Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-110950
333-110950-01
333-110950-02
333-110950-03
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 19, 2003)
$250,000,000
(ALABAMA POWER LOGO)
SERIES BB FLOATING RATE SENIOR NOTES
DUE AUGUST 25, 2009
---------------------------
This is a public offering by Alabama Power Company of $250,000,000 of
Series BB Floating Rate Senior Notes due August 25, 2009. Interest is payable
quarterly on the 25th day of February, May, August and November, beginning
November 25, 2004, and the per annum interest rate on the Series BB Senior Notes
will be reset quarterly based on the three-month LIBOR rate plus 0.19%; however,
under certain circumstances described in this Prospectus Supplement, the
interest rate on the Series BB Senior Notes will be determined without reference
to LIBOR.
Alabama Power Company may not redeem the Series BB Senior Notes prior to
maturity.
The Series BB Senior Notes should be delivered on or about August 25, 2004
through the book-entry facilities of The Depository Trust Company.
See "RISK FACTORS" beginning on page S-3 for a description of certain risks
associated with investing in the Series BB Senior Notes.
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Per Series BB
Senior Note Total
------------------------------------------------------------------------------------------
Public Offering Price....................................... 100.00% $250,000,000
Underwriting Discount....................................... 0.50% $ 1,250,000
Proceeds to Alabama Power Company........................... 99.50% $248,750,000
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---------------------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this Prospectus Supplement or the accompanying Prospectus. Any
representation to the contrary is a criminal offense.
---------------------------
JOINT BOOK-RUNNING MANAGERS
BNY CAPITAL MARKETS, INC. GOLDMAN, SACHS & CO. WACHOVIA SECURITIES
August 19, 2004
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this Prospectus Supplement and the
attached Prospectus. We have not, and the underwriters have not, authorized
anyone to provide you with any other information. If you receive any
unauthorized information, you must not rely on it.
We and the Underwriters are offering to sell the Series BB Senior Notes
only in places where sales are permitted.
You should not assume that the information contained or incorporated by
reference in this Prospectus Supplement or the attached Prospectus is accurate
as of any date other than its respective date.
----------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Risk Factors S-3
The Company S-3
Selected Financial Information S-3
Use of Proceeds S-4
Description of the Series BB Senior
Notes S-4
Underwriting S-8
Experts S-9
PAGE
----
PROSPECTUS
About this Prospectus 2
Risk Factors 2
Available Information 2
Incorporation of Certain Documents by
Reference 3
Selected Information 4
Alabama Power Company 4
The Trusts 5
Use of Proceeds 6
Description of the New Bonds 6
Description of the New Stock 9
Description of the Senior Notes 11
Description of the Junior Subordinated
Notes 14
Description of the Preferred
Securities 20
Description of the Guarantees 20
Relationship Among the Preferred
Securities, the Junior Subordinated
Notes and the Guarantees 23
Plan of Distribution 24
Legal Matters 25
Experts 25
S-2
RISK FACTORS
Investing in the Series BB Senior Notes involves risk. Please see the risk
factors in Alabama Power Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2003, along with disclosure related to risk factors
contained in Alabama Power Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2004 and June 30, 2004, which are all incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus. Before
making an investment decision, you should carefully consider these risks as well
as other information contained or incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus. The risks and uncertainties not
presently known to Alabama Power Company or that Alabama Power Company currently
deems immaterial may also impair its business operations, its financial results
and the value of the Series BB Senior Notes.
THE COMPANY
Alabama Power Company (the "Company") is a corporation organized under the
laws of the State of Alabama on November 10, 1927, by the consolidation of a
predecessor Alabama Power Company, Gulf Electric Company and Houston Power
Company. The Company has its principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205) 257-1000. The Company is a wholly
owned subsidiary of The Southern Company ("Southern").
The Company is a regulated public utility engaged in the generation,
transmission, distribution and sale of electric energy within an approximately
44,500 square mile service area comprising most of the State of Alabama.
SELECTED FINANCIAL INFORMATION
The following selected financial information for the years ended December
31, 1999 through December 31, 2003 has been derived from the Company's audited
financial statements and related notes and the unaudited selected financial
data, incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus. The following selected financial information for the
six months ended June 30, 2004 has been derived from the Company's unaudited
financial statements and related notes, incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus. The information set forth
below is qualified in its entirety by reference to and, therefore, should be
read together with management's discussion and analysis of results of operations
and financial condition, the financial statements and related notes and other
financial information incorporated by reference in this Prospectus Supplement
and the accompanying Prospectus.
