Our industry is embarking on a course that will be marked by ever-increasing change, Southern Company Chairman,
President, and Chief Executive Officer A.W. Dahlberg said today.
Addressing the 49th annual meeting of stockholders, Dahlberg said, Regardless of our success, our core business will be a
slow-growing business for the foreseeable future. So its mandatory that we think about other areas in which we can grow.
The Southern Company (NYSE: SO) is the parent firm of five electric utilities: Alabama Power, Georgia Power, Gulf
Power, Mississippi Power, and Savannah Electric. Other subsidiaries include Southern Electric International, Southern
Nuclear, Southern Company Services, and Southern Development and Investment Group. The Southern Companys
common stock is one of the 20 most widely held corporate stocks in America.
Reporting on the companys financial performance, Dahlberg announced that earnings for the first four months of 1995
totaled $247 million or 37 cents a share, compared with $180 million or 28 cents a share for the same period a year earlier.
Net income for the 12 months ending April 30, 1995, was $1.06 billion or $1.61 a share, compared with $974 million or
$1.52 a share for the year that ended April 30, 1994.
Dahlberg noted that earnings for the periods ending in 1994 were affected by charges of $58 million, or 9 cents a share for
work-force reduction programs.
Dahlberg told stockholders, gathered in Savannah, Ga., that the pressure for change in the electric utility industry is being
driven by three factors:
The first is our global economy, he said. If our industrial customers sell products in global markets, then we must compete
with the cost of a kilowatt-hour in Taiwan and the cost of a kilowatt-hour anywhere else in the world.
The second driving force is technology. With todays technology, we can do many things that we couldnt do a few years
ago, he said. The third driving force is the philosophical belief that competition is better than monopoly and less regulation
is better than more regulation. Its a belief that has changed the airline industry, has revolutionized the natural gas and
telecommunications industries, and now has begun to change our industry.
If we look at the landscape of our industry today, we see increasing competition to build new generation -- specifically from
independent power producers, Dahlberg continued. We see a multitude of power marketers, pushing hard for more retail
competition. We see our retail customers demanding more choices and more control over their energy costs.
We see wholesale rates being driven down across the country, he said. And we see federal regulators calling for further
Dahlberg told shareholders that The Southern Company intends to be Americas best diversified utility in the new, more
competitive business environment.
Were not going to stop being the Southeasts major utility, he said. We have been the Southeasts major utility for years,
and we will continue to serve the Southeast -- first and foremost. But our vision is to be more than just a southeastern utility.
We intend to be an American utility. In the changing landscape of todays electric utility industry, we see this entire country
as a potential marketplace.
Dahlberg also noted The Southern Companys geographical diversification in other parts of the world, citing Southern
Electric Internationals presence in Latin America, Europe, Asia, and other areas.
But diversified means more than that, he said. It means we are going to be in several utility-type businesses. And I want
to stress utility. We dont intend to diversify into things we dont know how to do.
But there are many things that we do have the expertise to do, and we must look at those things if were thinking about how
we will grow beyond our current business, Dahlberg said. We think there are some applications within telecommunications
that would be appropriate for us. We also think there may be some attractive opportunities in the water utility business, or
the garbage utility business, or the natural gas utility business.
He noted that The Southern Company currently is barred from many of those businesses by an antiquated piece of
legislation known as the Public Utility Holding Company Act of 1935, which the company is working in Washington to
The Holding Company Act restricts the business activities of 10 electric utilities, including The Southern Company. Several
hundred other electric companies are not subject to the Depression-era law.
During the business portion of the meeting, stockholders elected a slate of 14 candidates to the companys board of
directors and ratified the appointment of Arthur Andersen LLP as independent auditors for the year 1995.
Shareholders also approved a stock ownership plan for outside directors of Southern Company subsidiaries and amended a
productivity improvement plan for executive officers and the companys executive stock plan.
Shareholders rejected a proposal that would have required additional disclosures about consulting firms performing work for
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 Corp., Atlanta, Ga.;
Paul J. DeNicola, president and chief executive officer of Southern Company Services, Inc. and executive vice president of
The Southern Company, Atlanta, Ga.;
Jack Edwards, partner, Hand, Arendall, Bedsole, Greaves & Johnston (attorneys), Mobile, Ala.;
H. Allen Franklin, president and chief executive officer of Georgia Power and executive vice president of The 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 The Southern
Company, Birmingham, Ala.;
William A. Parker, Jr., chairman of the board, Seminole Investment Company, L.L.C., 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. Pé, president of Ingalls Shipbuilding, Inc., Pascagoula, Miss.;
Herbert Stockham, chairman of the board, Stockham Valves & Fittings, Inc., Birmingham, Ala.