age 45
Served as Director since 2003
Age 65
Served as Director since 2001
Age 53
Served as Director since 2002
Age 65
Served as Director since 1991
Age 58
Served as Director since 2001
Age 55
Served as Director since 2003
(1) | No position other than director. |
President and Chief Executive Officer
Age 45
Served as Executive Officer since 2003
III-4
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Vice President – Customer Operations
Age 57
Served as Executive Officer since 1989
Vice President – External Affairs and
Corporate Services
Age 51
Served as Executive Officer since 2003
Vice President and Chief Financial Officer
Age 52
Served as Executive Officer since 2000
Vice President – Senior Production Officer
Age 43
Served as Executive Officer since 2005
None.
None.
Vice President of Customer Operations since 1996.
III-5
Table of Contents
None.
None.
Age 48
Served as Director since 2005
Age 68
Served as Director since 1999
Age 64
Served as Director since 1997
Age 60
Served as Director since 1983
Age 69
Served as Director since 1977
(1) | No position other than director. |
President, Chief Executive Officer and Director
Age 48
Served as Executive Officer since 2005
Vice President
Age 62
Served as Executive Officer since 1985
Vice President, Treasurer, Chief Financial Officer
and Assistant Corporate Secretary
Age 54
Served as Executive Officer since 1994
(1) | Mr. Barrs was elected President and Chief Executive Officer, effective December 13, 2005. He will be named Vice President of Georgia Power’s new coastal region when the merger of Georgia Power and Savannah Electric is completed. |
None.
None.
President and Chief Executive Officer since December 2005. He previously served as Vice President of Community and Economic
III-6
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None.
None.
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ANNUAL COMPENSATION | LONG-TERM COMPENSATION | |||||||||||||||||||||||||||
�� | Number of | |||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||
Underlying | Long-Term | |||||||||||||||||||||||||||
Other Annual | Stock | Incentive | All Other | |||||||||||||||||||||||||
Name and | Compensation | Options | Payouts | Compensation | ||||||||||||||||||||||||
Principal Position | Year | Salary($) | Bonus($) | ($)1 | (Shares) | ($)2 | ($)3 | |||||||||||||||||||||
Michael D. Garrett President, Chief | 2005 | 526,125 | 850,669 | 6,275 | 78,565 | 139,687 | 27,974 | |||||||||||||||||||||
Executive Officer, | 2004 | 498,323 | 764,213 | 161,355 | 53,419 | 231,474 | 121,563 | |||||||||||||||||||||
Director | ||||||||||||||||||||||||||||
James H. Miller, III | 2005 | 298,553 | 319,785 | 21,182 | 27,073 | 129,989 | 41,456 | |||||||||||||||||||||
Senior Vice President, | 2004 | 291,698 | 294,772 | 79,597 | 27,361 | 192,587 | 14,546 | |||||||||||||||||||||
General Counsel | ||||||||||||||||||||||||||||
William C. Archer | 2005 | 293,106 | 313,951 | 47,061 | 26,579 | 137,031 | 91,126 | |||||||||||||||||||||
Executive Vice | 2004 | 276,867 | 291,928 | 3,716 | 25,582 | 168,992 | 14,412 | |||||||||||||||||||||
President | 2003 | 262,894 | 267,282 | 3,142 | 26,560 | 234,317 | 14,029 | |||||||||||||||||||||
Christopher C. Womack | 2005 | 290,472 | 288,552 | 57,373 | 26,413 | 135,237 | 31,049 | |||||||||||||||||||||
Executive Vice | 2004 | 278,010 | 250,897 | 8,530 | 26,310 | 218,962 | 27,630 | |||||||||||||||||||||
President | 2003 | 266,274 | 246,799 | 11,074 | 26,923 | 247,563 | 23,648 | |||||||||||||||||||||
Mickey A. Brown | 2005 | 286,403 | 308,874 | 2,680 | 26,199 | 69,032 | 15,155 | |||||||||||||||||||||
Executive Vice | 2004 | 243,714 | 224,990 | 3,227 | 18,820 | 119,742 | 13,117 | |||||||||||||||||||||
President | 2003 | 226,601 | 216,296 | 2,492 | 18,091 | 141,113 | 11,080 | |||||||||||||||||||||
C. B. Harreld4 Executive Vice | 2005 | 286,867 | 302,383 | 18,777 | 25,498 | 57,204 | 37,738 | |||||||||||||||||||||
President, Chief | 2004 | 263,053 | 277,362 | 5,156 | 24,306 | 87,902 | 13,902 | |||||||||||||||||||||
Financial Officer | 2003 | 240,504 | 231,977 | 10,153 | 19,117 | 111,832 | 28,027 |
1 | This column reports tax reimbursements on certain perquisites and personal benefits as well as on additional incentive compensation, if applicable. Additional incentive compensation is reported in the All Other Compensation Column. In 2005, the amount for Mr. Womack includes country club dues of $25,669. In 2004, the amount for Messrs. Garrett and Miller also includes country club dues of $60,000 and $37,500, respectively. | |
2 | Payout of performance dividend equivalents on stock options granted after 1996 that were held by the executive at the end of the performance periods under the Southern Company’s Omnibus Incentive Compensation Plan (“Omnibus Incentive Compensation Plan”) for the four-year performance periods ended December 31, 2003, 2004 and 2005, respectively. Effective January 1, 2005, dividend equivalents can range from approximately five percent of the common stock dividend paid during the last year of the performance period if total shareholder return over the four-year period, compared to a group of other large utility companies, is above the 10th percentile to 100 percent of the dividend paid if it reaches the 90th percentile. For eligible stock options held on December 31, 2003, 2004 and 2005, all named executives earned a payout of $1.385, $1.22 and $0.83 per option, respectively. | |
3 | Contributions in 2005 to the Employee Savings Plan (ESP), Employee Stock Ownership Plan (ESOP) and Supplemental Benefit Plan (SBP) are as follows: |
Name | ESP | ESOP | SBP | |||||||||
Michael D. Garrett | $ | 9,450 | $ | 773 | $ | 17,751 | ||||||
James H. Miller, III | 9,450 | 773 | 6,233 | |||||||||
William C. Archer | 8,769 | 773 | 6,584 | |||||||||
Christopher C. Womack | 9,450 | 773 | 5,826 | |||||||||
Mickey A. Brown | 9,450 | 773 | 4,932 | |||||||||
C. B. Harreld | 9,169 | 773 | 1,796 |
In 2005, Messrs. Miller, Archer, Womack and Harreld received additional incentive compensation of $25,000, $75,000, $15,000 and $26,000, respectively. In 2004, Messrs. Garrett and Womack received additional incentive compensation in the amounts of $25,000 and $12,500, respectively. In 2004, Mr. Garrett received additional relocation assistance of $71,698. In 2003, Messrs. Womack and Harreld received additional incentive compensation of $10,000 and $15,554, respectively. | ||
4 | Mr. Harreld resigned from Georgia Power effective March 17, 2005 and was elected Executive Vice President of SCS and Chief Financial Officer of Southern Company’s transmission business unit. |
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ANNUAL COMPENSATION | LONG-TERM COMPENSATION | |||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||
Securities | Long- | |||||||||||||||||||||||||||
Name | Underlying | Term | ||||||||||||||||||||||||||
and | Other Annual | Stock | Incentive | All Other | ||||||||||||||||||||||||
Principal | Compensation | Options | Payouts | Compensation | ||||||||||||||||||||||||
Position | Year | Salary($) | Bonus($) | ($)5 | (Shares) | ($)6 | ($)7 | |||||||||||||||||||||
Susan N. Story President, Chief | 2005 | 332,029 | 348,515 | 3,651 | 38,529 | 75,816 | 17,571 | |||||||||||||||||||||
Executive Officer, | 2004 | 313,256 | 254,668 | 6,811 | 37,837 | 156,306 | 16,531 | |||||||||||||||||||||
Director | 2003 | 297,771 | 245,241 | 3,572 | 24,978 | 138,695 | 14,203 | |||||||||||||||||||||
Francis M. Fisher, Jr. | 2005 | 230,294 | 180,481 | 2,597 | 17,102 | 75,503 | 11,603 | |||||||||||||||||||||
Vice President | 2004 | 222,455 | 135,067 | 3,470 | 17,200 | 104,933 | 13,987 | |||||||||||||||||||||
2003 | 214,404 | 130,248 | 2,436 | 17,737 | 135,659 | 10,772 | ||||||||||||||||||||||
Ronnie R. Labrato | 2005 | 211,120 | 165,757 | 6,200 | 15,707 | 44,197 | 20,890 | |||||||||||||||||||||
Vice President and | 2004 | 202,063 | 122,861 | 2,399 | 15,646 | 47,631 | 12,986 | |||||||||||||||||||||
Chief Financial Officer | 2003 | 183,716 | 108,945 | 21 | 11,530 | 57,461 | 9,217 | |||||||||||||||||||||
P. Bernard Jacob | 2005 | 190,869 | 149,993 | 8,439 | 14,213 | 21,441 | 24,711 | |||||||||||||||||||||
Vice President | 2004 | 180,415 | 109,874 | 3,093 | 14,090 | 25,664 | 12,112 | |||||||||||||||||||||
2003 | 167,967 | 94,904 | 2,471 | 6,678 | 22,150 | 7,734 | ||||||||||||||||||||||
Penny M. Manuel8 | 2005 | 163,737 | 128,128 | 5,524 | 5,961 | 20,159 | 25,196 | |||||||||||||||||||||
Vice President | ||||||||||||||||||||||||||||
Gene L. Ussery, Jr.9 | 2005 | 252,160 | 243,312 | 6,553 | 18,944 | 61,442 | 18,290 | |||||||||||||||||||||
Vice President | 2004 | 230,587 | 187,621 | 10,534 | 17,886 | 87,520 | 27,759 | |||||||||||||||||||||
2003 | 218,752 | 182,806 | 8,388 | 18,129 | 110,711 | 11,488 |
5 | This column reports tax reimbursements on certain perquisites and personal benefits as well as on additional incentive compensation, if applicable. Additional incentive compensation is reported in the All Other Compensation Column. | |
6 | Payout of performance dividend equivalents on stock options granted after 1996 that were held by the executive at the end of the performance periods under the Southern Company’s Omnibus Incentive Compensation Plan (“Omnibus Incentive Compensation Plan”) for the four-year performance periods ended December 31, 2003, 2004 and 2005, respectively. Effective January 1, 2005, dividend equivalents can range from approximately five percent of the common stock dividend paid during the last year of the performance period if total shareholder return over the four-year period, compared to a group of other large utility companies, is above the 10th percentile to 100 percent of the dividend paid if it reaches the 90th percentile. For eligible stock options held on December 31, 2003, 2004 and 2005, all named executives earned a payout of $1.385, $1.22 and $0.83 per option, respectively. | |
7 | Contributions in 2005 to the Employee Savings Plan (ESP), Employee Stock Ownership Plan (ESOP) and Supplemental Benefit Plan (SBP) are as follows: |
Name | ESP | ESOP | SBP | |||||||||
Susan N. Story | $ | 9,450 | $ | 773 | $ | 7,348 | ||||||
Francis M. Fisher, Jr. | 8,703 | 773 | 2,127 | |||||||||
Ronnie R. Labrato | 9,408 | 773 | 709 | |||||||||
P. Bernard Jacob | 8,589 | 773 | 349 | |||||||||
Penny M. Manuel | 7,221 | 773 | 202 | |||||||||
Gene L. Ussery, Jr. | 9,450 | 773 | 3,067 |
In 2005, this amount for Messrs. Labrato, Jacob and Ussery includes additional incentive compensation of $10,000, $15,000 and $5,000, respectively, and for Ms. Manuel includes incentive compensation of $17,000 related to relocation. In 2004, the amounts for Messrs. Fisher, Labrato and Jacob included additional incentive compensation of $3,000, $3,000 and $3,000, respectively. | ||
8 | Ms. Manuel became an executive officer of Gulf Power in February 2005. | |
9 | Mr. Ussery resigned from Gulf Power in February 2005 and was elected a Vice President of Georgia Power in February 2005. |
III-9
Table of Contents
ANNUAL COMPENSATION | LONG-TERM COMPENSATION | |||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||