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------------ JUNE 30,
1999 2000 2001 2002 2003 2004(1)
------ ------ ------ ------ ------ ----------
(MILLIONS, EXCEPT RATIOS)
Operating Revenues.......................... $3,385 $3,667 $3,586 $3,711 $3,960 $2,019
Earnings Before Income Taxes................ 658 698 650 768 781 336
Net Income After Dividends on Preferred
Stock..................................... 400 420 387 461 473 195
Ratio of Earnings to Fixed Charges(2)....... 3.59 3.46 3.31 3.98 4.29 3.94
CAPITALIZATION
AS OF JUNE 30, 2004
-------------------------------
ACTUAL AS ADJUSTED(3)
------ ----------------------
(MILLIONS, EXCEPT PERCENTAGES)
Common Stock Equity......................................... $3,513 $3,533 43.6%
Cumulative Preferred Stock.................................. 473 473 5.8
Senior Notes................................................ 2,975 3,225 39.8
Long-term Debt Payable to Affiliated Trusts................. 309 309 3.8
Other Long-Term Debt........................................ 555 555 7.0
------ ------ -----
Total, excluding amounts due within one year of $525
million................................................ $7,825 $8,095 100.0%
====== ====== =====
---------------
(1) Due to the seasonal variations in the demand for energy, operating results
for the six months ended June 30, 2004 do not necessarily indicate operating
results for the entire year.
S-3
(2) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Earnings Before Income Taxes" "Interest expense, net of amounts
capitalized," "Interest expense to affiliate trusts," "Distributions on
mandatorily redeemable preferred securities" and the debt portion of
allowance for funds used during construction; and (ii) "Fixed Charges"
consist of "Interest expense, net of amounts capitalized," "Interest expense
to affiliate trusts," "Distributions on mandatorily redeemable preferred
securities" and the debt portion of allowance for funds used during
construction.
(3) Reflects (i) the proposed issuance in August 2004 of 500,000 shares of
common stock to Southern at $40.00 per share; and (ii) the issuance of the
Series BB Senior Notes.
USE OF PROCEEDS
The proceeds from the sale of the Series BB Senior Notes will be applied by
the Company to repay a portion of its outstanding short-term indebtedness, which
aggregated approximately $140,000,000 as of August 19, 2004, and for other
general corporate purposes, including the Company's continuous construction
program.
DESCRIPTION OF THE SERIES BB SENIOR NOTES
Set forth below is a description of the specific terms of the Series BB
Floating Rate Senior Notes due August 25, 2009 (the "Series BB Senior Notes").
This description supplements and should be read together with the description of
the general terms and provisions of the senior notes set forth in the
accompanying Prospectus under the caption "Description of the Senior Notes." The
following description does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the description in the accompanying
Prospectus and the Senior Note Indenture (the "Senior Note Indenture") dated as
of December 1, 1997, as supplemented, between the Company and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as trustee (the "Senior Note
Indenture Trustee").
GENERAL
The Series BB Senior Notes will be issued as a series of senior notes under
the Senior Note Indenture. The Series BB Senior Notes will be initially issued
in the aggregate principal amount of $250,000,000. The Company may, without the
consent of the holders of the Series BB Senior Notes, issue additional notes
having the same ranking and interest rate, maturity and other terms (except for
the issue price and issue date) as the Series BB Senior Notes. Any additional
notes having such similar terms, together with the Series BB Senior Notes, will
constitute a single series of senior notes under the Senior Note Indenture.
The entire principal amount of the Series BB Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on August 25, 2009. The Series BB Senior Notes are not subject to any sinking
fund provision. The Series BB Senior Notes are available for purchase in
denominations of $1,000 and any integral multiple thereof.
INTEREST
Each Series BB Senior Note shall bear interest from the date of original
issuance, payable quarterly in arrears on February 25, May 25, August 25 and
November 25, as applicable, to the person in whose name such Series BB Senior
Note is registered at the close of business on the fifteenth calendar day prior
to such payment date, whether or not a Business Day. The initial interest
payment date for the Series BB Senior Notes is November 25, 2004. The amount of
interest payable will be computed on the basis of the actual number of days
elapsed over a 360-day year. If any interest payment date for the Series BB
Senior Notes would otherwise be a day that is not a Business Day, the interest
payment date will be the next succeeding Business Day, except that if such
Business Day is in the next calendar month, such interest payment date shall be
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
The Series BB Senior Notes will bear interest for each quarterly Interest
Period at a per annum rate determined by the Calculation Agent, subject to the
maximum interest rate permitted by New York or other applicable state law, as
such law may be modified by United States law of general application. The
interest rate applicable during each quarterly Interest Period will be equal to
LIBOR on the Interest Determination
S-4
Date for such Interest Period plus 0.19%; provided, however, that in certain
circumstances described below, the interest rate will be determined without
reference to LIBOR. Promptly upon such determination, the Calculation Agent will
notify the Company and the Senior Note Indenture Trustee, if the Senior Note
Indenture Trustee is not then serving as the Calculation Agent, of the interest
rate for the new Interest Period. The interest rate determined by the
Calculation Agent, absent manifest error, shall be binding and conclusive upon
the beneficial owners and holders of the Series BB Senior Notes, the Company and
the Senior Note Indenture Trustee.
