Increased earnings at Southern Company’s Asian operations bolstered earnings results for the first quarter of 1999, although overall net income was down due in part to a change in the timing of earnings at the company’s Georgia Power subsidiary, Chairman, President and Chief Executive Officer Bill Dahlberg announced today.

Southern Energy Inc., the subsidiary that includes Southern Company’s international operations and its competitive energy supply business in North America, contributed $88 million to Southern Company’s first quarter 1999 earnings of $224 million, or 32 cents per share. In comparison, Southern Company’s first quarter 1998 earnings were $242 million, or 35 cents a share.

The company’s retail business in the Southeast continued to produce strong operating results, although mild weather and the timing of Georgia Power’s earnings under a recently approved rate order somewhat reduced earnings for the quarter.

Earnings for the 12 months ending March 31, 1999, were $959 million or $1.37 a share, compared with $1.03 billion or $1.49 a share for the 12 months ending March 31, 1998.

Southern Company’s board of directors today also approved a quarterly dividend of 33 ½ cents a share, payable June 5, 1999, to shareholders of record May 3, 1999. This marks the 206th consecutive quarter – dating back to 1948 – that Southern Company has paid a dividend to its shareholders.

The board also approved the repurchase of up to 50 million shares of the company’s common stock over the next two years through open market or privately negotiated transactions. The program does not establish a target stock price or timetable for specific repurchases.

"Our goal is to become the best investment in the electric utility industry,” Dahlberg said. “However, with our stock price at its current level and the confidence we have in our future prospects, a repurchase of our stock is a compelling investment.” Morgan Stanley Dean Witter has been selected as the agent to assist the company in its repurchase program.

In reviewing Southern Company’s first quarter performance, Dahlberg noted, “Our Asian business is a critical component of Southern Company’s growth strategy, and we’re seeing increased earnings from our investment there.” Asian results included gains related to a power plant project in China and improved financial and operating performance. Southern Energy’s European operations also reported improved earnings for the period.

“As the U.S. electric utility business undergoes a period of substantial structural change, Southern Energy will have an ever-increasing role in helping Southern Company become the best investment in our industry,” Dahlberg said, noting that Southern Energy’s $88 million contribution to net income for the first quarter is $25 million higher than its contribution for the comparable period a year earlier.

“This continued growth has Southern Energy well on track toward achieving Southern Company’s goal of deriving 30 percent of our net income from non-traditional businesses by 2003,” Dahlberg said.

Southern Energy is focusing its efforts to buy or build power plants in four U.S. regions where generating assets are important to success as an energy marketer – California/Desert Southwest, Texas/Louisiana, the Midwest and the Northeast. The company recently acquired generation assets in California from San Francisco-based Pacific Gas and Electric Company and in New England from subsidiaries of Commonwealth Energy System and Eastern Utilities Associates. An agreement to purchase assets from Orange and Rockland Utilities Inc. and Consolidated Edison Inc. in New York is pending.

“We also are continuing to seek growth opportunities in both the retail and wholesale portions of our traditional utility business in the Southeast,” Dahlberg said.

In fact, earlier this year the company announced plans to build a peaking power plant in Georgia that will be fully committed to the wholesale market. The facility will eventually include 1,200 megawatts of generating capacity, of which 600 megawatts is scheduled for commercial operation in the summer of 2000.

Reviewing operations, Dahlberg said electricity use by retail customers in Southern Company`s service area in the southeastern United States increased 1.4 percent to 32.4 billion kilowatt-hours during the first quarter of 1999. In-home electricity needs were down 0.4 percent to 9.5 billion kilowatt-hours. Electricity consumption by commercial customers – offices, stores and other non-manufacturing firms – rose 6.2 percent to 9.4 billion kilowatt-hours. Industrial energy use decreased 0.6 percent to 13.3 billion kilowatt-hours.

Total sales of electricity to Southern Company’s customers in the Southeast, including sales to other utilities, decreased 3.1 percent to 36.5 billion kilowatt-hours for the first quarter of 1999. Revenues for the first quarter of 1999 were $2.4 billion, compared with $2.5 billion in 1998’s first quarter.

Southern Energy Inc., a unit of Southern Company, develops, builds, owns and operates power production and delivery facilities and provides a broad range of services to utilities and industrial companies around the world. Its Southern Company Energy Marketing subsidiary, jointly owned with Vastar Resources Inc., provides energy trading, marketing and financial services and other energy-related commodities, products and services to customers in North America.

Southern Company (NYSE: SO) is an international energy company with $36 billion in assets through regional utilities and operations around the world. It is the largest producer of electricity in the United States and one of the world’s largest independent power producers. Based in Atlanta, Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Through its Southern Energy Inc. subsidiary, Southern Company supplies electricity in 10 countries on four continents. It also provides energy-related marketing, trading and technical services and Southern LINC wireless telecommunications.