Securities | Long- | |||||||||||||||||||||||||||
Name | Underlying | Term | ||||||||||||||||||||||||||
and | Other Annual | Stock | Incentive | All Other | ||||||||||||||||||||||||
Principal | Compensation | Options | Payouts | Compensation | ||||||||||||||||||||||||
Position | Year | Salary($) | Bonus($) | ($)10 | (Shares) | ($)11 | ($)12 | |||||||||||||||||||||
Anthony R. James13 | 2005 | 273,741 | 252,006 | 3,325 | 31,709 | 106,779 | 14,710 | |||||||||||||||||||||
Chairman | 2004 | 260,755 | 214,741 | 3,403 | 31,435 | 158,804 | 13,881 | |||||||||||||||||||||
2003 | 248,342 | 183,462 | 3,168 | 32,015 | 164,732 | 11,956 | ||||||||||||||||||||||
W. Craig Barrs14 | 2005 | 175,155 | 150,908 | 797 | 10,162 | 31,164 | 8,729 | |||||||||||||||||||||
President, Chief Executive Officer, Director | ||||||||||||||||||||||||||||
W. Miles Greer | 2005 | 209,882 | 128,342 | 166 | 12,111 | 42,640 | 25,613 | |||||||||||||||||||||
Vice President | 2004 | 203,900 | 111,487 | 57 | 12,240 | 87,556 | 23,507 | |||||||||||||||||||||
2003 | 198,238 | 97,376 | 1,716 | 12,744 | 111,890 | 24,702 | ||||||||||||||||||||||
Kirby R. Willis Vice President, Chief Financial Officer, | 2005 | 193,440 | 118,287 | 924 | 11,162 | 39,213 | 16,010 | |||||||||||||||||||||
Treasurer, Assistant | 2004 | 187,827 | 82,202 | 748 | 11,281 | 61,834 | 15,602 | |||||||||||||||||||||
Corporate Secretary | 2003 | 182,109 | 89,491 | 2,207 | 11,712 | 68,470 | 14,634 |
10 | This column reports tax reimbursements on certain perquisites and personal benefits as well as on additional incentive compensation, if applicable. Additional incentive compensation is reported in the All Other Compensation Column. | |
11 | Payout of performance dividend equivalents on stock options granted after 1996 that were held by the executive at the end of the performance periods under the Southern Company’s Omnibus Incentive Compensation Plan (“Omnibus Incentive Compensation Plan”) for the four-year performance periods ended December 31, 2003, 2004 and 2005, respectively. Effective January 1, 2005, dividend equivalents can range from approximately five percent of the common stock dividend paid during the last year of the performance period if total shareholder return over the four-year period, compared to a group of other large utility companies, is above the 10th percentile to 100 percent of the dividend paid if it reaches the 90th percentile. For eligible stock options held on December 31, 2003, 2004 and 2005, all named executives earned a payout of $1.385, $1.22 and $0.83 per option, respectively. | |
12 | Contributions in 2005 to the Employee Savings Plan (ESP), Employee Stock Ownership Plan (ESOP) and Supplemental Benefit Plan (SBP) or Above-Market Earnings on deferred compensation (AME) are as follows: |
Name | ESP | ESOP | SBP or AME | |||||||||
Anthony R. James | $ | 9,216 | $ | 773 | $ | 4,621 | ||||||
W. Craig Barrs | 7,362 | 773 | 494 | |||||||||
W. Miles Greer | 9,445 | 773 | 15,295 | |||||||||
Kirby R. Willis | 7,935 | 679 | 7,296 |
In 2005, this amount for Messrs. James, Greer and Willis includes a $100 safety award. | ||
13 | Mr. James resigned as President and Chief Executive Officer of Savannah Electric effective December 13, 2005 and was elected Chairman of Savannah Electric’s board of directors from December 13, 2005 until January 31, 2006. In addition, Mr. James was elected an Executive Vice President of SCS on December 13, 2005. | |
14 | Mr. Barrs was elected President and Chief Executive Officer of Savannah Electric effective December 13, 2005. |
III-10
Table of Contents
Individual Grants | Grant Date Value | |||||||||||||||||||
% of Total | ||||||||||||||||||||
# of Securities | Options | |||||||||||||||||||
Underlying | Granted to | Exercise | ||||||||||||||||||
Options | Employee in | or Base Price | Expiration | Grant Date | ||||||||||||||||
Name | Granted15 | Fiscal Year16 | ($/Sh)15 | Date15 | Present Value17 | |||||||||||||||
Georgia Power | ||||||||||||||||||||
Michael D. Garrett | 78,565 | 5.6 | $ | 32.70 | 02/18/2015 | $ | 306,404 | |||||||||||||
James H. Miller, III | 27,073 | 1.9 | $ | 32.70 | 02/18/2015 | 105,585 | ||||||||||||||
William C. Archer | 26,579 | 1.9 | $ | 32.70 | 02/18/2015 | 103,658 | ||||||||||||||
Christopher C. Womack | 26,413 | 1.9 | $ | 32.70 | 02/18/2015 | 103,011 | ||||||||||||||
Mickey A. Brown | 26,199 | 1.9 | $ | 32.70 | 02/18/2015 | 102,176 | ||||||||||||||
C. B. Harreld | 25,498 | 1.8 | $ | 32.70 | 02/18/2015 | 99,442 | ||||||||||||||
Gulf Power | ||||||||||||||||||||
Susan N. Story | 38,529 | 15.4 | $ | 32.70 | 02/18/2015 | 150,263 | ||||||||||||||
Francis M. Fisher, Jr. | 17,102 | 6.8 | $ | 32.70 | 02/18/2015 | 66,698 | ||||||||||||||
Ronnie R. Labrato | 15,707 | 6.3 | $ | 32.70 | 02/18/2015 | 61,257 | ||||||||||||||
P. Bernard Jacob | 14,213 | 5.7 | $ | 32.70 | 02/18/2015 | 55,431 | ||||||||||||||
Penny M. Manuel | 5,961 | 2.4 | $ | 32.70 | 02/18/2015 | 23,248 | ||||||||||||||
Gene L. Ussery, Jr. | 18,944 | 7.5 | $ | 32.70 | 02/18/2015 | 73,882 | ||||||||||||||
Savannah Electric | ||||||||||||||||||||
Anthony R. James | 31,709 | 26.2 | $ | 32.70 | 02/18/2015 | 123,665 | ||||||||||||||
W. Craig Barrs | 10,162 | 8.4 | $ | 32.70 | 02/18/2015 | 39,632 | ||||||||||||||
W. Miles Greer | 12,111 | 10.0 | $ | 32.70 | 02/18/2015 | 47,233 | ||||||||||||||
Kirby R. Willis | 11,162 | 9.2 | $ | 32.70 | 02/18/2015 | 43,532 |
15 | Under the terms of the Omnibus Incentive Compensation Plan, stock option grants were made on February 18, 2005 and vest annually at a rate of one-third on the anniversary date of the grant. Grants fully vest upon termination as a result of death, total disability or retirement and expire five years after retirement, three years after death or total disability or their normal expiration date if earlier. The exercise price is the average of the high and low price of Southern Company’s common stock on the date granted. Options may be transferred to a revocable trust. | |
16 | A total of 1,411,442, 250,874 and 120,986 stock options were granted in 2005 to the employees of Georgia Power, Gulf Power and Savannah Electric, respectively. | |
17 | Value was calculated using the Black-Scholes option valuation model. The actual value, if any, ultimately realized depends on the market value of Southern Company’s common stock at a future date. Significant assumptions are shown below: |
Risk-free | Dividend | Expected | ||||
Volatility | rate of return | Yield | Term | |||
17.9% | 3.87% | 4.38% | 5 years | |||
III-11
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Shares | Number of Securities Underlying | Value of Unexercised | ||||||||||||||||||||||
Acquired | Unexercised Options at Fiscal | In-the-Money Options | ||||||||||||||||||||||
on | Value | Year-End (#) | At Year-End ($)18 | |||||||||||||||||||||
Name | Exercise (#) | Realized ($)19 | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Georgia Power | ||||||||||||||||||||||||
Michael D. Garrett | 100,000 | 1,013,825 | 38,885 | 129,413 | 227,735 | 422,774 | ||||||||||||||||||
James H. Miller, III | 28,318 | 395,271 | 101,644 | 54,969 | 966,236 | 204,586 | ||||||||||||||||||
William C. Archer | 0 | 0 | 112,611 | 52,486 | 1,206,509 | 192,453 | ||||||||||||||||||
Christopher C. Womack | 42,954 | 821,660 | 110,009 | 52,927 | 1,169,434 | 195,387 | ||||||||||||||||||
Mickey A. Brown | 41,177 | 495,869 | 38,396 | 44,775 | 296,584 | 150,577 | ||||||||||||||||||
C. B. Harreld | 28,628 | 249,479 | 20,847 | 48,074 | 124,296 | 169,936 | ||||||||||||||||||
Gulf Power | ||||||||||||||||||||||||
Susan N. Story | 75,305 | 858,273 | 19,265 | 72,079 | 107,047 | 251,962 | ||||||||||||||||||
Francis M. Fisher, Jr. | 12,146 | 178,541 | 56,487 | 34,480 | 521,513 | 127,724 | ||||||||||||||||||
Ronnie R. Labrato | 1,500 | 14,758 | 23,269 | 29,980 | 172,718 | 106,398 | ||||||||||||||||||
P. Bernard Jacob | 9,417 | 75,180 | 0 | 25,832 | 0 | 87,848 | ||||||||||||||||||
Penny M. Manuel | 0 | 0 | 12,380 | 11,908 | 95,509 | 43,883 | ||||||||||||||||||
Gene L. Ussery, Jr. | 16,656 | 185,802 | 37,115 | 36,911 | 285,964 | 134,257 | ||||||||||||||||||
Savannah Electric | ||||||||||||||||||||||||
Anthony R. James | 33,227 | 462,548 | 65,312 | 63,337 | 503,065 | 233,391 | ||||||||||||||||||
W. Craig Barrs | 11,619 | 158,890 | 17,312 | 20,235 | 127,802 | 74,479 | ||||||||||||||||||
W. Miles Greer | 32,505 | 447,151 | 26,854 | 24,519 | 208,571 | 91,054 | ||||||||||||||||||
Kirby R. Willis | 14,601 | 184,301 | 24,659 | 22,586 | 191,444 | 83,843 |
18 | This column represents the excess of the fair market value of Southern Company’s common stock of $34.53 per share, as of December 31, 2005, above the exercise price of the options. The Exercisable column reports the “value” of options that are vested and therefore could be exercised. The Unexercisable column reports the “value” of options that are not vested and therefore could not be exercised as of December 31, 2005. | |
19 | The “Value Realized” is ordinary income, before taxes, and represents the amount equal to the excess of the fair market value of the shares at the time of exercise above the exercise price. |
III-12
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Years of Accredited Service | ||||||||||||||||||||||||||
Remuneration | 15 | 20 | 25 | 30 | 35 | 40 | ||||||||||||||||||||
$ | 100,000 | $ | 25,500 | $ | 34,000 | $ | 42,500 | $ | 51,000 | $ | 59,500 | $ | 68,000 | |||||||||||||
300,000 | 76,500 | 102,000 | 127,500 | 153,000 | 178,500 | 204,000 | ||||||||||||||||||||
500,000 | 127,500 | 170,000 | 212,500 | 255,000 | 297,500 | 340,000 | ||||||||||||||||||||
700,000 | 178,500 | 238,000 | 297,500 | 357,000 | 416,500 | 476,000 | ||||||||||||||||||||
900,000 | 229,500 | 306,000 | 382,500 | 459,000 | 535,500 | 612,000 | ||||||||||||||||||||
1,100,000 | 280,500 | 374,000 | 467,500 | 561,000 | 654,500 | 748,000 | ||||||||||||||||||||
1,300,000 | 331,500 | 442,000 | 552,500 | 663,000 | 773,500 | 884,000 | ||||||||||||||||||||
1,500,000 | 382,500 | 510,000 | 637,500 | 765,000 | 892,500 | 1,020,000 |
Compensation | Accredited | |||||||
Name | Level | Years of Service | ||||||
Michael D. Garrett | $ | 1,071,895 | 37 | |||||
James H. Miller, III20 | 550,038 | 21 | ||||||
William C. Archer | 530,649 | 34 | ||||||
Christopher C. Womack21 | 500,519 | 25 | ||||||
Mickey A. Brown | 469,242 | 35 | ||||||
C. B. Harreld22 | 501,389 | 32 |
20 | The number of accredited years of service includes 10 years credited to Mr. Miller pursuant to a supplemental pension agreement. | |
21 | The number of accredited years of service includes eight years credited to Mr. Womack pursuant to a supplemental pension agreement. | |
22 | The number of accredited years of service includes 10 years credited to Mr. Harreld pursuant to a deferred compensation agreement. |
III-13
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Compensation | Accredited | |||||||
Name | Level | Years of Service | ||||||
Susan N. Story | $ | 548,779 | 23 | |||||
Francis M. Fisher, Jr. | 338,949 | 34 | ||||||