If the following circumstances exist on any Interest Determination Date,
the Calculation Agent shall determine the interest rate for the Series BB Senior
Notes as follows:
(1) In the event no Reported Rate appears on Telerate Page 3750 as of
approximately 11:00 a.m., London time, on an Interest Determination Date,
the Calculation Agent shall request the principal London offices of each of
four major banks in the London interbank market selected by the Calculation
Agent (after consultation with the Company) to provide a quotation of the
rate (the "Rate Quotation") at which three-month U.S. dollar deposits in
amounts of not less than $1,000,000 are offered by it to prime banks in the
London interbank market, as of approximately 11:00 a.m., London time, on
such Interest Determination Date, that is representative of single
transactions at such time (the "Representative Amounts"). If at least two
Rate Quotations are provided, the interest rate will be the arithmetic mean
of the Rate Quotations obtained by the Calculation Agent, plus 0.19%.
(2) In the event no Reported Rate appears on Telerate Page 3750 as of
approximately 11:00 a.m., London time, on an Interest Determination Date
and there are fewer than two Rate Quotations, the interest rate will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York
City time, on such Interest Determination Date, by three major banks in New
York City selected by the Calculation Agent (after consultation with the
Company), for loans in Representative Amounts in U.S. dollars to leading
European banks, having a maturity of three months for a period commencing
on the second London Business Day immediately following such Interest
Determination Date, plus 0.19%; provided, however, that if fewer than three
banks selected by the Calculation Agent are quoting such rates, the
interest rate for the applicable Interest Period will be the same as the
interest rate in effect for the immediately preceding Interest Period.
Upon the request of a holder of the Series BB Senior Notes, the Calculation
Agent will provide to such holder the interest rate in effect on the date of
such request and, if determined, the interest rate for the next Interest Period.
The following definitions apply to the Series BB Senior Notes:
"Business Day" means a day other than (i) a Saturday or Sunday, (ii) a day
on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed, or (iii) a day on which the Senior Note
Indenture Trustee's corporate trust office is closed for business.
"Calculation Agent" means JPMorgan Chase Bank, or its successor appointed
by the Company, acting as calculation agent.
"Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.
"Interest Period" means the period commencing on an interest payment date
for the Series BB Senior Notes (or, with respect to the initial Interest Period
only, commencing on the issue date for the Series BB Senior Notes) and ending on
the day before the next succeeding interest payment date for the Series BB
Senior Notes.
"LIBOR" for any Interest Determination Date will be the offered rate for
deposits in U.S. dollars having a maturity of three months for a period
commencing on the second London Business Day immediately following the Interest
Determination Date in amounts of not less than $1,000,000 as such rate appears
on Telerate Page 3750 at approximately 11:00 a.m., London time, on the Interest
Determination Date (the "Reported Rate").
"London Business Day" means a day that is a Business Day and a day on which
dealings in deposits in U.S. dollars are transacted, or with respect to any
future date are expected to be transacted, in the London interbank market.
S-5
"Telerate Page 3750" means the display designated on page 3750 on Moneyline
Telerate, Inc. (or such other page as may replace the 3750 page on that service
or such other service as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for U.S. dollar
deposits).
RANKING
The Series BB Senior Notes will be direct, unsecured and unsubordinated
obligations of the Company and will rank equally with all other unsecured and
unsubordinated obligations of the Company. The Series BB Senior Notes will be
effectively subordinated to all secured debt of the Company, including its first
mortgage bonds, aggregating approximately $286,000,000 outstanding at June 30,
2004. The Senior Note Indenture contains no restrictions on the amount of
additional indebtedness that may be incurred by the Company.
