UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3526
A. Full title of the plan and the address of the plan,
if that differs from that of the issuer named below:
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
THE SOUTHERN COMPANY
270 Peachtree Street, NW
Atlanta, Georgia 30303
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
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Page
EXHIBITS 2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 3
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2004 AND 2003:
Statements of Net Assets Available for Benefits 4
Statements of Changes in Net Assets Available for Benefits 5
Notes to Financial Statements 6-10
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2004--
Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets
(Held at End of Year) 11
SIGNATURE 13
NOTE: All other schedules required by Section 2520.103-10 of the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted
because they are not applicable.
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EXHIBITS
23.1 - Consent of Deloitte & Touche LLP.
- 2 -
Deloitte
Deloitte & Touche LLP
Suite 1500
191 Peachtree Street, NE
Atlanta, GA 30303-1924
USA
Tel: +1 404 220 1500
Fax: +1 404 220 1583
www.deloitte.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Employee Savings Plan Committee and Participants
The Southern Company Employee Savings Plan
We have audited the accompanying statements of net assets available for benefits
of The Southern Company Employee Savings Plan (the "Plan") as of December 31,
2004 and 2003, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal controls over financial
reporting as a basis for designing audit procedures that are appropriate under
the circumstances, but not for the purposes of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2004 and 2003, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2004, is presented for purposes of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This schedule is the responsibility of the Plan's
management. Such schedule has been subjected to the auditing procedures applied
in our audit of the basic 2004 financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/Deloitte & Touche LLP
June 22, 2005
Member of
Deloitte Touche Tohmatsu
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
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2004 2003
ASSETS:
Participant-directed investments $ 3,350,420,179 $ 2,956,483,923
---------------- ---------------
Receivables:
Due from broker for securities sold 1,618,279 3,282,032
Accrued interest 839,520 798,713
--------------- ---------------
Total receivables 2,457,799 4,080,745
Cash 630,806 1,097,219
--------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,353,508,784 $ 2,961,661,887
=============== ===============
See notes to financial statements.
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2004 AND 2003
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2004 2003
ADDITIONS:
Investment income:
Interest and dividends $ 102,813,213 $ 99,597,432
Net appreciation in fair value of investments 282,418,016 240,334,594
--------------- ---------------
Total investment income 385,231,229 339,932,026
--------------- ---------------
Contributions:
Participants' 119,669,152 112,376,793
Participants' rollovers 1,160,164 1,472,081
Employer's 56,439,675 54,680,122
--------------- ---------------
Total contributions 177,268,991 168,528,996
--------------- ---------------
Total additions 562,500,220 508,461,022
--------------- ---------------
DEDUCTIONS:
Benefits paid to participants (169,934,367) (140,523,971)
Administrative expenses (718,956) (653,167)
--------------- ---------------
Total deductions (170,653,323) (141,177,138)
--------------- ---------------
NET INCREASE 391,846,897 367,283,884
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,961,661,887 2,594,378,003
--------------- ---------------
End of year $ 3,353,508,784 $ 2,961,661,887
=============== ===============
See notes to financial statements.
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
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1. DESCRIPTION OF THE PLAN
The following description of The Southern Company Employee Savings Plan
(the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for more complete
information.
General--The Plan is a defined contribution plan administered by the
Southern Company Employee Savings Plan Committee (the "Committee"), as
designated in the Plan. The Plan covers substantially all employees and
certain former employees and retirees of the following subsidiaries of The
Southern Company (the "Company"): Alabama Power Company, Georgia Power
Company, Gulf Power Company, Mississippi Power Company, Savannah Electric
and Power Company, Southern Communications Services, Inc., Southern
Company Energy Solutions LLC, Southern Company Services, Inc., and
Southern Nuclear Operating Company, Inc. (collectively referred to as the
"Employing Companies"). The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Plan Administration--The trustee and recordkeeper of the Plan are Merrill
Lynch Trust Company, FSB (the "Trustee") and Merrill Lynch, Pierce, Fenner
& Smith, Inc., respectively.
Participation--Employees meeting certain criteria, as defined, may elect
to participate in the Plan immediately after the employee's first day of
employment.
Contributions--Participants may elect to contribute up to total before-tax
and after-tax contributions of 25% of eligible compensation, as defined by
the Plan (after-tax contributions cannot exceed 6% for highly compensated
employees). Participants may change the percentage of their contributions
at any time.
The Employing Companies' contributions ("Employer Matching Contributions")
are discretionary and determined by the Board of Directors of Southern
Company Services, Inc. on an annual basis. For the years ended December
31, 2004 and 2003, the Employing Companies contributed, on behalf of the
participants, an amount equal to 75% of each participant's contribution,
up to 6% of eligible compensation. Such Board of Directors reserves the
right to discontinue or change the Employer Matching Contributions at any
time; however, they have not expressed any intent to do so at the present
time.
Contributions are subject to certain Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code") limitations. Participants may also
contribute by rolling over to the Plan amounts representing distributions
from other qualified defined benefit, defined contribution plans or
eligible individual retirement accounts.