Ronnie R. Labrato | 305,820 | 26 | ||||||
P. Bernard Jacob | 270,464 | 22 | ||||||
Penny M. Manuel | 224,814 | 22 | ||||||
Gene L. Ussery, Jr. | 405,889 | 37 |
Compensation | Accredited | |||||||
Name | Level | Years of Service | ||||||
Anthony R. James | $ | 440,603 | 26 | |||||
W. Craig Barrs | 285,876 | 24 | ||||||
W. Miles Greer23 | 286,813 | 29 | ||||||
Kirby R. Willis24 | 257,532 | 31 |
Years of Accredited Service | ||||||||||||||
Remuneration | 15 | 25 | 35 | |||||||||||
$ | 150,000 | $ | 105,000 | $ | 105,000 | $ | 105,000 | |||||||
180,000 | 126,000 | 126,000 | 126,000 | |||||||||||
210,000 | 147,000 | 147,000 | 147,000 | |||||||||||
260,000 | 182,000 | 182,000 | 182,000 | |||||||||||
280,000 | 196,000 | 196,000 | 196,000 | |||||||||||
300,000 | 210,000 | 210,000 | 210,000 | |||||||||||
350,000 | 245,000 | 245,000 | 245,000 | |||||||||||
400,000 | 280,000 | 280,000 | 280,000 | |||||||||||
430,000 | 301,000 | 301,000 | 301,000 | |||||||||||
460,000 | 322,000 | 322,000 | 322,000 |
23 | The number of accredited years of service includes seven years and six months and eight years credited to Mr. Greer under the Southern Company Pension Plan and the Supplemental Executive Retirement Plan, respectively. | |
24 | The number of accredited years of service includes five years and five months granted to Mr. Willis for time served at a non-affiliated electric utility. |
III-14
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Georgia Power | ||
Annual Cash Retainer Fee | $22,000 | |
Committee Chair Annual Retainer | $3,000 | |
Annual Stock Retainer Fee | 520 shares of Southern Company common stock | |
Meeting Fees | $1,800 for each Board meeting attended, | |
$1,200 for each Committee meeting attended and | ||
$1,200 for each site visit, extra session or conference fee | ||
Gulf Power | ||
Annual Cash Retainer Fee | $12,000 | |
Quarterly Stock Retainer Fee | 85 shares of Southern Company common stock | |
Meeting Fees | $1,200 for each Board meeting attended and | |
$1,000 for each Committee meeting attended | ||
Savannah Electric | ||
Annual Cash Retainer Fee | $12,000 | |
Quarterly Stock Retainer Fee | 85 shares of Southern Company common stock | |
Meeting Fees | $1,200 for each Board meeting attended and | |
$1,000 for each Committee meeting attended |
III-15
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• | lump sum payment of two or three times annual compensation, | |
• | up to five years’ coverage under group health and life insurance plans, | |
• | immediate vesting of all stock options, stock appreciation rights and restricted stock previously granted, | |
• | payment of any accrued long-term and short-term bonuses and dividend equivalents and | |
• | payment of any excise tax liability incurred as a result of payments made under any individual agreements. |
• | acquisition of at least 20 percent of the Southern Company’s stock, | |
• | a change in the majority of the members of the Southern Company’s board of directors in connection with an actual or threatened change in control, | |
• | a merger or other business combination that results in Southern Company’s shareholders immediately before the merger owning less than 65 percent of the voting power after the merger or | |
• | a sale of substantially all the assets of Southern Company. |
• | acquisition of at least 50 percent of that Company’s stock, | |
• | a merger or other business combination unless Southern Company controls the surviving entity or | |
• | a sale of substantially all the assets of that Company. |
III- 16
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III- 17
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Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Amount and | ||||||||||||
Name and Address | Nature of | Percent | ||||||||||
of Beneficial | Beneficial | of | ||||||||||
Title of Class | Owner | Ownership | Class | |||||||||
Common Stock | The Southern Company | 100 | % | |||||||||
30 Ivan Allen Jr. Boulevard, N.W. | ||||||||||||
Atlanta, Georgia 30308 | ||||||||||||
Registrants: | ||||||||||||
�� | Georgia Power | 7,761,500 | ||||||||||
Gulf Power | 992,717 | |||||||||||
Savannah Electric | 10,844,635 |
Shares Beneficially | ||||||||||||
Owned Include: | ||||||||||||
Name of Directors, | Shares | Shares Individuals | ||||||||||
Nominees and | Beneficially | Have Rights to Acquire | ||||||||||
Executive Officers | Title of Class | Owned (1) | Within 60 days(2) | |||||||||
Georgia Power | ||||||||||||
Michael D. Garrett | Southern Company Common | 99,585 | 98,116 | |||||||||
Gus H. Bell, III | Southern Company Common | 1,409 | ||||||||||
Robert L. Brown | Southern Company Common | 4,290 | ||||||||||
Ronald D. Brown | Southern Company Common | 470 | ||||||||||
Anna R. Cablik | Southern Company Common | 2,874 | ||||||||||
David M. Ratcliffe | Southern Company Common | 611,615 | 596,499 | |||||||||
D. Gary Thompson | Southern Company Common | 12,992 | ||||||||||
Richard Ussery | Southern Company Common | 28,798 | ||||||||||
William J. Vereen | Southern Company Common | 9,011 | ||||||||||
E. Jenner Wood, III | Southern Company Common | 4,476 | ||||||||||
William C. Archer | Southern Company Common | 140,259 | 138,851 | |||||||||
Mickey A. Brown | Southern Company Common | 72,746 | 59,432 | |||||||||
James H. Miller, III | Southern Company Common | 134,410 | 129,445 | |||||||||
Christopher C. Womack | Southern Company Common | 137,788 | 136,558 | |||||||||
Directors, Nominees and Executive Officers as a group (20 people) | Southern Company Common | 1,580,936 | 1,449,963 |
III- 18
Table of Contents
Shares Beneficially | ||||||||||||
Owned Include: | ||||||||||||
Name of Directors, | Shares | Shares Individuals | ||||||||||
Nominees and | Beneficially | Have Rights to Acquire | ||||||||||
Executive Officers | Title of Class | Owned (1) | Within 60 days(2) | |||||||||
Gulf Power | ||||||||||||
Susan N. Story | Southern Company Common | 57,924 | 53,046 | |||||||||
C. LeDon Anchors | Southern Company Common | 3,645 | ||||||||||
William C. Cramer, Jr. | Southern Company Common | 3,877 | ||||||||||
Fred C. Donovan, Sr. | Southern Company Common | 2,140 | ||||||||||
William A. Pullman | Southern Company Common | 4,886 | ||||||||||
Winston E. Scott | Southern Company Common | 1,810 | ||||||||||
Francis M. Fisher, Jr. | Southern Company Common | 77,126 | 73,833 | |||||||||
P. Bernard Jacob | Southern Company Common | 14,646 | 11,660 | |||||||||
Ronnie R. Labrato | Southern Company Common | 41,008 | 37,563 | |||||||||
Penny M. Manuel | Southern Company Common | 19,157 | 18,344 | |||||||||
Directors, Nominees and Executive Officers as a group (10 people) | Southern Company Common | 226,219 | 194,446 |
Shares Beneficially | ||||||||||||
Owned Include: | ||||||||||||
Name of Directors, | Shares | Shares Individuals | ||||||||||
Nominees and | Beneficially | Have Rights to Acquire | ||||||||||
Executive Officers | Title of Class | Owned (1) | Within 60 days(2) | |||||||||
Savannah Electric | ||||||||||||
W. Craig Barrs | Southern Company Common | 33,252 | 27,446 | |||||||||
Gus H. Bell, III | Southern Company Common | 1,409 | ||||||||||
Archie H. Davis | Southern Company Common | 1,878 | ||||||||||
Robert B. Miller, III | Southern Company Common | 3,310 | ||||||||||
Arnold M. Tenenbaum | Southern Company Common | 2,429 | ||||||||||
W. Miles Greer | Southern Company Common | 45,953 | 39,219 | |||||||||
Kirby R. Willis | Southern Company Common | 41,835 | 36,044 | |||||||||
Directors, Nominees and Executive Officers as a group (7 people) | Southern Company Common | 130,066 | 102,709 |
(1) | As used in the tables, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security and/or investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). For Robert B. Miller, III, this amount includes 1,850 shares held jointly with the estate of Robert B. Miller Jr. and Jean Miller. | |
(2) | Indicates shares of Southern Company common stock that directors and executive officers have the right to acquire within 60 days. |
III-19
Table of Contents
III- 20
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III- 21
Table of Contents
2005 | 2004 | |||||||
(in thousands) | ||||||||
Georgia Power | ||||||||
Audit Fees (1) | $ | 3,128 | $ | 2,869 | ||||
Audit-Related Fees (2) | 8 | 41 | ||||||
Tax Fees | 0 | 0 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 3,136 | $ | 2,910 | ||||
Gulf Power | ||||||||
Audit Fees (1) | $ | 960 | $ | 897 | ||||
Audit-Related Fees | 0 | 0 | ||||||
Tax Fees | 0 | 0 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 960 | $ | 897 | ||||
Savannah Electric | ||||||||
Audit Fees (1) | $ | 660 | $ | 774 | ||||
Audit-Related Fees | 0 | 0 | ||||||
Tax Fees | 0 | 0 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 660 | $ | 774 | ||||
Southern Power | ||||||||
Audit Fees | $ | 817 | $ | 648 | ||||
Audit-Related Fees | 0 | 0 | ||||||
Tax Fees | 0 | 0 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 817 | $ | 648 | ||||
(1) | Includes services performed in connection with financing transactions. | |
(2) | Includes benefit plan and other non-statutory audit services and accounting consultations in 2005 and 2004. |
III- 22
Table of Contents
(a) | The following documents are filed as a part of this report on this Form 10-K: |
(1) | Financial Statements: | ||
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Statements for Southern Company and Subsidiary Companies is listed under Item 8 herein. | |||
Reports of Independent Registered Public Accounting Firm on the financial statements for Southern Company and Subsidiary Companies, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Southern Power are listed under Item 8 herein. | |||
The financial statements filed as a part of this report for Southern Company and Subsidiary Companies, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Southern Power are listed under Item 8 herein. |
(2) | Financial Statement Schedules: | ||
Reports of Independent Registered Public Accounting Firm as to Schedules for Southern Company and Subsidiary Companies, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Southern Power are included herein on pages IV-9, IV-10, IV-11, IV-12, IV-13, IV-14 and IV-15. | |||
Financial Statement Schedules for Southern Company and Subsidiary Companies, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Southern Power are listed in the Index to the Financial Statement Schedules at page S-1. |
(3) | Exhibits: | ||
Exhibits for Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Southern Power are listed in the Exhibit Index at page E-1. |
IV-1
Table of Contents
THE SOUTHERN COMPANY | |||||
By: | David M. Ratcliffe | ||||
Chairman, President and | |||||
Chief Executive Officer | |||||
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date: | February 27, 2006 |
Chairman, President,
Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Comptroller and Chief Accounting Officer
(Principal Accounting Officer)
Dorrit J. Bern J. Neal Purcell
Francis S. Blake William G. Smith, Jr.