REDEMPTION
The Series BB Senior Notes will not be redeemable at the option of the
Company prior to maturity.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depository for the Series BB Senior Notes. The Series BB Senior Notes will be
issued only as fully registered securities registered in the name of Cede & Co.,
DTC's nominee or such other name as may be requested by an authorized
representative of DTC. One or more fully registered global Series BB Senior
Notes certificates will be issued, representing in the aggregate the total
principal amount of the Series BB Senior Notes, and will be deposited with the
Senior Note Indenture Trustee on behalf of DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds and provides asset servicing for over 2
million issues of U.S. and non-U.S. equity issues, corporate and municipal debt
issues and money market instruments from over 85 countries that DTC's
participants ("Direct Participants") deposit with DTC. DTC also facilitates the
post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants' accounts. This eliminates the
need for physical movement of securities certificates. Direct Participants
include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC").
DTCC, in turn, is owned by a number of Direct Participants of DTC and members of
the National Securities Clearing Corporation, Government Securities Clearing
Corporation, MBS Clearing Corporation and Emerging Markets Clearing Corporation
(NSCC, GSCC, MBSCC and EMCC, also subsidiaries of DTCC), as well as by the New
York Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies and clearing corporations that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The DTC rules applicable to its Direct and
Indirect Participants are on file with the Securities and Exchange Commission.
More information about DTC can be found at www.dtcc.com.
Purchases of Series BB Senior Notes under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series BB
Senior Notes on DTC's records. The ownership interest of each actual purchaser
of Series BB Senior Notes ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Series BB Senior
Notes. Transfers of ownership interests in the Series BB Senior Notes are to be
accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Series BB Senior Notes,
except in the event that use of the book-entry system for the Series BB Senior
Notes is discontinued.
S-6
To facilitate subsequent transfers, all Series BB Senior Notes deposited by
Direct Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Series BB Senior Notes with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect
any changes in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Series BB Senior Notes. DTC's records reflect only the
identity of the Direct Participants to whose accounts such Series BB Senior
Notes are credited, which may or may not be the Beneficial Owners. The Direct
and Indirect Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Although voting with respect to the Series BB Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. (nor any other
DTC nominee) will consent or vote with respect to Series BB Senior Notes. Under
its usual procedures, DTC mails an Omnibus Proxy to the Company as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Series BB Senior Notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Payments on the Series BB Senior Notes will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts upon DTC's receipt of funds
and corresponding detail information from the Company or the Senior Note
Indenture Trustee on the relevant payment date in accordance with their
respective holdings shown on DTC's records. Payments by Direct or Indirect
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers registered in "street name," and will be the responsibility of such
Direct or Indirect Participant and not of DTC or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment to Cede & Co. (or such other nominee as may be requested by an
authorized representative of DTC) is the responsibility of the Company,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner of a global Series BB Senior
Note will not be entitled to receive physical delivery of Series BB Senior
Notes. Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Series BB Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series BB Senior Note.
DTC may discontinue providing its services as securities depository with
respect to the Series BB Senior Notes at any time by giving reasonable notice to
the Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Series BB Senior Notes certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor securities depository) with respect to the Series BB Senior Notes. The
Company understands, however, that under current industry practices, DTC would
notify its Direct and Indirect Participants of the Company's decision, but will
only withdraw beneficial interests from a global Series BB Senior Note at the
request of each Direct or Indirect Participant. In that event, certificates for
the Series BB Senior Notes will be printed and delivered to the applicable
Direct or Indirect Participant.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Direct or Indirect Participants
of their respective obligations as described herein or under the rules and
procedures governing their respective operations.
S-7
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement (the
"Underwriting Agreement") dated the date hereof, the Company has agreed to sell
to the underwriters named below (the "Underwriters") and each of the
Underwriters has severally agreed to purchase from the Company the principal
amount of the Series BB Senior Notes set forth opposite its name below:
PRINCIPAL AMOUNT OF
SERIES BB SENIOR
NAME NOTES
---- -------------------
BNY Capital Markets, Inc. .................................. $ 83,333,000
Goldman, Sachs & Co. ....................................... 83,333,000
Wachovia Capital Markets, LLC .............................. 83,334,000
------------
Total............................................. $250,000,000
============
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Series BB Senior
Notes offered hereby if any of the Series BB Senior Notes are purchased.
The Underwriters propose to offer the Series BB Senior Notes directly to
the public at the public offering price set forth on the cover page of this
Prospectus Supplement, and may offer them to certain securities dealers at such
price less a concession not in excess of 0.30% of the principal amount per
Series BB Senior Note. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of 0.25% of the principal amount per Series BB Senior
Note to certain brokers and dealers. After the Series BB Senior Notes are
released for sale to the public, the public offering price and other selling
terms may from time to time be varied by the Underwriters.
