Southern Company earns 40 cents per share in second quarter

ATLANTA – Southern Company today said second quarter earnings from continuing operations were $270 million, or 40 cents per share, at the top end of the company’s public earnings forecast for the period. Several factors, including growth in Southern Company’s competitive generation business, offset the impact of unusually mild weather in the Southeast.

The second quarter results compare with earnings from continuing operations of $256 million, or 39 cents per share, in the same period of 2000. Continuing operations exclude earnings from Mirant, the global energy company that was spun off to Southern Company shareholders on April 2.

During the quarter, customer growth continued to be steady, with the average number of customers served at the end of June 1.7 percent higher than at the same point last year. Southern Company’s growing competitive generation business in the Southeast contributed 5 cents per share to earnings in the second quarter, compared with 4 cents per share in the same period last year. Also, Southern Company had lower interest expenses from declining short-term debt and reduced interest rates.

“We produced solid results in the second quarter, even though the mild weather depressed the normal demand for electricity, especially compared with the high temperatures we had at this time last year,” said Allen Franklin, chairman, president and chief executive officer. “Our business continues to be fundamentally strong, and we are successfully executing our strategy. We remain on target to meet our financial, operational and customer service goals for the year.”

For the first six months of this year, earnings from continuing operations were $450 million, or 66 cents per share, compared with $407 million, or 62 cents per share, in the first six months of 2000.

Revenues from continuing operations for the second quarter were $2.6 billion, compared with $2.5 billion in the same period a year ago. Six-month revenues for 2001 totaled $4.8 billion, compared with $4.6 billion in the first six months last year.

Reviewing operations, Franklin said electricity use by retail customers in Southern Company`s four-state service area decreased 1.2 percent to 70.7 billion kilowatt-hours in the first six months of 2001. In-home electricity needs were up 2.0 percent to 21.2 billion kilowatt-hours. Electricity use by commercial customers - offices, stores and other non-manufacturing firms - rose 3.1 percent to 22.6 billion kilowatt-hours. Industrial energy use declined 6.9 percent to 26.5 billion kilowatt-hours, mainly because of a continuing slowdown in manufacturing activity that is occurring across the region.

Total sales of electricity to Southern Company`s customers in the Southeast, including sales to other utilities, increased 1.7 percent to 84.7 billion kilowatt-hours in the first six months of this year.

In conjunction with this earnings announcement, Southern Company has posted on its Web site a package of detailed financial information on its second quarter performance. These materials are available at 7:30 a.m. EST July 23 at Southern Company`s financial analyst call will be at 1 p.m. EST July 23, at which time Franklin and Chief Financial Officer Gale Klappa will discuss earnings and provide a general business update. Investors, media and the public may listen to a live Webcast of the call at A replay of the Webcast will be available at the site for 10 days.

Southern Company (NYSE: SO) is a super-regional energy company with more than 32,000 megawatts of electric generating capacity in the Southeast. It is one of the largest producers of electricity in the U.S. Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric, Southern Nuclear, Southern Company Energy Solutions, Southern LINC and Southern Telecom. Southern Company also owns a growing competitive generation business in the Southeast. Southern Company brands are synonymous with excellent customer service, high reliability and retail electric prices that are 15 percent below the national average. With more than 500,000 shareholders, Southern Company common stock is one of the most widely held stocks in the United States.

Forward Looking Statements Note: Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning Southern Company`s ability to meet its financial, operating and customer service targets for 2001. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such indicated results will be realized.

The following factors, in addition to those discussed in Southern Company`s Annual Report on Form 10-K for the year ended December 31, 2000, and subsequent securities filings, could cause results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry and also changes in environmental and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; current and future litigation, including the EPA civil action against certain subsidiaries of Southern Company and the diversity litigation against certain subsidiaries of Southern Company; the effects, extent and timing of additional competition in the markets in which Southern Company`s subsidiaries operate; the impact of fluctuations in commodity prices, interest rates and customer demand; state and federal rate regulation in the United States; the performance of projects undertaken by the non-traditional business and the success of efforts to invest in and develop new opportunities; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the effects of, and changes in, economic conditions in the areas in which Southern Company`s subsidiaries operate; financial market conditions and the results of financing efforts; the timing and acceptance of Southern Company`s new product and service offerings; the ability of Southern Company to obtain additional generating capacity at competitive prices; and weather and other natural phenomena.

# # #