Thomas F. Chapman Gerald J. St. Pe’
Donald M. James
IV-2
Table of Contents
ALABAMA POWER COMPANY | ||||||
By: | Charles D. McCrary | |||||
President and Chief Executive Officer | ||||||
By: | /s/ Wayne Boston | |||||
(Wayne Boston, Attorney-in-fact) | ||||||
Date: | February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Vice President and Comptroller
(Principal Accounting Officer)
Whit Armstrong | Malcolm Portera | |||||
David J. Cooper, Sr. | Robert D. Powers | |||||
R. Kent Henslee | David M. Ratcliffe | |||||
John D. Johns | C. Dowd Ritter | |||||
Carl E. Jones, Jr. | James H. Sanford | |||||
Patricia M. King | John Cox Webb, IV | |||||
Wallace D. Malone, Jr. | James W. Wright |
IV-3
Table of Contents
GEORGIA POWER COMPANY | ||||||
By: | Michael D. Garrett | |||||
President and Chief Executive Officer | ||||||
By: | /s/ Wayne Boston | |||||
(Wayne Boston, Attorney-in-fact) | ||||||
Date: | February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President, Chief Financial Officer
and Treasurer
(Principal Financial Officer)
Vice President, Comptroller and Chief Accounting Officer
(Principal Accounting Officer)
Ronald D. Brown Richard W. Ussery
Anna R. Cablik William Jerry Vereen
David M. Ratcliffe E. Jenner Wood, III
IV-4
Table of Contents
GULF POWER COMPANY | |||||
By: | Susan N. Story | ||||
President and Chief Executive Officer | |||||
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date:February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
William C. Cramer, Jr. Winston E. Scott
Fred C. Donovan, Sr.
IV-5
Table of Contents
MISSISSIPPI POWER COMPANY | |||||
By: | Anthony J. Topazi | ||||
President and Chief Executive Officer | |||||
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date:February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
Comptroller
(Principal Accounting Officer)
Warren A. Hood, Jr. George A. Schloegel
Robert C. Khayat Philip J. Terrell
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date:February 27, 2006 |
IV-6
Table of Contents
SAVANNAH ELECTRIC AND POWER COMPANY | ||||||
By: | W. Craig Barrs | |||||
President and Chief Executive Officer | ||||||
By: | /s/ Wayne Boston | |||||
(Wayne Boston, Attorney-in-fact) | ||||||
Date:February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Vice President, Treasurer, Chief Financial
Officer and Assistant Corporate Secretary
(Principal Financial and Accounting Officer)
Archie H. Davis Arnold M. Tenenbaum
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date: | February 27, 2006 |
IV-7
Table of Contents
SOUTHERN POWER COMPANY | ||||||
By: | Ronnie L. Bates | |||||
President and Chief Executive Officer | ||||||
By: | /s/ Wayne Boston | |||||
(Wayne Boston, Attorney-in-fact) | ||||||
Date:February 27, 2006 |
President, Chief Executive Officer and Director
(Principal Executive Officer)
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Thomas A. Fanning David M. Ratcliffe
By: | /s/ Wayne Boston | ||||
(Wayne Boston, Attorney-in-fact) | |||||
Date: | February 27, 2006 |
IV-8
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-9
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-10
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-11
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-12
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-13
Table of Contents
Atlanta, Georgia
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-14
Table of Contents
February 27, 2006
Member of | ||
Deloitte Touche Tohmatsu |
IV-15
Table of Contents
Schedule | Page | |||||||
II | ||||||||
S-2 | ||||||||
S-3 | ||||||||
S-4 | ||||||||
S-5 | ||||||||
S-6 | ||||||||
S-7 | ||||||||
S-8 |
S-1
Table of Contents
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts (a) | ||||||||||||||||||||
2005 | $ | 33,399 | $ | 46,193 | $ | 24 | $ | 42,106 | (b) | $ | 37,510 | |||||||||
2004 | 15,812 | 54,248 | 2 | 36,663 | (b) | 33,399 | ||||||||||||||
2003 | 19,015 | 37,491 | 1,386 | 42,080 | (b) | 15,812 |
(a) | Excludes provisions for uncollectible accounts in all periods for Southern Company Gas — a discontinued operation. | |
(b) | Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 5,404 | $ | 12,832 | $ | — | $10,676 (Note) | $ | 7,560 | |||||||||||
2004 | 4,756 | 10,346 | — | 9,698 (Note) | 5,404 | |||||||||||||||
2003 | 4,827 | 13,444 | — | 13,515 (Note) | 4,756 |
Note: | Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 7,100 | $ | 24,145 | $ | — | $22,598 (Note) | $ | 8,647 | |||||||||||
2004 | 5,350 | 20,461 | — | 18,711 (Note) | 7,100 | |||||||||||||||
2003 | 5,825 | 15,577 | — | 16,052 (Note) | 5,350 |
Note: | Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 2,144 | $ | 1,275 | $ | — | $2,285 (Note) | $ | 1,134 | |||||||||||
2004 | 947 | 2,851 | — | 1,654 (Note) | 2,144 | |||||||||||||||
2003 | 889 | 2,122 | — | 2,064 (Note) | 947 |
Note: | Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 774 | $ | 2,610 | $ | — | $1,063 (Note) | $ | 2,321 | |||||||||||
2004 | 897 | 1,338 | — | 1,461 (Note) | 774 | |||||||||||||||
2003 | 718 | 1,947 | 135 | 1,903 (Note) | �� | 897 |
Note: | Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 878 | $ | 1,449 | $ | — | $1,411 (Note) | $ | 916 | |||||||||||
2004 | 817 | 930 | — | 869 (Note) | 878 | |||||||||||||||
2003 | 902 | 828 | — | 913 (Note) | 817 |
Note: | Represents write-off of accounts receivable considered to be uncollectible, less recoveries of amounts previously written off. |
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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Stated in Thousands of Dollars)
Additions | ||||||||||||||||||||
Balance at Beginning | Charged to | Charged to Other | Balance at End | |||||||||||||||||
Description | of Period | Income | Accounts | Deductions | of Period | |||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
2005 | $ | 350 | $ | — | $ | — | $350 (Note) | $ | — | |||||||||||
2004 | 350 | — | — | — | 350 | |||||||||||||||
2003 | 350 | — | — | — | 350 |
Note: | Represents write-off of accounts receivable considered to be uncollectible, less recoveries of amounts previously written off. |
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(f) 1 | - | Agreement and Plan of Merger dated December 13, 2005, between Georgia Power and Savannah Electric. (Designated in Form 8-K dated December 13, 2005, File No. 1-5072, as Exhibit 2.1.) |
(a) 1 | - | Composite Certificate of Incorporation of Southern Company, reflecting all amendments thereto through January 5, 1994. (Designated in Registration No. 33-3546 as Exhibit 4(a), in Certificate of Notification, File No. 70-7341, as Exhibit A and in Certificate of Notification, File No. 70-8181, as Exhibit A.) | ||||
(a) 2 | - | By-laws of Southern Company as amended effective February 17, 2003, and as presently in effect. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2003, File No. 1-3526, as Exhibit 3(a)1.) |
(b) 1 | - | Charter of Alabama Power and amendments thereto through February 17, 2004. (Designated in Registration Nos. 2-59634 as Exhibit 2(b), 2-60209 as Exhibit 2(c), 2-60484 as Exhibit 2(b), 2-70838 as Exhibit 4(a)-2, 2-85987 as Exhibit 4(a)-2, 33-25539 as Exhibit 4(a)-2, 33-43917 as Exhibit 4(a)-2, in Form 8-K dated February 5, 1992, File No. 1-3164, as Exhibit 4(b)-3, in Form 8-K dated July 8, 1992, File No. 1-3164, as Exhibit 4(b)-3, in Form 8-K dated October 27, 1993, File No. 1-3164, as Exhibits 4(a) and 4(b), in Form 8-K dated November 16, 1993, File No. 1-3164, as Exhibit 4(a), in Certificate of Notification, File No. 70-8191, as Exhibit A, in Alabama Power’s Form 10-K for the year ended December 31, 1997, File No. 1-3164, as Exhibit 3(b)2, in Form 8-K dated August 10, 1998, File No. 1-3164, as Exhibit 4.4, in Alabama Power’s Form 10-K for the year ended December 31, 2000, File No. 1-3164, as Exhibit 3(b)2, in Alabama Power’s Form 10-K for the year ended December 31, 2001, File No. 1-3164, as Exhibit 3(b)2, in Form 8-K dated February 5, 2003, File No. 1-3164, as Exhibit 4.4, in Alabama Power’s Form 10-Q for the quarter ended March 31, 2003, File No 1-3164, as Exhibit 3(b)1 and in Form 8-K dated February 5, 2004, File No. 1-3164 as Exhibit 4.4.) | ||||
(b) 2 | - | By-laws of Alabama Power as amended effective April 25, 2003, and as presently in effect. (Designated in Alabama Power’s Form 10-Q for the quarter ended March 31, 2003, File No 1-3164, as Exhibit 3(b)2.) |
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(c) 1 | - | Charter of Georgia Power and amendments thereto through January 16, 2001. (Designated in Registration Nos. 2-63392 as Exhibit 2(a)-2, 2-78913 as Exhibits 4(a)-(2) and 4(a)-(3), 2-93039 as Exhibit 4(a)-(2), 2-96810 as Exhibit 4(a)-2, 33-141 as Exhibit 4(a)-(2), 33-1359 as Exhibit 4(a)(2), 33-5405 as Exhibit 4(b)(2), 33-14367 as Exhibits 4(b)-(2) and 4(b)-(3), 33-22504 as Exhibits 4(b)-(2), 4(b)-(3) and 4(b)-(4), in Georgia Power’s Form 10-K for the year ended December 31, 1991, File No. 1-6468, as Exhibits 4(a)(2) and 4(a)(3), in Registration No. 33-48895 as Exhibits 4(b)-(2) and 4(b)-(3), in Form 8-K dated December 10, 1992, File No. 1-6468 as Exhibit 4(b), in Form 8-K dated June 17, 1993, File No. 1-6468, as Exhibit 4(b), in Form 8-K dated October 20, 1993, File No. 1-6468, as Exhibit 4(b), in Georgia Power’s Form 10-K for the year ended December 31, 1997, File No. 1-6468, as Exhibit 3(c)2 and in Georgia Power’s Form 10-K for the year ended December 31, 2000, File No. 1-6468, as Exhibit 3(c)2.) | ||||
(c) 2 | - | By-laws of Georgia Power as amended effective August 17, 2005, and as presently in effect. (Designated in Form 8-K dated August 17, 2005, File No. 1-6468, as Exhibit 3(c)2.) |
(d) 1 | - | Amended and Restated Articles of Incorporation of Gulf Power and amendments thereto through November 16, 2005. (Designated in Form 8-K dated October 27, 2005, File No. 0-2429, as Exhibit 3.1 and in Form 8-K dated November 9, 2005, File No. 0-2429, as Exhibit 4.7.) | ||||
(d) 2 | - | By-laws of Gulf Power as amended effective November 2, 2005, and as presently in effect. (Designated in Form 8-K dated November 2, 2005, File No. 0-2429, as Exhibit 3.2.) |
(e) 1 | - | Articles of Incorporation of Mississippi Power, articles of merger of Mississippi Power Company (a Maine corporation) into Mississippi Power and articles of amendment to the articles of incorporation of Mississippi Power through April 2, 2004. (Designated in Registration No. 2-71540 as Exhibit 4(a)-1, in Form U5S for 1987, File No. 30-222-2, as Exhibit B-10, in Registration No. 33-49320 as Exhibit 4(b)-(1), in Form 8-K dated August 5, 1992, File No. 0-6849, as Exhibits 4(b)-2 and 4(b)-3, in Form 8-K dated August 4, 1993, File No. 0-6849, as Exhibit 4(b)-3, in Form 8-K dated August 18, 1993, File No. 0-6849, as Exhibit 4(b)-3, in Mississippi Power’s Form 10-K for the year ended December 31, 1997, File No. 0-6849, as Exhibit 3(e)2, in Mississippi Power’s Form 10-K for the year ended December 31, 2000, File No. 0-6849, as Exhibit 3(e)2 and in Mississippi Power’s Form 8-K dated March 3, 2004, File No. 0-6849, as Exhibit 4.6.) |
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(e) 2 | - | By-laws of Mississippi Power as amended effective February 28, 2001, and as presently in effect. (Designated in Mississippi Power’s Form 10-K for the year ended December 31, 2001, File No. 0-6849, as Exhibit 3(e)2.) |
(f) 1 | - | Charter of Savannah Electric and amendments thereto through June 10, 2004. (Designated in Registration Nos. 33-25183 as Exhibit 4(b)-(1), 33-45757 as Exhibit 4(b)-(2), in Form 8-K dated November 9, 1993, File No. 1-5072, as Exhibit 4(b) in Savannah Electric’s Form 10-K for the year ended December 31, 1998, as Exhibit 3(f)2 and in Form 8-K dated May 27, 2004, File No. 1-5072, as Exhibits 4.6 and 4.7.) | ||||
(f) 2 | - | By-laws of Savannah Electric as amended effective May 17, 2000, and as presently in effect. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072, as Exhibit 3(f)2.) |
