6. FINANCING

Long-Term Debt Payable to Affiliated Trusts

Certain of the traditional operating companies formed certain wholly-owned trust subsidiaries for the purpose of issuing preferred securities. The proceeds of the related equity investments and preferred security sales were loaned back to the applicable traditional operating company through the issuance of junior subordinated notes totaling $206 million as of December 31, 2011 and $412 million as of December 31, 2010, which constitute substantially all of the assets of these trusts and are reflected in the balance sheets as long-term debt. Each traditional operating company considers that the mechanisms and obligations relating to the preferred securities issued for its benefit, taken together, constitute a full and unconditional guarantee by it of the respective trust’s payment obligations with respect to these securities. At December 31, 2011 and 2010, trust preferred securities of $200 million and $400 million, respectively, were outstanding. See Note 1 under “Variable Interest Entities” for additional information on the accounting treatment for these trusts and the related securities.

Securities Due Within One Year

A summary of scheduled maturities and redemptions of securities due within one year at December 31 was as follows:


	2011		2010

	(in millions)

Pollution control revenue bonds	$	—	$	8
Capitalized leases		24		23
Senior notes		1,200		600
Other long-term debt		493		670

Total	$	1,717	$	1,301

Maturities through 2016 applicable to total long-term debt are as follows: $1.7 billion in 2012; $2.1 billion in 2013; $449 million in 2014; $1.2 billion in 2015; and $1.2 billion in 2016.

Bank Term Loans

Certain of the traditional operating companies have entered into various floating rate bank term loan agreements for loans bearing interest based on one-month London Interbank Offered Rate (LIBOR). At December 31, 2011 and 2010, certain of the traditional operating companies (Georgia Power and Mississippi Power) had outstanding bank term loans totaling $690 million and $615 million, respectively. During 2011, Georgia Power entered into $250 million aggregate principal amount of long-term bank loans and $200 million aggregate principal amount of short-term bank loans. Also during 2011, Mississippi Power entered into $240 million aggregate principal amount of long-term bank loans. The proceeds of these loans were used to repay maturing long-term and short-term indebtedness and for other general corporate purposes, including the applicable subsidiary’s continuous construction program.

Subsequent to December 31, 2011, Georgia Power entered into a floating rate six-month short-term bank loan in an aggregate principal amount of $100 million bearing interest based on one-month LIBOR.

These bank loans have covenants that limit debt levels to 65% of total capitalization, as defined in the agreements. For purposes of these definitions, debt excludes the long-term debt payable to affiliated trusts and other hybrid securities. At December 31, 2011, Georgia Power and Mississippi Power were each in compliance with their respective debt limits.

In addition, these bank loans contain cross default provisions that would be triggered if the borrower defaulted on other indebtedness above a specified threshold. The cross default provisions are restricted to the indebtedness, including any guarantee obligations, of the company that has such bank loans. Georgia Power and Mississippi Power are currently in compliance with all such covenants.

Senior Notes

Southern Company and its subsidiaries issued a total of $2.8 billion of senior notes in 2011. Southern Company issued $500 million, and the traditional operating companies’ and Southern Power’s combined issuances totaled $2.3 billion. The proceeds of these issuances were used to repay long-term and short-term indebtedness, to fund acquisitions, and for other general corporate purposes, including the applicable subsidiary’s continuous construction program.

At December 31, 2011 and 2010, Southern Company and its subsidiaries had a total of $15.9 billion and $15.2 billion, respectively, of senior notes outstanding. At December 31, 2011 and 2010, Southern Company had a total of $1.8 billion and $1.6 billion, respectively, of senior notes outstanding.

Subsequent to December 31, 2011, Southern Company’s $500 million aggregate principal amount of Series 2007A 5.30% Senior Notes matured.

Subsequent to December 31, 2011, Alabama Power issued $250 million aggregate principal amount of Series 2012A 4.10% Senior Notes due January 15, 2042. The proceeds were used for general corporate purposes, including Alabama Power’s continuous construction program.

Subsequent to December 31, 2011, Alabama Power announced the redemption of $250 million aggregate principal amount of its Series 2007B 5.875% Senior Notes due April 1, 2047 that will occur on April 2, 2012.

Pollution Control Revenue Bonds

Pollution control obligations represent loans to the traditional operating companies from public authorities of funds derived from sales by such authorities of revenue bonds issued to finance pollution control and solid waste disposal facilities. The traditional operating companies had $3.4 billion and $3.1 billion of outstanding pollution control revenue bonds at December 31, 2011 and 2010, respectively. The traditional operating companies are required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. Proceeds from certain issuances are restricted until qualifying expenditures are incurred.

Subsequent to December 31, 2011, Alabama Power announced the redemption of approximately $1 million aggregate principal amount of The Industrial Development Board of the Town of West Jefferson Solid Waste Disposal Revenue Bonds (Alabama Power Company Miller Plant Project), Series 2008 that will occur on March 12, 2012.