Participant Accounts--Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contributions, the Employer Matching Contributions, and an allocation of
Plan earnings, and charged with any withdrawals and allocations of Plan
losses and administrative expenses. The benefit to which a participant is
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------
entitled is the benefit that can be provided from the participant's vested
account.
Investment Options--Participants' contributions may be invested in 1%
increments into any of the investment options offered by the Plan. The
Plan offers a participant-directed brokerage account that allows
participants to purchase publicly traded securities. Participants may
change their investment options at any time, with the following exception:
Participants may have Mirant Corporation common stock in their Plan
accounts as a result of the Company's spin-off of Mirant Corporation in
April 2001. In that spin-off, participants with the Company's common stock
in their accounts received a dividend in the form of Mirant Corporation
common stock. The investment is held in the Mirant Corporation Stock Fund.
Participants who received Mirant Corporation common stock in the spin-off
were given five years (until June 30, 2006) to liquidate the Mirant
Corporation Stock Fund and reinvest the proceeds in one of the investment
options permitted under the Plan. The Plan has never permitted additional
investments into the Mirant Corporation Stock Fund beyond the shares that
participants received as a dividend in the spin-off. The spin-off did not
impact the number of the Company's shares held in the participants'
accounts.
Vesting--Participants are immediately vested in their accounts.
Participant Loans--Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum of $50,000 or 50% of their account
balances, whichever is less. The loans are secured by the balance in the
participant's account and bear interest at rates commensurate with
prevailing rates as determined by the Committee. Generally, principal and
interest is paid ratably through payroll deductions.
Payment of Benefits--Upon retirement, a participant may elect to receive
either a lump-sum amount equal to the value of the participant's vested
interest in his or her account, or annual installments over a period of up
to twenty years. On termination of service due to death or disability, or
for other reasons, a participant or beneficiary may receive the value of
the vested interest in his or her account as a lump-sum distribution.
Each participant may elect to receive a cash distribution of all or a
portion of the dividends payable on the shares of the Company's common
stock credited to the participant's account as of the record date of the
dividend. The dividends payable on the shares of the Company's common
stock credited to the account of a participant who does not elect to
receive a cash distribution are reinvested in the participant's account in
shares of the Company's common stock. Payments of the cash distributions
for dividends payable are made as soon as administratively practicable
after the payable date of the dividend, but no later than 90 days after
the end of the plan year which includes such payable date. A participant's
election to receive cash distributions of dividends payable on the
Company's common stock is revoked automatically upon his/her death.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting--The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in
the United States of America.
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------
Use of Estimates--The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires Plan management to make estimates and assumptions that
affect the reported amounts of net assets available for benefits and
changes therein. Actual results could differ from those estimates. The
Plan utilizes various investment instruments including common collective
trust funds, common and preferred stock. Investment securities, in
general, are exposed to various risks, such as interest rate, credit, and
overall market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect the amounts reported in the financial
statements.
Investment Valuation and Income Recognition--The Plan's investments are
stated at fair value. Shares of common collective trust funds are valued
at the net asset value of shares held by the Plan at year-end, as
determined by the custodian. Quoted market prices are used to value all
readily marketable securities.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date.
Administrative Expenses--The Employing Companies normally pay the
Trustee's fees and other administrative costs. Brokerage commissions,
transfer taxes, and any other expenses resulting from purchases and sales
of securities within investment funds will be charged to the various
investment funds. Commissions on individual securities traded through the
self direct option will be charged to the participant making the trade.
In addition, for Employer Matching Contributions, investment management
fees for all funds, except Company stock and Mirant Corporation stock, are
deducted from fund earnings. For participant contributions, investment
management fees for the Merrill Lynch Retirement Preservation Trust,
Merrill Lynch Equity Index Trust Tier III, and Merrill Lynch Aggregate
Bond Index Trust are paid by the Company, and investment management fees
for all other funds are deducted from fund earnings.
Payments of Benefits--Benefit payments to participants are recorded upon
distribution. Amounts allocated to accounts of persons who have elected to
withdraw from the Plan but have not yet been paid were $992,872 as of
December 31, 2003. There were no benefits payable as of December 31, 2004.