(g) 1 | - | Certificate of Incorporation of Southern Power dated January 8, 2001. (Designated in Registration No. 333-98553 as Exhibit 3.1.) | ||||
(g) 2 | - | By-laws of Southern Power effective January 8, 2001. (Designated in Registration No. 333-98553 as Exhibit 3.2.) |
(a) 1 | - | Subordinated Note Indenture dated as of February 1, 1997, among Southern Company, Southern Company Capital Funding, Inc. and Bank of New York Trust Company, N.A., as Successor Trustee, and indentures supplemental thereto dated as of February 4, 1997. (Designated in Registration Nos. 333-28349 as Exhibits 4.1 and 4.2 and 333-28355 as Exhibit 4.2.) | ||||
(a) 2 | - | Subordinated Note Indenture dated as of June 1, 1997, among Southern Company, Southern Company Capital Funding, Inc. and Bank of New York Trust Company, N.A., as Successor Trustee, and indentures supplemental thereto through July 31, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 1997, File No. 1-3526, as Exhibit 4(a)2, in Form 8-K dated June 18, 1998, File No. 1-3526, as Exhibit 4.2, in Form 8-K dated December 18, 1998, File No. 1-3526, as Exhibit 4.4 and in Form 8-K dated July 24, 2002, File No. 1-3526, as Exhibit 4.4.) | ||||
(a) 3 | - | Senior Note Indenture dated as of February 1, 2002, among Southern Company, Southern Company Capital Funding, Inc. and The Bank of New York, as Trustee, and indentures supplemental thereto through November 16, 2005. (Designated in Form 8-K dated January 29, 2002, File No. 1-3526, as Exhibits 4.1 and 4.2, in |
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Form 8-K dated January 30, 2002, File No. 1-3526, as Exhibit 4.2 and in Form 8-K dated November 8, 2005, File No. 1-3526, as Exhibit 4.2.) | ||||||
(a) 4 | - | Amended and Restated Trust Agreement of Southern Company Capital Trust I dated as of February 1, 1997. (Designated in Registration No. 333-28349 as Exhibit 4.6.) | ||||
(a) 5 | - | Amended and Restated Trust Agreement of Southern Company Capital Trust II dated as of February 1, 1997. (Designated in Registration No. 333-28355 as Exhibit 4.6.) | ||||
(a) 6 | - | Amended and Restated Trust Agreement of Southern Company Capital Trust VI dated as of July 1, 2002. (Designated in Form 8-K dated July 24, 2002, File No. 1-3526, as Exhibit 4.7-A.) | ||||
(a) 7 | - | Capital Securities Guarantee Agreement relating to Southern Company Capital Trust I dated as of February 1, 1997. (Designated in Registration No. 333-28349 as Exhibit 4.10.) | ||||
(a) 8 | - | Capital Securities Guarantee Agreement relating to Southern Company Capital Trust II dated as of February 1, 1997. (Designated in Registration No. 333-28355 as Exhibit 4.10.) | ||||
(a) 9 | - | Preferred Securities Guarantee Agreement relating to Southern Company Capital Trust VI dated as of July 1, 2002. (Designated in Form 8-K dated July 24, 2002, File No. 1-3526, as Exhibit 4.11-A.) |
(b) 1 | - | Indenture dated as of January 1, 1942, between Alabama Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through December 1, 1994. (Designated in Registration Nos. 2-59843 as Exhibit 2(a)-2, 2-60484 as Exhibits 2(a)-3 and 2(a)-4, 2-60716 as Exhibit 2(c), 2-67574 as Exhibit 2(c), 2-68687 as Exhibit 2(c), 2-69599 as Exhibit 4(a)-2, 2-71364 as Exhibit 4(a)-2, 2-73727 as Exhibit 4(a)-2, 33-5079 as Exhibit 4(a)-2, 33-17083 as Exhibit 4(a)-2, 33-22090 as Exhibit 4(a)-2, in Alabama Power’s Form 10-K for the year ended December 31, 1990, File No. 1-3164, as Exhibit 4(c), in Registration Nos. 33-43917 as Exhibit 4(a)-2, 33-45492 as Exhibit 4(a)-2, 33-48885 as Exhibit 4(a)-2, 33-48917 as Exhibit 4(a)-2, in Form 8-K dated January 20, 1993, File No. 1-3164, as Exhibit 4(a)-3, in Form 8-K dated February 17, 1993, File No. 1-3164, as Exhibit 4(a)-3, in Form 8-K dated March 10, 1993, File No. 1-3164, as Exhibit 4(a)-3, in Certificate of Notification, File No. 70-8069, as Exhibits A and B, in Form 8-K dated June 24, 1993, File No. 1-3164, as Exhibit 4, in Certificate of Notification, File No. 70-8069, as Exhibit A, in Form 8-K dated November 16, 1993, File No. 1-3164, as Exhibit 4(b), in Certificate of Notification, File No. 70-8069, as Exhibits A and B, in Certificate of Notification, File No. 70-8069, as Exhibit A, in Certificate of Notification, File No. 70-8069, as Exhibit A and in Form 8-K dated November 30, 1994, File No. 1-3164, as Exhibit 4.) |
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(b) 2 | - | Subordinated Note Indenture dated as of January 1, 1997, between Alabama Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through October 2, 2002. (Designated in Form 8-K dated January 9, 1997, File No. 1-3164, as Exhibits 4.1 and 4.2, in Form 8-K dated February 18, 1999, File No. 3164, as Exhibit 4.2 and in Form 8-K dated September 26, 2002, File No. 3164, as Exhibits 4.9-A and 4.9-B.) | ||||
(b) 3 | - | Senior Note Indenture dated as of December 1, 1997, between Alabama Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through February 8, 2006. (Designated in Form 8-K dated December 4, 1997, File No. 1-3164, as Exhibits 4.1 and 4.2, in Form 8-K dated February 20, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated April 17, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 11, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated September 8, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated September 16, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated October 7, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated October 28, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated November 12, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated May 19, 1999, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 13, 1999, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated September 21, 1999, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated May 11, 2000, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 22, 2001, File No. 1-3164, as Exhibits 4.2(a) and 4.2(b), in Form 8-K dated June 21, 2002, File No. 1-3164, as Exhibit 4.2(a), in Form 8-K dated October 16, 2002, File No. 1-3164, as Exhibit 4.2(a), in Form 8-K dated November 20, 2002, File No. 1-3164, as Exhibit 4.2(a), in Form 8-K dated December 6, 2002, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated February 11, 2003, File No. 1-3164, as Exhibits 4.2(a) and 4.2(b), in Form 8-K dated March 12, 2003, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated April 15, 2003, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated May 1, 2003, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated November 14, 2003, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated February 10, 2004, File No. 1-3164, as Exhibit 4.2 in Form 8-K dated April 7, 2004, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 19, 2004, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated November 9, 2004, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated March 8, 2005, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated January 11, 2006, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated January 13, 2006, File No. 1-3164, as Exhibit 4.2 and in Form 8-K dated February 1, 2006, File No. 1-3164, as Exhibits 4.2(a) and 4.2(b).) | ||||
(b) 4 | - | Amended and Restated Trust Agreement of Alabama Power Capital Trust IV dated as of September 1, 2002. (Designated in Form 8-K dated September 26, 2002, File No. 1-3164, as Exhibit 4.12-A.) | ||||
(b) 5 | - | Amended and Restated Trust Agreement of Alabama Power Capital Trust V dated as of September 1, 2002. (Designated in Form 8-K dated September 26, 2002, File No. 1-3164, as Exhibit 4.12-B.) | ||||
(b) 6 | - | Guarantee Agreement relating to Alabama Power Capital Trust IV dated as of September 1, 2002. (Designated in Form 8-K dated September 26, 2002, File No. 1-3164, as Exhibit 4.16-A.) |
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(b) 7 | - | Guarantee Agreement relating to Alabama Power Capital Trust V dated as of September 1, 2002. (Designated in Form 8-K dated September 26, 2002, File No. 1-3164, as Exhibit 4.16-B.) |
(c) 1 | - | Subordinated Note Indenture dated as of June 1, 1997, between Georgia Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through January 23, 2004. (Designated in Certificate of Notification, File No. 70-8461, as Exhibits D and E, in Form 8-K dated February 17, 1999, File No. 1-6468, as Exhibit 4.4, in Form 8-K dated June 13, 2002, File No. 1-6468, as Exhibit 4.4, in Form 8-K dated October 30, 2002, File No. 1-6468, as Exhibit 4.4 and in Form 8-K dated January 15, 2004, File No. 1-6468, as Exhibit 4.4. | ||||
(c) 2 | - | Senior Note Indenture dated as of January 1, 1998, between Georgia Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through December 6, 2005. (Designated in Form 8-K dated January 21, 1998, File No. 1-6468, as Exhibits 4.1 and 4.2, in Forms 8-K each dated November 19, 1998, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated March 3, 1999, File No. 1-6469 as Exhibit 4.2, in Form 8-K dated February 15, 2000, File No. 1-6469 as Exhibit 4.2, in Form 8-K dated January 26, 2001, File No. 1-6469 as Exhibits 4.2(a) and 4.2(b), in Form 8-K dated February 16, 2001, File No. 1-6469 as Exhibit 4.2, in Form 8-K dated May 1, 2001, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated June 27, 2002, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated November 15, 2002, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated February 13, 2003, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated February 21, 2003, File No. 1-6468, as Exhibit 4.2, in Form 8-K dated April 10, 2003, File No. 1-6468, as Exhibits 4.1, 4.2 and 4.3, in Form 8-K dated September 8, 2003, File No. 1-6468, as Exhibit 4.1, in Form 8-K dated September 23, 2003, File No. 1-6468, as Exhibit 4.1, in Form 8-K dated January 12, 2004, File No. 1-6468, as Exhibits 4.1 and 4.2, in Form 8-K dated February 12, 2004, File No. 1-6468, as Exhibit 4.1, in Form 8-K dated August 11, 2004, File No. 1-6468, as Exhibits 4.1 and 4.2, in Form 8-K dated January 13, 2005, File No. 1-6468, as Exhibit 4.1, in Form 8-K dated April 12, 2005, File No. 1-6468, as Exhibit 4.1 and in Form 8-K dated November 30, 2005, File No. 1-6468, as Exhibit 4.1.) | ||||
(c) 3 | - | Amended and Restated Trust Agreement of Georgia Power Capital Trust V dated as of June 1, 2002. (Designated in Form 8-K dated June 13, 2002, as Exhibit 4.7-A.) | ||||
(c) 4 | - | Amended and Restated Trust Agreement of Georgia Power Capital Trust VI dated as of November 1, 2002. (Designated in Form 8-K dated October 30, 2002, as Exhibit 4.7-A.) | ||||
(c) 5 | - | Amended and Restated Trust Agreement of Georgia Power Capital Trust VII dated as of January 1, 2004. (Designated in Form 8-K dated January 15, 2004, as Exhibit 4.7-A.) |
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(c) 6 | - | Guarantee Agreement relating to Georgia Power Capital Trust V dated as of June 1, 2002. (Designated in Form 8-K dated June 13, 2002, as Exhibit 4.11-A.) | ||||
(c) 7 | - | Guarantee Agreement relating to Georgia Power Capital Trust VI dated as of November 1, 2002. (Designated in Form 8-K dated October 30, 2002, as Exhibit 4.11-A.) | ||||
(c) 8 | - | Guarantee Agreement relating to Georgia Power Capital Trust VII dated as of January 1, 2004. (Designated in Form 8-K dated January 15, 2004, as Exhibit 4.11-A.) |
(d) 1 | - | Indenture dated as of September 1, 1941, between Gulf Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through November 1, 1996. (Designated in Registration Nos. 2-4833 as Exhibit B-3, 2-62319 as Exhibit 2(a)-3, 2-63765 as Exhibit 2(a)-3, 2-66260 as Exhibit 2(a)-3, 33-2809 as Exhibit 4(a)-2, 33-43739 as Exhibit 4(a)-2, in Gulf Power’s Form 10-K for the year ended December 31, 1991, File No. 0-2429, as Exhibit 4(b), in Form 8-K dated August 18, 1992, File No. 0-2429, as Exhibit 4(a)-3, in Registration No. 33-50165 as Exhibit 4(a)-2, in Form 8-K dated July 12, 1993, File No. 0-2429, as Exhibit 4, in Certificate of Notification, File No. 70-8229, as Exhibit A, in Certificate of Notification, File No. 70-8229, as Exhibits E and F, in Form 8-K dated January 17, 1996, File No. 0-2429, as Exhibit 4, in Certificate of Notification, File No. 70-8229, as Exhibit A, in Certificate of Notification, File No. 70-8229, as Exhibit A and in Form 8-K dated November 6, 1996, File No. 0-2429, as Exhibit 4.) | ||||
