Remarks by A.W. Dahlberg, Chairman, The Southern Company

The Southern Company’s 50th Annual Meeting of Stockholders

The Gwinnett Civic and Cultural Center

Wednesday, May 22, 1996 10 a.m.

Let me again thank Billy Payne for taking the time to come and be with us this morning. Just being around his enthusiasm for a few minutes is enough to ignite the Olympic flame in all of us.

It’s appropriate that Billy be here for a couple of reasons.

First, he can’t do this by himself. He needs 42,000 volunteers to put on the Olympics.

And I’m proud to say that 2,100 of those volunteers will come from The Southern Company.

They will be from throughout our company, and they will be working to put on the Games not just here in Atlanta -- but in Birmingham, Savannah, Athens, Columbus and, in fact, throughout the American South.

Many of our volunteers will be assisting in the opening and closing ceremonies. They earned that privilege by devoting numerous personal hours to volunteer work in their community. They put in more than 230,000 hours of volunteer service over a 27-month period.

I take immense pride in the fact that 5 percent of all Olympic volunteers will be from The Southern Company. But I’m not surprised -- that’s our company’s legacy.

Our companies were doing their part in their communities even back in 1924 -- the year America’s best swimmer, a young man named Johnny Weissmuller, traveled to Paris for the Olympic Games and won three gold medals. At that time, Alabama Power Company had already become the first utility in America to create a department devoted to industrial development.

And we were doing our part in 1932 -- the year the Olympics first came to Los Angeles and the American West ... the year that America’s best -- a 20-year-old Texan named Babe Didriksen -- proved that she was the world’s greatest female athlete. Our employees were already living out the creed then of one of our early leaders, Preston Arkwright, who said that we would be “a citizen wherever we serve.”

And we were doing our part in 1948 -- the year America’s best schoolboy athlete, Bob Mathias, went to war-ravaged London for the Summer Games and won the Olympic decathlon ... at age 17. Back home, we were helping the South prepare for post-war industrial growth.

Our company and employees are still doing their part today. Whether it’s in Georgia. Or Alabama. Or the southern part of Mississippi. Or northwest Florida. Even northern Chile or the southwestern part of England.

Why? Because that’s our legacy.

Why? Because for 17 days this summer, more than half the world’s population will watch an event in our traditional service area.

And they will see what we have known for so long -- that the American South is a great place. A great place to live ... a great place to work ... a great place to realize your dreams.

And if we want to grow our company and grow our business, that’s a great message to take to the world.

You have read about America’s best athletes and how they have spent years preparing for this 17-day moment in time. We too have been preparing ... ever since that wonderful September morning in 1990 ... when the Centennial Games were awarded to the city of Atlanta and, in fact, to the American South.

Since then, our employees have been designing the facilities needed to serve the world’s best athletes ... the media that will come to cover them ... and the fans who will come to cheer them.

In more recent months, as we have installed the lines and equipment that will electrify the Games, I have sensed an immense pride among our people ... a pride in having the honor of giving more than 10,000 athletes from 195 countries the power to compete.

I have also sensed a great determination ... a determination to show that we too are America’s Best.

That’s what I told you -- perhaps somewhat boldly -- a year ago ... that we intend to be America’s Best Diversified Utility.

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

Our return on common equity was over 13 percent. And as you can see, our dividends per share continued their upward climb to $1.22 per share.

As a result of our performance, our board of directors in January raised our dividend for the fifth consecutive year.

Already this year, our earnings are exceeding those of last year. For the first four months of 1996, they were $276 million -- or 41 cents a share -- compared with $247 million, or 37 cents, a share for the same period in 1995.

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.

When I discussed our strategy with you a year ago, I said we’d be looking for two types of diversification opportunities -- opportunities to diversify into other utility-related businesses and opportunities to further diversify internationally.

South Western Electricity -- or SWEB as it’s called -- immediately became our third largest subsidiary, with $1.4 billion in 1995 revenues.

Because it’s an established company --with 1.3 million customers -- SWEB has had an immediate positive impact on our bottom line. That’s why we bought it.

We bought it because every action we take is aimed at being America’s Best Diversified Utility.

We have decided that the way we will measure ourselves against that goal is through total shareholder return.

In other words, we will be successful if an investment in Southern Company is worth more -- over time -- than an investment in any other electric utility.

To make sure we achieve our ultimate goal, we have set some Big Intermediate Goals. We call them BIGs and consider them to be mileposts along the journey to our ultimate destination.

They are hard goals. They are demanding goals. But that’s the price of playing in a business that’s rapidly changing ... that’s the price of being competitive.

And we are competitive people.

Our strategy is of course being driven by the changing electric marketplace ... a marketplace that is rapidly moving from regulation to competition.

No one knows for sure the type or timing of the competition that we’ll face. Those details remain to be decided.

But we’re an important, active participant in the discussion. And as it continues, we intend to keep you informed ... may even ask you to participate.

However, we are not waiting for the final outcome of the debate. We’re preparing now for the most competitive possible environment.

And we’re preparing not just to participate ... we’re preparing to win.

That’s why we participate in regional wholesale electricity markets all across America.

And that’s also why we’re planning to continue to diversify both domestically and internationally -- when we find good opportunities.

As you may have read in the media in recent weeks, we were considering a possible transaction involving National Power PLC, the United Kingdom’s largest power generator and a company that owns generation in America and other countries.

The British government has blocked our effort, under the belief that the generation market there is not fully prepared for major change at this time.

That’s unfortunate. 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.

Why are we interested in further international diversification?

Because it enables us to not only boost our bottom line but also learn lessons that will be invaluable to us in the future.

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.

When we go down to Chile and fully participate in that very competitive market, we learn lessons that are going to be the tools for success in the American South.

So when we make international investments, we’re not trying just to get bigger. We’re trying to get better.

We have used an Olympic theme this morning, not because it’s the sole focus of our business, but because it makes evident the spirit of our company and the spirit of our people -- the spirit and drive to be America’s Best.

You could see that spirit when our service area was hit by two major hurricanes 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.

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 -- an around-the-clock effort.

They restored service to 1.2 million customers.

You could also see our employees’ drive last summer when they were challenged by extreme, extended heat.

But they met the challenge.

They found ways to supply record electricity demand on nine different days.

We were able to meet that record demand through the innovation and teamwork of our power-generation employees.

I saw that same type of innovation and teamwork several months ago in Mobile, Alabama, at an employee rally.

It was a sharing rally -- a time when teams from our plants shared their best practices with employees from other plants.

Their spirit and drive to be the best were obvious in the enthusiasm and energy and creativity they used to showcase how they are saving millions and millions of dollars and improving efficiency.

It was typical of the enthusiasm and energy and creativity that has been sparked in all areas of our company by our vision of being America’s Best.

Already this year, Fortune magazine has again named us America’s most admired electric utility.

But I want to tell you that being America’s Best should be a platform for our vision -- not a plateau.

Just like the Olympians who will come here in two months, we want to be the best our country has to offer.

We want to ascend to that medal platform.

Or ... in the words of the Olympic motto:

Citius, altius, fortius.

Swifter, higher, stronger.

That’s the spirit that’s driving our company today.

That’s the spirit that’s driving our people to be America’s Best.

That’s the spirit we see in this moment from our recent employee Sharing Rally in Mobile -- brought to you by a team of employees from Miller Steam Plant.