3. INVESTMENTS
The Plan's investments that represented 5% or more of the Plan's net
assets available for benefits as of December 31, 2004 and 2003 are as
follows:
2004 2003
--------------------------------------------- -----------------------------------------------
Number of Fair Number of Fair
Shares Value Shares Value
Southern Company
common stock 54,190,722 $1,816,472,996 55,874,014 $1,690,188,934
Merrill Lynch Small Cap
Index Plus Trust 12,681,849 210,265,057 11,680,352 159,203,198
Merrill Lynch Equity Index Trust
Tier III--Goal Manager 5,131,783 473,355,623 5,158,456 428,925,657
Merrill Lynch Retirement
Preservation Trust 492,836,539 492,836,539 399,549,702 399,549,702
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------
During the years ended December 31, 2004 and 2003, the Plan's investments
(including gains and losses on investments bought and sold as well as held
during the year) appreciated (depreciated) in value as follows:
2004 2003
Common stock $ 177,422,599 $ 77,607,589
Preferred stock (6,607) (13,283)
Common collective trust funds 105,002,024 162,740,288
------------- -------------
Total $ 282,418,016 $ 240,334,594
============= =============
4. RELATED-PARTY TRANSACTIONS
Certain plan investments are units of common collective trusts managed by
Merrill Lynch Investment Managers. Merrill Lynch Trust Company, FSB is the
trustee as defined by the Plan and, therefore, these transactions qualify
as party-in-interest transactions. Fees paid by the Plan for investment
management services were included as a reduction of the return earned on
each fund.
At December 31, 2004 and 2003, the Plan held 54,190,722 and 55,874,014
shares, respectively, of common stock of the Company, the sponsoring
employer, at a fair value of $1,816,472,996 and $1,690,188,934,
respectively, with a cost basis of $991,567,227 and $953,999,535,
respectively. During the years ended December 31, 2004 and 2003, the Plan
recorded related dividend income of $71,916,680 and $77,119,774,
respectively.
5. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions set forth in ERISA. In the
event that the Plan is terminated, participants are 100% vested in their
accounts.
6. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated January 31, 2003 that the Plan and related trust were
designed in accordance with the applicable regulations of the Internal
Revenue Code. The Plan has been amended since receiving the determination
letter; however, the Company and the Plan administrator believe that the
Plan is currently designed and operated in compliance with the applicable
requirements of the Internal Revenue Code, and the Plan and related trust
continue to be tax-exempt. Therefore, no provision for income taxes has
been included in the Plan's financial statements.
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THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------
7. RECONCILIATION TO FORM 5500
The net assets available for benefits of the Plan at December 31, 2003
include $992,872 for participants who had requested distributions from
their accounts but had not yet been paid at year-end. These amounts are
reflected as benefit claims payable and are included in benefit payments
to participants or beneficiaries in the Form 5500 for the Plan for the
year ended December 31, 2003. There were no benefits payable as of
December 31, 2004.
The following are reconciliations of net assets available for benefits,
benefits payable to participants, and benefits paid to participants per
the financial statements to the Form 5500 as of and for the years ended
December 31, 2004 and 2003:
2004 2003
Net assets available for benefits per the
financial statements $3,353,508,784 $2,961,661,887
Benefits payable to participants - (992,872)
-------------- --------------
Net assets available for benefits per Form 5500 $3,353,508,784 $2,960,669,015
============== ==============
Benefits paid to participants per the
financial statements $ 169,934,367 $ 140,523,971
Benefits payable to participants:
Beginning of year (992,872) (1,041,109)
End of year - 992,872
-------------- ---------------
Benefits paid to participants per Form 5500 $ 168,941,495 $ 140,475,734
============== ===============
******
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SUPPLEMENTAL SCHEDULE
(SEE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM)
- 11 -
THE SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
DECEMBER 31, 2004
--------------------------------------------------------------------------------
Description of Investment,
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Collateral, Current
Lessor, or Similar Party Par or Maturity Value Cost Value
(a) (b) (c) (d) (e)
* The Southern Company Common stock ** $ 1,816,472,996
Mirant Corporation Common stock ** 6,308,158
* Merrill Lynch Equity Index Trust Tier III Common collective trust ** 473,355,623
* Merrill Lynch Equity Index Trust Tier III--Goal Manager Common collective trust ** 53,914,378
* Merrill Lynch Retirement Preservation Trust Common collective trust ** 492,836,539
* Merrill Lynch Retirement Preservation Trust--Goal Manager Common collective trust ** 8,895,113
* Merrill Lynch Small Cap Index Plus Trust Common collective trust ** 210,265,057
* Merrill Lynch Small Cap Index Plus Trust--Goal Manager Common collective trust ** 11,312,320
* Merrill Lynch Intl. Index Plus Trust Common collective trust ** 47,982,997
* Merrill Lynch Intl. Index Plus Trust--Goal Manager Common collective trust ** 22,726,540
* Merrill Lynch Aggregate Bond Index Trust Common collective trust ** 33,401,125
* Merrill Lynch Aggregate Bond Index Trust--Goal Manager Common collective trust ** 38,185,627
* Participants Loans to participants,
with interest rates ranging 79,086,753
from 4.0% to 11.5% **
Various Self-directed accounts ** 55,676,953
---------------
Total investments $ 3,350,420,179
===============
* Party-in-interest.
** Cost information is not required for participant-directed investments and,
therefore, is not included.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, The
Southern Company Employee Savings Plan Committee has duly caused this annual
report to be signed by the undersigned hereunto duly authorized.
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
/s/Ellen N. Lindemann
Ellen N. Lindemann, Chairperson
The Southern Company Employee
Savings Plan Committee
June 22, 2005
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