(d) 2 | - | Subordinated Note Indenture dated as of January 1, 1997, between Gulf Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through December 13, 2002. (Designated in Form 8-K dated January 27, 1997, File No. 0-2429, as Exhibits 4.1 and 4.2, in Form 8-K dated July 28, 1997, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated January 13, 1998, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated November 8, 2001, File No. 0-2429, as Exhibit 4.2 and in Form 8-K dated December 5, 2002, File No. 0-2429, as Exhibit 4.2.) | ||||
(d) 3 | - | Senior Note Indenture dated as of January 1, 1998, between Gulf Power and JPMorgan Chase Bank, N.A. (formerly The Chase Manhattan Bank), as Trustee, and indentures supplemental thereto through August 30, 2005. (Designated in Form 8-K dated June 17, 1998, File No. 0-2429, as Exhibits 4.1 and 4.2, in Form 8-K dated August 17, 1999, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated July 31, 2001, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated October 5, 2001, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated January 18, 2002, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated March 21, 2003, File No. 0-2429, as Exhibit 4.2, in Form 8-K dated July 10, 2003, File No. 0-2429, as Exhibits 4.1 and 4.2, in Form 8-K dated September 5, 2003, File No. 0-2429, as Exhibit 4.1, in Form 8-K dated April 6, 2004, File No. 0-2429, as Exhibit 4.1, in Form 8-K dated September 13, 2004, File No. 0-2429, as Exhibit 4.1, in Form 8-K dated August 11, 2005, File No. 0-2429, as Exhibit 4.1 and in Form 8-K dated October 27, 2005, File No. 0-2429, as Exhibit 4.1.) |
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(d) 4 | - | Amended and Restated Trust Agreement of Gulf Power Capital Trust III dated as of November 1, 2001. (Designated in Form 8-K dated November 8, 2001, File No. 0-2429, as Exhibit 4.5.) | ||||
(d) 5 | - | Amended and Restated Trust Agreement of Gulf Power Capital Trust IV dated as of December 1, 2002. (Designated in Form 8-K dated December 5, 2002, File No. 0-2429, as Exhibit 4.5.) | ||||
(d) 6 | - | Guarantee Agreement relating to Gulf Power Capital Trust III dated as of November 1, 2001. (Designated in Form 8-K dated November 8, 1998, File No. 0-2429, as Exhibit 4.8.) | ||||
(d) 7 | - | Guarantee Agreement relating to Gulf Power Capital Trust IV dated as of December 1, 2002. (Designated in Form 8-K dated December 5, 2002, File No. 0-2429, as Exhibit 4.8.) |
(e) 1 | - | Indenture dated as of September 1, 1941, between Mississippi Power and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Successor Trustee, and indentures supplemental thereto through June 30, 2005. (Designated in Registration Nos. 2-4834 as Exhibit B-3, 2-62965 as Exhibit 2(b)-2, 2-66845 as Exhibit 2(b)-2, 2-71537 as Exhibit 4(a)-(2), 33-5414 as Exhibit 4(a)-(2), 33-39833 as Exhibit 4(a)-2, in Mississippi Power’s Form 10-K for the year ended December 31, 1991, File No. 0-6849, as Exhibit 4(b), in Form 8-K dated August 5, 1992, File No. 0-6849, as Exhibit 4(a)-2, in Second Certificate of Notification, File No. 70-7941, as Exhibit I, in Mississippi Power’s Form 8-K dated February 26, 1993, File No. 0-6849, as Exhibit 4(a)-2, in Certificate of Notification, File No. 70-8127, as Exhibit A, in Form 8-K dated June 22, 1993, File No. 0-6849, as Exhibit 1, in Certificate of Notification, File No. 70-8127, as Exhibit A, in Form 8-K dated March 8, 1994, File No. 0-6849, as Exhibit 4, in Certificate of Notification, File No. 70-8127, as Exhibit C, in Form 8-K dated December 5, 1995, File No. 0-6849, as Exhibit 4 and in Form 8-K dated June 24, 2005, File No. 001-11229, as Exhibit 4.16.) | ||||
(e) 2 | - | Senior Note Indenture dated as of May 1, 1998 between Mississippi Power and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee, and indentures supplemental thereto through June 30, 2005. (Designated in Form 8-K dated May 14, 1998, File No. 0-6849, as Exhibits 4.1, 4.2(a) and 4.2(b), in Form 8-K dated March 22, 2000, File No. 0-6849, as Exhibit 4.2, in Form 8-K dated March 12, 2002, File No. 0-6849, as Exhibit 4.2, in Form 8-K dated April 24, 2003, File No. 001-11229, as Exhibit 4.2, in Form 8-K dated March 3, 2004, File No. 001-11229, as Exhibit 4.2 and in Form 8-K dated June 24, 2005, File No. 001-11229, as Exhibit 4.2.) | ||||
(e) 3 | - | Subordinated Note Indenture dated as of February 1, 1997, between Mississippi Power and Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), as Trustee, and indenture supplemental thereto dated as of March 22, 2002. (Designated in Form 8-K dated February 20, 1997, File No. 0-6849, as |
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Exhibits 4.1 and 4.2 and in Form 8-K dated March 15, 2002, File No. 0-6849, as Exhibit 4.5.) | ||||||
(e) 4 | - | Amended and Restated Trust Agreement of Mississippi Power Capital Trust II dated as of March 1, 2002. (Designated in Form 8-K dated March 15, 2002, File No. 0-6849, as Exhibit 4.5.) | ||||
(e) 5 | - | Guarantee Agreement relating to Mississippi Power Capital Trust II dated as of March 1, 2002. (Designated in Form 8-K dated March 15, 2002, File No. 0-6849, as Exhibit 4.8.) |
(f) 1 | - | Indenture dated as of March 1, 1945, between Savannah Electric and The Bank of New York, as Trustee, and indentures supplemental thereto through May 1, 1996. (Designated in Registration Nos. 33-25183 as Exhibit 4(a)-(1), 33-41496 as Exhibit 4(a)-(2), 33-45757 as Exhibit 4(a)-(2), in Savannah Electric’s Form 10-K for the year ended December 31, 1991, File No. 1-5072, as Exhibit 4(b), in Form 8-K dated July 8, 1992, File No. 1-5072, as Exhibit 4(a)-3, in Registration No. 33-50587 as Exhibit 4(a)-(2), in Form 8-K dated July 22, 1993, File No. 1-5072, as Exhibit 4, in Form 8-K dated May 18, 1995, File No. 1-5072, as Exhibit 4 and in Form 8-K dated May 23, 1996, File No. 1-5072, as Exhibit 4.) | ||||
(f) 2 | - | Senior Note Indenture dated as of March 1, 1998 between Savannah Electric and The Bank of New York, as Trustee, and indentures supplemental thereto through December 9, 2004. (Designated in Form 8-K dated March 9, 1998, File No. 1-5072, as Exhibits 4.1 and 4.2, in Form 8-K dated May 8, 2001, File No. 1-5072, as Exhibits 4.2(a) and 4.2(b), in Form 8-K dated March 4, 2002, File No. 1-5072, as Exhibit 4.2, in Form 8-K dated November 4, 2002, File No. 1-5072, as Exhibit 4.2, in Form 8-K dated December 10, 2003, File No. 1-5072, as Exhibits 4.1 and 4.2 and in Form 8-K dated December 2, 2004, File No. 1-5072, as Exhibit 4.1.) | ||||
(f) 3 | - | Subordinated Note Indenture dated as of December 1, 1998, between Savannah Electric and The Bank of New York, as Trustee, and indenture supplemental thereto dated as of December 9, 1998. (Designated in Form 8-K dated December 3, 1998, File No. 1-5072, as Exhibit 4.3 and 4.4.) | ||||
(f) 4 | - | Amended and Restated Trust Agreement of Savannah Electric Capital Trust I dated as of December 1, 1998. (Designated in Form 8-K dated December 3, 1998, File No. 1-5072, as Exhibit 4.7.) | ||||
(f) 5 | - | Guarantee Agreement relating to Savannah Electric Capital Trust I dated as of December 1, 1998. (Designated in Form 8-K dated December 3, 1998, File No. 1-5072, as Exhibit 4.11.) |
(g) 1 | - | Indenture dated as of June 1, 2002, between Southern Power and The Bank of New York, as Trustee, and indentures supplemental thereto through July 8, 2003. (Designated in Registration No. 333-98553 as Exhibits 4.1 and 4.2 and in Southern |
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# | (a) | 1 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. (Designated in Form S-8, File No. 333-73462, as Exhibit 4(c).) | |||
# | * | (a) | 2 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. | ||
# | * | (a) | 3 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. | ||
# | (a) | 4 | - | Deferred Compensation Plan for Directors of The Southern Company, Amended and Restated effective February 19, 2001. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)59.) | |||
# | (a) | 5 | - | Southern Company Deferred Compensation Plan as amended and restated January 1, 2004. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)1.) | |||
# | (a) | 6 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)2.) | |||
# | (a) | 7 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2001, File No. 1-3526, as Exhibit 10(a)62.) | |||
# | (a) | 8 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)64 and in Southern Company’s Form 10-Q for the quarter ended September 30, 2003, File No. 1-3526, as Exhibit 10(a)3.) | |||
# | (a) | 9 | - | Amended and Restated Change in Control Agreement between Southern Company, SCS and G. Edison Holland, Jr. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2004, File No. 1-3526, as Exhibit 10(a)13.) | |||
# | (a) | 10 | - | Amended and Restated Change in Control Agreement between Southern Company, Alabama Power and Charles D. McCrary, effective June 1, 2004. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)5.) |
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# | (a) | 11 | - | Amended and Restated Change in Control Agreement between Southern Company, SCS and David M. Ratcliffe, effective June 1, 2004. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)3.) | ||||
# | (a) | 12 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2002, File No. 1-3526, as Exhibit 10(a)105.) | ||||
# | * | (a) | 13 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. | |||
# | (a) | 14 | - | Master Separation and Distribution Agreement dated as of September 1, 2000 between Southern Company and Mirant. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)100.) | ||||
# | (a) | 15 | - | Indemnification and Insurance Matters Agreement dated as of September 1, 2000 between Southern Company and Mirant. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)101.) | ||||
# | (a) | 16 | - | Tax Indemnification Agreement dated as of September 1, 2000 among Southern Company and its affiliated companies and Mirant and its affiliated companies. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)102.) | ||||
# | (a) | 17 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)103.) | ||||
# | (a) | 18 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)104.) | ||||
# | (a) | 19 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2001, File No. 1-3526, as Exhibit 10(a)92.) | ||||
# | (a) | 20 | - | Amended and Restated Change in Control Agreement between Southern Company, SCS and Thomas A. Fanning, effective June 1, 2004. (Designated in Southern |
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Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)4.) | ||||||||
# | (a) | 21 | - | Supplemental Pension Agreement between Savannah Electric, Gulf Power, SCS and G. Edison Holland, Jr. effective February 22, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2002, File No. 1-3526, as Exhibit 10(a)119.) | ||||
# | (a) | 22 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2003, File No. 1-3526, as Exhibit 10(a)3.) | ||||
# | (a) | 23 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2003, File No. 1-3526, as Exhibit 10(a)(2).) | ||||
# | (a) | 24 | - | Amended and Restated Change in Control Agreement between Southern Company, Georgia Power and Michael D. Garrett, effective June 1, 2004. (Designated in Southern Company’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(a)6.) | ||||
# | * | (a) | 25 | - | Base Salaries of Named Executive Officers. | |||
# | (a) | 26 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2004, File No. 1-3526, as Exhibit 10(a)30.) |
(b) | 1 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2000, File No. 1-3526, as Exhibit 10(a)6.) | |||||
