Dahlberg reports to Southern Company Shareholders - 5.22.96

Buying utilities in other parts of the world is helping Southern Company become the best utility in America, A.W. Dahlberg, chairman, president and chief executive officer, told shareholders today.

"Our results have been boosted by our purchase last year of South Western Electricity PLC, one of the United Kingdom`s 12 regional electric distribution companies," Dahlberg told Southern Company`s 50th annual meeting of shareholders at the Gwinnett Civic and Cultural Center near Atlanta.

"South Western Electricity -- or SWEB, as it is called -- immediately became our third-largest subsidiary with $1.4 billion in 1995 revenues. And because it`s an established company -- with 1.3 million customers -- SWEB has had an immediate positive impact on our bottom line," Dahlberg said. "We bought it because our every action is aimed at being America`s best diversified utility.

"Our financial performance in 1995 has clearly put us on that path," he said. "Our net income was a record $1.1 billion."

Dahlberg noted that Southern Company`s return on common equity was more than 13 percent for 1995 and that the company`s strong financial position prompted the board of directors in January to increase the dividend on the company`s common stock for the fifth straight year.

The Southern Company (NYSE: SO) is the parent firm of five electric utilities: Alabama Power, Georgia Power, Mississippi Power, Gulf Power and Savannah Electric. Southern Company is the nation`s largest producer of electricity, and the company`s common stock is one of the 20 most widely held corporate stocks in America.

Other subsidiaries include Southern Communications Services, Southern Company Services, Southern Development and Investment Group, Southern Nuclear and Southern Electric International -- which is responsible for Southern Company`s acquisitions and diversification efforts in other countries.

"Why are we interested in further international diversification? Because we can not only boost our bottom line but also learn lessons that will serve us well in the future," Dahlberg told stockholders. "We`ve found that when we go into a country where the regulations or operations are different from ours, the lessons we learn are invaluable."

"When we sit down for a week next to someone in the supply business at SWEB, we learn lessons in marketing that we have yet to experience," he said. "When we go down to Chile and participate in that fully competitive market, we learn lessons that are going to be the tools for success in America. So when we make international investments, we`re not trying to just get bigger. We`re trying to get better."

Dahlberg noted that a recent effort to further expand Southern Company`s international market presence -- a possible transaction involving National Power PLC, the UK`s largest electricity generator -- was blocked by the British government.

"That`s unfortunate," he said. "Because it`s rare that you find an opportunity of that size and with that potential impact on your company. But we`ll continue to look for places to grow. And although not every deal will be as large as National Power, we are willing to be fairly aggressive in our efforts."

Reporting on the company`s most recent financial results, Dahlberg announced that earnings for the first four months of 1996 totaled $276 million or 41 cents a share, compared with $247 million or 37 cents a share for the same period a year earlier.

Net income for the 12 months ending April 30, 1996, was $1.13 billion or $1.69 per share, compared with $1.06 billion or $1.61 a share for the year that ended April 30, 1995.

Dahlberg also discussed preparations under way to supply power to the 1996 Summer Olympics in Atlanta and noted that 5 percent of the 42,000 volunteers working at the Games will be Southern Company employees.

He also praised employees for their efforts to restore electric service to thousands of customers who lost power when two major hurricanes hit the company`s service area last year.

"The second one -- Opal -- ripped a wide path through northwest Florida, Alabama and Georgia. The area of damage was the largest in the history of our company," Dahlberg said. "But once all the trees and power lines were down, the spirit of our people rose up. Our employees put on an absolutely heroic effort."

During the business portion of the meeting, stockholders elected a slate of 14 candidates to the company`s board of directors.

In addition to Dahlberg, directors elected to the Southern Company board are:

John C. Adams, chairman, president and chief executive officer of Russell Corporation, Alexander City, Ala.;

A.D. Correll, chairman of the board and chief executive officer, Georgia-Pacific Corporation, Atlanta, Ga.;

Paul J. DeNicola, president and chief executive officer of Southern Company Services and executive vice president of Southern Company, Atlanta, Ga.;

Jack Edwards, member, Hand Arendall LLC (attorneys), Mobile, Ala.;

H. Allen Franklin, president and chief executive officer of Georgia Power and executive vice president of Southern Company, Atlanta, Ga.;

Bruce S. Gordon, group president of Bell Atlantic Network Services Inc., Arlington, Va.;

L.G. Hardman III, chairman of the board and chief executive officer of First Commerce Bancorp Inc., Commerce, Ga.;

Elmer B. Harris, president and chief executive officer of Alabama Power and executive vice president of Southern Company, Birmingham, Ala.;

William A. Parker Jr., chairman of the board, Seminole Investment Company LLC, Atlanta, Ga.;

William J. Rushton III, chairman emeritus of Protective Life Corporation, Birmingham, Ala.;

Gloria M. Shatto, president, Berry College, Mount Berry, Ga.;

Gerald J. St. Pe, president of Ingalls Shipbuilding Inc., Pascagoula, Miss;

Herbert Stockham, chairman of the board, Stockham Valves & Fittings Inc., Birmingham, Ala.