Dear Fellow Shareholders,

It’s an exciting time to be at Southern Company. It’s a time of challenges and opportunities, a time when the innovative spirit of our workforce will be called upon to solve complex issues and open the door to new ways of thinking. It’s the beginning of a highly emergent period in the development of our nation’s energy policy, and our company is already helping to lead that transformation. Against that backdrop, I am pleased to report to you on our accomplishments from 2010 and our plans for 2011 and beyond.

I could not, however, continue this message without first acknowledging the incalculable contributions of my predecessor, David Ratcliffe. David retired in December 2010 after 39 years of service to Southern Company, including the last six years as CEO. Through his strong sense of character, dedication and integrity, David crafted a legacy that will endure for many years to come. He did more than manage a Fortune 200 company; he helped lead an entire industry, always with a focus on the present and an eye toward the future.

As a friend and mentor, David Ratcliffe has few equals, and the lessons he imparted during his tenure here –  lessons about commitment, discipline and perseverance – will be gratefully carried forward by the next generation of leadership. On behalf of everyone here at Southern Company, David, we thank you.

Our company’s financial performance in 2010 was largely influenced by two factors: an emerging economic recovery and an unusual pattern of consistently unseasonable weather. On the economic front, an upward trend in exports and an increasingly efficient manufacturing base helped fuel a rebound in the industrial sector, a trend that has continued into the early part of this year. While job creation so far has not kept pace with this industrial recovery, signs increasingly point to the potential for new jobs in 2011, with anticipated positive impact on residential and commercial sales.

Overall, revenues increased 10.9 percent compared with 2009, to $17.46 billion. Earnings rose to $1.98 billion, or $2.37 a share, compared with $1.64 billion, or $2.07 a share, in 2009. In April 2010, we increased our dividend, marking nine consecutive years of increases.