# | (b) | 2 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. See Exhibit 10(a)1 herein. | ||||
# | * | (b) | 3 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. See Exhibit 10(a)2 herein. | |||
# | * | (b) | 4 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. See Exhibit 10(a)3 herein. | |||
# | (b) | 5 | - | Southern Company Deferred Compensation Plan as amended and restated January 1, 2004. See Exhibit 10(a)5 herein. | ||||
# | (b) | 6 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. See Exhibit 10(a)6 herein. |
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# | (b) | 7 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. See Exhibit 10(a)7 herein. | ||||
# | (b) | 8 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. See Exhibit 10(a)8 herein. | ||||
# | (b) | 9 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. See Exhibit 10(a)23 herein. | ||||
# | (b) | 10 | - | Deferred Compensation Plan for Directors of Alabama Power Company, Amended and Restated effective January 1, 2001. (Designated in Alabama Power’s Form 10-K for the year ended December 31, 2001, File No. 1-3164, as Exhibit 10(b)28.) | ||||
# | (b) | 11 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. See Exhibit 10(a)12 herein. | ||||
# | * | (b) | 12 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. See Exhibit 10(a)13 herein. | |||
# | (b) | 13 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. See Exhibit 10(a)17 herein. | ||||
# | (b) | 14 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)18 herein. | ||||
# | (b) | 15 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)19 herein. | ||||
# | (b) | 16 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. See Exhibit 10(a)22 herein. | ||||
# | (b) | 17 | - | Amended and Restated Change in Control Agreement between Southern Company, Alabama Power and Charles D. McCrary. See Exhibit 10(a)14 herein. | ||||
# | (b) | 18 | - | Amended and Restated Change in Control Agreement between Southern Company, Alabama Power and C. Alan Martin, effective June 1, 2004. (Designated in Alabama Power’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-3526, as Exhibit 10(b)4.) | ||||
# | * | (b) | 19 | - | Base Salaries of Named Executive Officers. |
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# | (b) | 20 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Alabama Power’s Form 10-K for the year ended December 31, 2004, File No. 1-3164, as Exhibit 10(b)20.) |
(c) | 1 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. See Exhibit 10(b)1 herein. | |||||||
(c) | 2 | - | Revised and Restated Integrated Transmission System Agreement dated as of November 12, 1990, between Georgia Power and OPC. (Designated in Georgia Power’s Form 10-K for the year ended December 31, 1990, File No. 1-6468, as Exhibit 10(g).) | |||||||
(c) | 3 | - | Revised and Restated Integrated Transmission System Agreement between Georgia Power and Dalton dated as of December 7, 1990. (Designated in Georgia Power’s Form 10-K for the year ended December 31, 1990, File No. 1-6468, as Exhibit 10(gg).) | |||||||
(c) | 4 | - | Revised and Restated Integrated Transmission System Agreement between Georgia Power and MEAG dated as of December 7, 1990. (Designated in Georgia Power’s Form 10-K for the year ended December 31, 1990, File No. 1-6468, as Exhibit 10(hh).) | |||||||
# | (c) | 5 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. See Exhibit 10(a)1 herein. | ||||||
# | * | (c) | 6 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. See Exhibit 10(a)2 herein. | |||||
# | * | (c) | 7 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. See Exhibit 10(a)3 herein. | |||||
# | (c) | 8 | - | Southern Company Deferred Compensation Plan as amended and restated effective January 1, 2004. See Exhibit 10(a)5 herein. | ||||||
# | (c) | 9 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. See Exhibit 10(a)6 herein. | ||||||
# | (c) | 10 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. See Exhibit 10(a)7 herein. | ||||||
# | (c) | 11 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. See Exhibit 10(a)8 herein. | ||||||
# | (c) | 12 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. See Exhibit 10(a)23 herein. |
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# | (c) | 13 | - | Deferred Compensation Plan For Directors of Georgia Power Company, Amended and Restated Effective January 13, 2003. (Designated in Georgia Power’s Form 10-K for the year ended December 31, 2002, File No. 1-6468, as Exhibit 10(c)68.) | ||||||
# | (c) | 14 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. See Exhibit 10(a)12 herein. | ||||||
# | * | (c) | 15 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. See Exhibit 10(a)13 herein. | |||||
# | (c) | 16 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. See Exhibit 10(a)17 herein. | ||||||
# | (c) | 17 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)18 herein. | ||||||
# | (c) | 18 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)19 herein. | ||||||
# | (c) | 19 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. See Exhibit 10(a)22 herein. | ||||||
# | (c) | 20 | - | Deferred Compensation Agreement between Southern Company, SCS and Christopher C. Womack dated May 31, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2002, File No. 1-3526, as Exhibit 10(a)118.) | ||||||
# | (c) | 21 | - | Amended and Restated Supplemental Pension Agreement among SCS, Southern Nuclear, Alabama Power and James H. Miller, III. (Designated in Alabama Power’s Form 10-Q for the quarter ended June 30, 2003, File No. 1-3164, as Exhibit 10(b)1.) | ||||||
# | (c) | 22 | - | Amended and Restated Change in Control Agreement between Southern Company, Georgia Power and Michael D. Garrett. See Exhibit 10(a)24 herein. | ||||||
# | (c) | 23 | - | Separation Agreement, dated as of January 4, 2006, between Georgia Power and William C. Archer III. (Designated in Form 8-K dated January 4, 2006, File No. 1-6468, as Exhibit 10.1.) | ||||||
# | (c) | 24 | - | Consulting Agreement, dated as of January 4, 2006, between Georgia Power and William C. Archer III. (Designated in Form 8-K dated January 4, 2006, File No. 1-6468, as Exhibit 10.2.) |
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# | * | (c) | 25 | - | Base Salaries of Named Executive Officers. | |||||
# | (c) | 26 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Georgia Power’s Form 10-K for the year ended December 31, 2004, File No. 1-6468, as Exhibit 10(c)24.) |
(d) | 1 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. See Exhibit 10(b)1 herein. | |||||||
(d) | 2 | - | Unit Power Sales Agreement dated July 19, 1988, between FPC and Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and SCS. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 1988, File No. 1-5072, as Exhibit 10(d).) | |||||||
(d) | 3 | - | Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and SCS. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 1988, File No. 1-5072, as Exhibit 10(e).) | |||||||
(d) | 4 | - | Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and SCS. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 1988, File No. 1-5072, as Exhibit 10(f).) | |||||||
# | (d) | 5 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. See Exhibit 10(a)1 herein. | ||||||
# | * | (d) | 6 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. See Exhibit 10(a)2 herein. | |||||
# | * | (d) | 7 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. See Exhibit 10(a)3 herein. | |||||
# | (d) | 8 | - | Southern Company Deferred Compensation Plan as amended and restated January 1, 2004. See Exhibit 10(a)5 herein. | ||||||
# | (d) | 9 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. See Exhibit 10(a)6 herein. | ||||||
# | (d) | 10 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. See Exhibit 10(a)8 herein. | ||||||
# | (d) | 11 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. See Exhibit 10(a)22 herein. |
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# | (d) | 12 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. See Exhibit 10(a)7 herein. | ||||||||||
# | (d) | 13 | - | Deferred Compensation Plan For Directors of Gulf Power Company, Amended and Restated effective January 1, 2000 and First Amendment thereto. (Designated in Gulf Power’s Form 10-K for the year ended December 31, 2000, File No. 0-2429 as Exhibit 10(d)33.) | ||||||||||
# | (d) | 14 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. See Exhibit 10(a)12 herein. | ||||||||||
# | * | (d) | 15 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. See Exhibit 10(a)13 herein. | |||||||||
# | (d) | 16 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. See Exhibit 10(a)17 herein. | ||||||||||
# | (d) | 17 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)18 herein. | ||||||||||
# | (d) | 18 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)19 herein. | ||||||||||
# | (d) | 19 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. See Exhibit 10(a)22 herein. | ||||||||||
# | * | (d) | 20 | - | Base Salaries of Named Executive Officers. | |||||||||
# | (d) | 21 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Gulf Power’s Form 10-K for the year ended December 31, 2004, File No. 0-2429, as Exhibit 10(d)20.) | ||||||||||
Mississippi Power | ||||||||||||||
(e) | 1 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. See Exhibit 10(b)1 herein. | |||||||||||
(e) | 2 | - | Transmission Facilities Agreement dated February 25, 1982, Amendment No. 1 dated May 12, 1982 and Amendment No. 2 dated December 6, 1983, between Entergy Corporation (formerly Gulf States) and Mississippi Power. (Designated in Mississippi Power’s Form 10-K for the year ended December 31, 1981, File No. |
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0-6849, as Exhibit 10(f), in Mississippi Power’s Form 10-K for the year ended December 31, 1982, File No. 0-6849, as Exhibit 10(f)(2) and in Mississippi Power’s Form 10-K for the year ended December 31, 1983, File No. 0-6849, as Exhibit 10(f)(3).) | ||||||||||
# | (e) | 3 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. See Exhibit 10(a)1 herein. | ||||||
# | * | (e) | 4 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. See Exhibit 10(a)2 herein. | |||||
# | * | (e) | 5 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. See Exhibit 10(a)3 herein. | |||||
# | (e) | 6 | - | Southern Company Deferred Compensation Plan as amended and restated January 1, 2004. See Exhibit 10(a)5 herein. | ||||||
# | (e) | 7 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. See Exhibit 10(a)6 herein. | ||||||
# | (e) | 8 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. See Exhibit 10(a)8 herein. | ||||||
# | (e) | 9 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. See Exhibit 10(a)23 herein. | ||||||
# | (e) | 10 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. See Exhibit 10(a)7 herein. | ||||||
# | (e) | 11 | - | Deferred Compensation Plan for Directors of Mississippi Power Company, Amended and Restated effective January 1, 2000 and Amendment Number One thereto. (Designated in Mississippi Power’s Form 10-K for the year ended December 31, 1999, File No. 0-6849 as Exhibit 10(e)37 and in Mississippi Power’s Form 10-K for the year December 31, 2000, File No. 0-6849 as Exhibit 10(e)30.) | ||||||
# | (e) | 12 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. See Exhibit 10(a)12 herein. | ||||||
# | * | (e) | 13 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. See Exhibit 10(a)13 herein. | |||||
# | (e) | 14 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. See Exhibit 10(a)17 herein. |
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# | (e) | 15 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)18 herein. | ||||