Plant Daniel Revenue Bonds

In October 2011, in connection with Mississippi Power’s election under its operating lease of Plant Daniel Units 3 and 4 to purchase the assets, Mississippi Power assumed the obligations of the lessor related to $270 million aggregate principal amount of Mississippi Business Finance Corporation Taxable Revenue Bonds, 7.13% Series 1999A due October 21, 2021, issued for the benefit of the lessor. See Note 1 under “Property, Plant, and Equipment” and “Assets Subject to Lien” herein for additional information.

Other Revenue Bonds

Other revenue bond obligations represent loans to Mississippi Power from a public authority of funds derived from the sale by such authority of revenue bonds. Mississippi Power had $50 million and $100 million of such obligations outstanding at December 31, 2011 and 2010, respectively. Such amounts are reflected in the statements of capitalization as long-term senior notes and debt.

Assets Subject to Lien

Each of Southern Company’s subsidiaries is organized as a legal entity, separate and apart from Southern Company and its other subsidiaries. Alabama Power and Gulf Power have granted one or more liens on certain of their respective property in connection with the issuance of certain pollution control revenue bonds with an outstanding principal amount of $194 million. There are no agreements or other arrangements among the Southern Company system companies under which the assets of one company have been pledged or otherwise made available to satisfy obligations of Southern Company or any of its other subsidiaries.

On October 20, 2011, Mississippi Power purchased Plant Daniel Units 3 and 4 for approximately $85 million in cash and the assumption of $270 million face value (with a fair value on the assumption date of $346 million) of debt obligations of the lessor related to Plant Daniel Units 3 and 4, which mature in 2021 and bear interest at a fixed stated interest rate of 7.13% per annum. These obligations are secured by Plant Daniel Units 3 and 4 and certain personal property. See Note 1 under “Property, Plant, and Equipment” for additional information.

Bank Credit Arrangements

At December 31, 2011, committed credit arrangements with banks were as follows:


	Expires^(a)												Due Within One Year				Executable Term-Loans
Company	2012		2013		2014		2016		Total		Unused		Term Out		No Term Out		One Year		Two Years

	(in millions)								(in millions)				(in millions)				(in millions)

Southern Company	$	—	$	—	$	—	$	1,000	$	1,000	$	1,000	$	—	$	—	$	—	$	—
Alabama Power		121		35		350		800		1,306		1,306		51		71		51		—
Georgia Power		—		—		250		1,500		1,750		1,745		—		—		—		—
Gulf Power		75		—		165		—		240		240		75		—		75		—
Mississippi Power		131		—		165		—		296		296		66		65		25		41
Southern Power		—		—		—		500		500		500		—		—		—		—
Other		25		25		—		—		50		50		25		—		25		—

Total	$	352	$	60	$	930	$	3,800	$	5,142	$	5,137	$	217	$	136	$	176	$	41

(a)	No credit arrangements expire in 2015.

Most of the credit arrangements require payment of commitment fees based on the unused portion of the commitments or the maintenance of compensating balances with the banks. Commitment fees average approximately ¹/4 of 1% or less for Southern Company, the traditional operating companies, and Southern Power. Compensating balances are not legally restricted from withdrawal.

Most of the credit arrangements with banks have covenants that limit debt levels to 65% of total capitalization, as defined in the agreements. For purposes of these definitions, debt excludes the long-term debt payable to affiliated trusts and, in certain arrangements, other hybrid securities. At December 31, 2011, Southern Company, the traditional operating companies, and Southern Power were each in compliance with their respective debt limit covenants.

In addition, certain credit arrangements contain cross default provisions to other indebtedness that would trigger an event of default if the applicable borrower defaulted on indebtedness over a specified threshold. The cross default provisions are restricted only to the indebtedness, including any guarantee obligations, of the company that has such credit arrangements. Southern Company, the traditional operating companies, and Southern Power are currently in compliance with all such covenants.

A portion of the $5.1 billion unused credit with banks is allocated to provide liquidity support to the traditional operating companies’ variable rate pollution control revenue bonds and commercial paper programs. The amount of variable rate pollution control revenue bonds requiring liquidity support as of December 31, 2011 was approximately $1.8 billion.

Southern Company, the traditional operating companies, and Southern Power make short-term borrowings primarily through commercial paper programs that have the liquidity support of committed bank credit arrangements. Southern Company, the traditional operating companies, and Southern Power may also borrow through various other arrangements with banks. Commercial paper and short-term bank loans are included in notes payable in the balance sheets.

