Generations 2012 Annual Report
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Innovation Video 1

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Alvin Vogtle had been a fighter pilot during World War IItherefore, a man not easily frightened. He had also successfully escaped from a German POW camptherefore, a man who understood the importance of taking calculated risks.

As chairman of Southern Company, Vogtle put those attributes to the test. In 1974, the company was awash in short-term debt, and Vogtle needed to buy it down. For that, he would need cashand his plan for getting it was to issue common stock and use the net proceeds to retire the debt.

It was a daring plandeliberately diluting the company’s value at a time when the shares themselves were only worth about half of book value. And so, of course, it workedbrilliantly. Vogtle’s bold move preserved the financial integrity of Southern Company and helped keep its operating companies afloat during a time of low revenues and considerable market uncertainty.

Vogtle remembered what his predecessors had taught himthat the financial strength of a business is one of its greatest assets. It was a guiding principle he would soon pass on to others. Theyand the generations of employees who followed themwould benefit from the lesson.


In 2001, Southern Company was at a crossroads. Its non-regulated subsidiary, Southern Energy, was being spun off as an independent business, soon to be renamed Mirant. The value of the company was being divided, with 60 percent remaining with the core business and 40 percent departing with the spin-off.

In such cases, conventional wisdom would seem to dictate that the dividend be reduced. But that’s not what happened. Southern Company maintained its commitment to shareholders by keeping its 2001 dividend whole and reassured debt investors that the balance sheet would be further strengthenedreaping the benefits of a customer-focused business strategy.

Once again, the values of the company’s founders had held sway. The importance of financial integrity was reaffirmed, and a strong company became even stronger.

Today, Southern Company has the best financial integrity of any company of size in its industry, and as a result enjoys an industry-leading credit rating, historically low borrowing costs and an outstanding reputation in credit and equity markets worldwide. Which ultimately benefits customers by keeping rates low. Which leads to healthy regulatory relationships and ready access to capital. Which lets us do even more for customers. Which is really what it’s all about.

PICTURED: Meredith Odom, capital markets team leader, is among those responsible for ensuring Southern Company raises capital at the most affordable rates. Brad Hobbs, manager of strategic finance, monitors and evaluates the company’s financial soundness relative to current market trends.



James Mitchell wants to build an electric network across the Deep South, but U.S. investors are wary. So Mitchell heads across the pond to London, where British capital is ready and waiting. The infusion is the bedrock for Southern Company’s financial future.



The U.S. stock market crashes, but Southern Company survives, thanks to its strong network of companies and firm financial footing. Soon after, company leaders B.C. Cobb and Thomas Martin consolidate their operations into a single holding company.



New Commonwealth & Southern president Wendell Willkie enacts a plan to survive the Great Depression by reducing rates and encouraging increased usage. In so doing, Willkie demonstrates that his business is built for the long haul. Other utilities soon follow suit.



Southern Company pays its first dividend to shareholders, starting an uninterrupted stream of more than 260 quarterly payments over the next 65 yearsand persuading multiple generations of investors to hold the company’s common stock for the long term.



Southern Company Chairman Alvin Vogtle issues new common stock to reduce the company’s short-term debt. In the process, he steadies the helm during a difficult economic period and buys time for the operating subsidiaries to solve their respective financial challenges.



Southern Company’s unregulated subsidiary, Southern Energy, is spun off and renamed Mirant. The value of Southern Company’s common stock is divided proportionally, but the dividend is kept whole, as a way of maintaining long-term shareholder value.



The dividend on Southern Company’s common stock begins a series of annual increases that will eventually raise it from $1.34 per share to $1.96 per share by 2012a total increase of 46 percent.



Major construction projects such as Plant Vogtle 3 and 4 in Georgia and the Kemper project in Mississippi require lots of financing, and the Southern Company system is raising capital at historically low ratesthanks to its industry-leading financial integrity. Lower-cost financing means lower electric rates for customers.



For the 11th year in a row, Southern Company increases its annual dividend. Total shareholder return has outperformed the S&P 500 over the 10-, 20- and 30-year periods ended Dec. 31, 2012, with about half its volatility.



Once again, Fortune magazine names Southern Company one of the world’s most admired electric and gas utilities. It is also the fourth year in a row the company has been named No. 1 in the magazine’s “financial soundness” category.