# | (e) | 16 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)19 herein. | ||||
# | (e) | 17 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. See Exhibit 10(a)22 herein. | ||||
# | * | (e) | 18 | - | Base Salaries of Named Executive Officers. | |||
# | (e) | 19 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Mississippi Power’s Form 10-K for the year ended December 31, 2004, File No. 001-11229, as Exhibit 10(e)20.) | ||||
(e) | 20 | - | Credit Agreement, dated as of October 20, 2005, by and among Mississippi Power and the lenders named therein. (Designated in Form 8-K dated October 20, 2005, File No. 001-11229, as Exhibit 10.1.) |
(f) | 1 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. See Exhibit 10(b)1 herein. | |||||||
# | (f) | 2 | - | Southern Company Omnibus Incentive Compensation Plan, Amended and Restated effective May 23, 2001. See Exhibit 10(a)1 herein. | ||||||
# | * | (f) | 3 | - | First Amendment effective January 1, 2005 to the Southern Company Omnibus Incentive Compensation Plan. See Exhibit 10(a)2 herein. | |||||
# | * | (f) | 4 | - | Forms of Award Agreement setting forth terms of nonqualified stock option grants, made under the Southern Company Omnibus Incentive Compensation Plan as Amended and Restated effective May 23, 2001, to employees of The Southern Company and its subsidiaries. See Exhibit 10(a)3 herein. | |||||
# | (f) | 5 | - | Supplemental Executive Retirement Plan of Savannah Electric, Amended and Restated effective October 26, 2000. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072 as Exhibit 10(f)13.) | ||||||
# | (f) | 6 | - | Deferred Compensation Plan for Key Employees of Savannah Electric, Amended and Restated effective October 26, 2000. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072 as Exhibit 10(f)14.) |
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# | (f) | 7 | - | 1997 Deferred Compensation Plan for Directors of Savannah Electric, Amended and Restated effective October 26, 2000. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072 as Exhibit 10(f)18.) | ||||||
# | (f) | 8 | - | Outside Directors Stock Plan for The Southern Company and its Subsidiaries, effective May 26, 2004. See Exhibit 10(a)6 herein. | ||||||
# | (f) | 9 | - | The Southern Company Supplemental Benefit Plan, Amended and Restated effective May 1, 2000 and First Amendment thereto. See Exhibit 10(a)8 herein. | ||||||
# | (f) | 10 | - | Southern Company Executive Change in Control Severance Plan, Amended and Restated effective May 1, 2003. See Exhibit 10(a)23 herein. | ||||||
# | (f) | 11 | - | Southern Company Deferred Compensation Plan, as amended and restated January 1, 2004. See Exhibit 10(a)5 herein. | ||||||
# | (f) | 12 | - | The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective May 1, 2000. See Exhibit 10(a)7 herein. | ||||||
# | (f) | 13 | - | Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy, effective May 9, 2002. See Exhibit 10(a)12 herein. | ||||||
# | * | (f) | 14 | - | First Amendment effective November 18, 2005 and Second Amendment effective December 27, 2005 to the Southern Company Amended and Restated Change in Control Benefit Plan Determination Policy. See Exhibit 10(a)13 herein. | |||||
# | (f) | 15 | - | Agreement for supplemental pension benefits between Savannah Electric and William Miles Greer. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072 as Exhibit 10(f)34.) | ||||||
# | (f) | 16 | - | Agreement crediting additional service between Savannah Electric and William Miles Greer. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2000, File No. 1-5072 as Exhibit 10(f)35.) | ||||||
# | (f) | 17 | - | Southern Company Deferred Compensation Trust Agreement as amended and restated effective January 1, 2001 between Wachovia Bank, N.A., Southern Company, SCS, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Communications, Energy Solutions and Southern Nuclear. See Exhibit 10(a)17 herein. | ||||||
# | (f) | 18 | - | Deferred Stock Trust Agreement for Directors of Southern Company and its subsidiaries, dated as of January 1, 2000, between Reliance Trust Company, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)18 herein. | ||||||
# | (f) | 19 | - | Amended and Restated Deferred Cash Compensation Trust Agreement for Directors of Southern Company and its subsidiaries, effective September 1, 2001, between Wachovia Bank, N.A., Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. See Exhibit 10(a)19 herein. |
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# | (f) | 20 | - | Change in Control Agreement between Southern Company, Savannah Electric and Anthony R. James. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2002, File No. 1-3526, as Exhibit 10(a)113.) | ||||||
# | (f) | 21 | - | Southern Company Senior Executive Change in Control Severance Plan effective May 1, 2003. See Exhibit 10(a)22 herein. | ||||||
# | (f) | 22 | - | Savannah Electric and Power Company Change in Control Plan Benefit Determination Policy, effective October 26, 2000. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2003, File No. 1-5072, as Exhibit 10(f)34.) | ||||||
# | * | (f) | 23 | - | Base Salaries of Named Executive Officers. | |||||
# | (f) | 24 | - | Summary of Non-Employee Director Compensation Arrangements. (Designated in Savannah Electric’s Form 10-K for the year ended December 31, 2004, File No. 1-5072, as Exhibit 10(f)23.) |
(g) | 1 | - | Service contract dated as of January 1, 2001, between SCS and Southern Power. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2001, File No. 1-3526, as Exhibit 10(a)(2).) | |||||||
(g) | 2 | - | Interchange contract dated February 17, 2000, between Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Power and SCS. See Exhibit 10(b)1 herein. | |||||||
(g) | 3 | - | Amended and Restated Operating Agreement between Southern Power and Alabama Power effective December 1, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2003, File No. 1-3526, as Exhibit 10(a)61.) | |||||||
(g) | 4 | - | Amended and Restated Operating Agreement between Southern Power and Georgia Power effective December 1, 2002. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2003, File No. 1-3526, as Exhibit 10(a)62.) | |||||||
(g) | 5 | - | Power Purchase Agreement between Southern Power and Alabama Power dated as of June 1, 2001. (Designated in Registration No. 333-98553 as Exhibit 10.18.) | |||||||
(g) | 6 | - | Amended and Restated Power Purchase Agreement between Southern Power and Georgia Power at Plant Autaugaville dated as of August 6, 2001. (Designated in Registration No. 333-98553 as Exhibit 10.19.) | |||||||
(g) | 7 | - | Contract for the Purchase of Firm Capacity and Energy between Southern Power and Georgia Power dated as of July 26, 2001. (Designated in Registration No. 333-98553 as Exhibit 10.21.) |
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(g) | 8 | - | Power Purchase Agreement between Southern Power and Georgia Power at Plant Goat Rock dated as of March 30, 2001. (Designated in Registration No. 333-98553 as Exhibit 10.22.) | |||||||
(g) | 9 | - | Multi-Year Credit Agreement among Southern Power, Citibank N.A., as the administrative agent, and the lenders listed therein dated as of June 10, 2005. (Designated in Southern Power’s Form 10-Q for the quarter ended June 30, 2005, File No. 333-98553 as Exhibit 10(g)1.) | |||||||
(g) | 10 | - | Purchase and Sale Agreement, by and between CP Oleander, LP and CP Oleander I, Inc., as Sellers, Constellation Power, Inc. and SP Newco I LLC and SP Newco II LLC, as Purchasers, and Southern Power, as Purchaser’s Parent, for the Sale of Partnership Interests of Oleander Power Project, LP, dated as of April 8, 2005. (Designated in Form 8-K dated June 7, 2005, File No. 333-98553, as Exhibit 2.1 and incorporated herein by reference.) | |||||||
* | (g) | 11 | - | Cooperative Agreement between United States Department of Energy and Southern Company Services, Inc. dated as of February 22, 2006. (Southern Power has requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission. Southern Power has omitted such portions from this filing and filed them separately with the Securities and Exchange Commission.) |
(a) | - | The Southern Company Code of Ethics. (Designated in Southern Company’s Form 10-K for the year ended December 31, 2003, File No. 1-3526, as Exhibit 14(a).) |
(b) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
(c) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
(d) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
(e) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
(f) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
(g) | - | The Southern Company Code of Ethics. See Exhibit 14(a) herein. |
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* (a) | - | Subsidiaries of Registrant. |
(b) | - | Subsidiaries of Registrant. See Exhibit 21(a) herein. |
(c) | - | Subsidiaries of Registrant. See Exhibit 21(a) herein. |
(d) | - | Subsidiaries of Registrant. See Exhibit 21(a) herein. |
(e) | - | Subsidiaries of Registrant. See Exhibit 21(a) herein. |
(f) | - | Subsidiaries of Registrant. See Exhibit 21(a) herein. |
Omitted pursuant to General Instruction I(2)(b) of Form 10-K. |
* (a) 1 | - | Consent of Deloitte & Touche LLP. |
* (b) 1 | - | Consent of Deloitte & Touche LLP. |
* (c) 1 | - | Consent of Deloitte & Touche LLP. |
* (d) 1 | - | Consent of Deloitte & Touche LLP. |
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* (e) 1 | - | Consent of Deloitte & Touche LLP. |
* (f) 1 | - | Consent of Deloitte & Touche LLP. |
* (a) | - | Power of Attorney and resolution. |
* (b) | - | Power of Attorney and resolution. |
* (c) | - | Power of Attorney and resolution. |
* (d) | - | Power of Attorney and resolution. |
* (e) | - | Power of Attorney and resolution. |
* (f) | - | Power of Attorney and resolution. |
* (g) | - | Power of Attorney and resolution. |
* (a)1 | - | Certificate of Southern Company’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
* (a) 2 | - | Certificate of Southern Company’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
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* | (b) | 1 | - | Certificate of Alabama Power’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (b) | 2 | - | Certificate of Alabama Power’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
* | (c) | 1 | - | Certificate of Georgia Power’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (c) | 2 | - | Certificate of Georgia Power’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
* | (d) | 1 | - | Certificate of Gulf Power’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (d) | 2 | - | Certificate of Gulf Power’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
* | (e) | 1 | - | Certificate of Mississippi Power’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (e) | 2 | - | Certificate of Mississippi Power’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
* | (f) | 1 | - | Certificate of Savannah Electric’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (f) | 2 | - | Certificate of Savannah Electric’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
* | (g) | 1 | - | Certificate of Southern Power’s Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
* | (g) | 2 | - | Certificate of Southern Power’s Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. |
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* (a) | - | Certificate of Southern Company’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (b) | - | Certificate of Alabama Power’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (c) | - | Certificate of Georgia Power’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (d) | - | Certificate of Gulf Power’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (e) | - | Certificate of Mississippi Power’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (f) | - | Certificate of Savannah Electric’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
* (g) | - | Certificate of Southern Power’s Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
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