It is expected that delivery of the Series BB Senior Notes will be made,
against payment for the Series BB Senior Notes, on or about August 25, 2004,
which will be the fourth business day following the date of pricing of the
Series BB Senior Notes. Under Rule 15c6-1 under the Securities Exchange Act of
1934, as amended, purchases or sales of securities in the secondary market
generally are required to settle within three business days (T+3), unless the
parties to any such transactions expressly agree otherwise. Accordingly,
purchasers of the Series BB Senior Notes who wish to trade the Series BB Senior
Notes on the date of this Prospectus Supplement will be required, because the
Series BB Senior Notes initially will settle within four business days (T+4), to
specify an alternate settlement cycle at the time of any such trade to prevent a
failed settlement. Purchasers of the Series BB Senior Notes who wish to trade on
the date of this Prospectus Supplement should consult their own legal advisors.
Prior to this offering, there has been no public market for the Series BB
Senior Notes. The Underwriters have advised the Company that they intend to make
a market in the Series BB Senior Notes. The Underwriters will have no obligation
to make a market in the Series BB Senior Notes, however, and may cease market
making activities, if commenced, at any time.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "1933 Act").
The Company's expenses associated with the offer and sale of the Series BB
Senior Notes are estimated to be $310,000.
The Company has agreed with the Underwriters, that during the period of 15
days from the date of the Underwriting Agreement, it will not sell, offer to
sell, grant any option for the sale of, or otherwise dispose of any Series BB
Senior Notes, any security convertible into, exchangeable into or exercisable
for the Series BB Senior Notes or any debt securities substantially similar to
the Series BB Senior Notes without the prior written consent of the
Underwriters. This agreement does not apply to issuances of commercial paper or
other debt securities with scheduled maturities of less than one year.
S-8
In order to facilitate the offering of the Series BB Senior Notes, the
Underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the Series BB Senior Notes. Specifically, the Underwriters
may over-allot in connection with the offering, creating short positions in the
Series BB Senior Notes for their own accounts. In addition, to cover
over-allotments or to stabilize the price of the Series BB Senior Notes, the
Underwriters may bid for, and purchase, Series BB Senior Notes in the open
market. The Underwriters may reclaim selling concessions allowed to an
Underwriter or dealer for distributing Series BB Senior Notes in the offering,
if the Underwriters repurchase previously distributed Series BB Senior Notes in
transactions to cover short positions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price of
the Series BB Senior Notes above independent market levels. The Underwriters are
not required to engage in these activities, and may end any of these activities
at any time.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Series BB Senior Notes. In
addition, neither the Company nor the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions once
commenced will not be discontinued without notice.
The Underwriters and their affiliates engage in transactions with, and,
from time to time, have performed investment banking and/or commercial banking
services for, the Company and its affiliates in the ordinary course of business
and may do so in the future.
EXPERTS
The Company's financial statements and the related financial statement
schedule as of and for the years ended December 31, 2003 and 2002 incorporated
by reference in this Prospectus Supplement have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their
reports (which report on the financial statements expresses an unqualified
opinion and includes an explanatory paragraph referring to the Company's change
in its method of accounting for asset retirement obligations), which are
incorporated in this Prospectus Supplement by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
Certain of the Company's financial statements incorporated by reference in
this Prospectus Supplement have been audited by Arthur Andersen LLP
("Andersen"), independent public accountants, as indicated in their reports with
respect to the financial statements, and are incorporated in this Prospectus
Supplement, in reliance upon the authority of Andersen as experts in giving such
reports. On March 28, 2002, Southern's Board of Directors, upon recommendation
of its Audit Committee, decided not to engage Andersen as the Company's
principal public accountants. The Company has not obtained a reissued report
from Andersen and has been unable to obtain, after reasonable efforts,
Andersen's written consent to incorporate by reference Andersen's reports on the
financial statements. Under these circumstances, Rule 437a under the 1933 Act
permits this Prospectus Supplement to be filed without a written consent from
Andersen. The absence of such written consent from Andersen may limit a holder's
ability to assert claims against Andersen under Section 11(a) of the 1933 Act
for any untrue statement of a material fact contained in the financial
statements audited by Andersen or any omissions to state a material fact
required to be stated in the financial statements.
S-9
$250,000,000
(ALABAMA POWER LOGO)
SERIES BB FLOATING RATE SENIOR NOTES
DUE AUGUST 25, 2009
---------------------------
PROSPECTUS SUPPLEMENT
August 19, 2004
---------------------------
BNY CAPITAL MARKETS, INC. GOLDMAN, SACHS & CO. WACHOVIA SECURITIES