Dahlberg reports to Southern Company shareholders

With the acquisition of Consolidated Electric Power Asia (CEPA), and a stake in Bewag, the state-run utility in Berlin, Southern Company continues to implement its global strategy for future earnings growth, A.W. Dahlberg, chairman, president and chief executive officer, told shareholders today.

“A year ago when we met, Southern Company was a regional utility with a handful of international projects,” Dahlberg told Southern Company’s 51st annual meeting of shareholders at the Hyatt Regency Hotel in downtown Atlanta. “Today, though, Southern Company can be defined as an international energy company — with regional utilities and operations around the world. We now conduct business on four continents and in eight countries.” With European government approval of the Bewag acquisition, the company will have operations in nine countries.

“We seized another opportunity this month with our agreement to acquire a stake in Bewag, an electric utility serving 2.1 million customers in Berlin, Germany,” Dahlberg said. “Bewag creates an immediate positive impact on our earnings, as well as the potential for further earnings growth in markets throughout Europe.”

Dahlberg told shareholders the company is on track to achieve its goal of producing 30 percent of its net income from non-traditional businesses by 2003.

Dahlberg noted that Southern Company is the largest generator of electricity in America — based on total sales and generating capacity — and is now the fourth largest in the world. Earnings in 1996 were $1.13 billion (2.2 percent increase over 1995) on revenues of $10.4 billion (12.8 percent increase over 1995).

In 1996, the cost of Southern Company electricity was 16 percent less than the national average for investor-owned utilities. The company’s board of directors increased the dividend on the company’s common stock in January for the sixth straight year.

Southern Company (NYSE: SO), the largest producer of electricity in the United States, is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Based in Atlanta, Southern Company provides energy-related marketing, trading and technical services and wireless telecommunications. Southern Company’s common stock is one of the 20 most widely held corporate stocks in America.

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.

In the Southeast, the company’s traditional service territory, Dahlberg highlighted three areas where the company has been successful and will work to maintain a competitive advantage: Overall customer satisfaction is at an all-time high with 97 percent of customers saying they are satisfied with the performance of its operating companies; average availability rate for its fossil-fuel and nuclear plants again beat the national average; and Southern Company has earned strong brand name recognition.

Internationally, Dahlberg said there are good business reasons for Southern Company’s entrance into the Pacific Rim. “Asia is the world’s fastest growing market for electricity. It has one of the world’s lowest rates of electricity consumption per person, but it also has the world’s highest economic growth rate. And economic growth, of course, demands electricity.”

Dahlberg reported that Bewag will give the company a unique opportunity to enter the European electricity market in a dynamic international city. “Berlin has a metro area of 6 million people. In two years, it will be the capital of the largest economy in Europe and the third-largest economy in the world.” In addition, Europe will begin becoming one electricity market in 1999, and Bewag will give Southern Company access to markets in both western and central Europe.

During the business portion of the meeting, stockholders approved four proposals: the company’s performance stock plan, the company’s performance dividend plan, the Southern Energy Inc. value creation plan, and an amendment to the company’s executive productivity improvement plan.

Also, stockholders elected a slate of 14 candidates to the company’s board of directors. In addition to Dahlberg, directors include:

John C. Adams, 58, chairman of the board, president and chief executive officer of Russell Corp., Alexander City, Ala.;

A.D. Correll, 56, chairman of the board and chief executive officer of Georgia-Pacific Corp., Atlanta;

Paul J. DeNicola, 48, president and chief executive officer of Southern Company Services and executive vice president and group executive of Southern Company, Atlanta;

Jack Edwards, 68, member, Hand Arendall LLC (attorneys), Mobile, Ala.;

H. Allen Franklin, 52, president and chief executive officer of Georgia Power, and executive vice president of Southern Company, Atlanta;

Bruce S. Gordon, 51, group president of Bell Atlantic Network Services Inc., Arlington, Va.;

L. G. Hardman III, 57, chairman of the board and chief executive officer of First Commerce Bancorp Inc., Commerce, Ga.;

Elmer B. Harris, 58, president and chief executive officer of Alabama Power and executive vice president of Southern Company, Atlanta;

William A. Parker Jr., 69, chairman of the board of Seminole Investment Group LLC, Atlanta;

William R. Rushton III, 68, chairman emeritus of Protective Life Corporation, Birmingham, Ala.;

Gloria M. Shatto, 65, president of Berry College, Mount Berry, Ga.;

Gerald J. St. Pe, 57, president of Ingalls Shipbuilding Inc., Pascagoula, Miss.;

Herbert Stockham, 68, chairman of the board, Stockham Valves & Fittings Inc., Birmingham, Ala.