Details of short-term borrowings, excluding notes payable related to other energy service contracts, were as follows:


	Short-term Debt at the End of the Period			Short-term Debt During the Period^(a)
	Amount Outstanding		Weighted Average Interest Rate	Average Outstanding		Weighted Average Interest Rate	Maximum Amount Outstanding

	(in millions)			(in millions)			(in millions)
December 31, 2011:
Commercial paper		$654	0.28%		$697	0.29%		$1,586
Short-term bank debt		200	1.18%		14	1.21%		200

Total		$854	0.49%		$711	0.32%

December 31, 2010:
Commercial paper		$1,295	0.32%		$690	0.29%		$1,305

(a)	Average and maximum amounts are based upon daily balances during the period.

Redeemable Preferred Stock of Subsidiaries

Each of the traditional operating companies has issued preferred and/or preference stock. The preferred stock of Alabama Power and Mississippi Power contains a feature that allows the holders to elect a majority of such subsidiary’s board of directors if dividends are not paid for four consecutive quarters. Because such a potential redemption-triggering event is not solely within the control of Alabama Power and Mississippi Power, this preferred stock is presented as “Redeemable Preferred Stock of Subsidiaries” in a manner consistent with temporary equity under applicable accounting standards. The preferred and preference stock at Georgia Power and the preference stock at Alabama Power and Gulf Power do not contain such a provision that would allow the holders to elect a majority of such subsidiary’s board. As a result, under applicable accounting standards, the preferred and preference stock at Georgia Power and the preference stock at Alabama Power and Gulf Power are required to be shown as “noncontrolling interest,” separately presented as a component of “Stockholders’ Equity” on Southern Company’s balance sheets, statements of capitalization, and statements of stockholders’ equity.

There were no changes for the years ended December 31, 2011, 2010, and 2009 in redeemable preferred stock of subsidiaries for Southern Company.

FINANCING

6. FINANCING

Long-Term Debt Payable to an Affiliated Trust

The Company has formed a wholly-owned trust subsidiary for the purpose of issuing preferred securities. The proceeds of the related equity investments and preferred security sales were loaned back to the Company through the issuance of junior subordinated notes totaling $206 million as of December 31, 2011 and December 31, 2010, which constitute substantially all of the assets of this trust and are reflected in the balance sheets as long-term debt payable. The Company considers that the mechanisms and obligations relating to the preferred securities issued for its benefit, taken together, constitute a full and unconditional guarantee by it of the trust’s payment obligations with respect to these securities. At December 31, 2011 and 2010, trust preferred securities of $200 million were outstanding. See Note 1 under “Variable Interest Entity” for additional information on the accounting treatment for this trust and the related securities.

Securities Due Within One Year

At December 31, 2011 and 2010, the Company had scheduled maturities of senior notes due within one year totaling $500 million and $200 million, respectively.

Maturities of senior notes and pollution control revenue bonds through 2016 applicable to total long-term debt are as follows: $500 million in 2012; $250 million in 2013; $54 million in 2015; and $200 million in 2016. There are no scheduled maturities in 2014.

Pollution Control Revenue Bonds

Pollution control obligations represent loans to the Company from public authorities of funds or installment purchases of solid waste disposal facilities financed by funds derived from sales by public authorities of revenue bonds. The Company is required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. The Company incurred no obligations related to the issuance of pollution control revenue bonds in 2011. In 2011, the Company redeemed approximately $4 million of The Industrial Development Board of the Town of Wilsonville Solid Waste Disposal Revenue Bonds (Plant Gaston), Series 2008. The amount of tax-exempt pollution control revenue bonds outstanding at both December 31, 2011 and 2010 was $1.2 billion. Proceeds from certain issuances are restricted until qualifying expenditures are incurred.

Subsequent to December 31, 2011, the Company announced the redemption of approximately $1 million aggregate principal amount of The Industrial Development Board of the Town of West Jefferson Solid Waste Disposal Revenue Bonds (Alabama Power Company Miller Plant Project), Series 2008 that will occur on March 12, 2012.

Senior Notes

The Company issued a total of $700 million of unsecured senior notes in 2011. The proceeds of these issuances were used for general corporate purposes, including the Company’s continuous construction program, and to redeem $100 million aggregate principal amount of the Series GG 5-7/8% Senior Notes due February 1, 2046, $200 million aggregate principal amount of the Series II 5.875% Senior Notes due March 15, 2046, $150 million aggregate principal amount of the Series JJ 6.375% Senior Notes due June 15, 2046.

Also during 2011, the Company redeemed approximately $100 million aggregate principal amount of Series EE 5.75% Senior Notes due January 15, 2036.

At both December 31, 2011 and 2010, the Company had $4.8 billion of senior notes outstanding. These senior notes are effectively subordinate to all secured debt of the Company which amounted to approximately $153 million at December 31, 2011.

Subsequent to December 31, 2011, the Company issued $250 million aggregate principal amount of Series 2012A 4.10% Senior Notes due January 15, 2042. The proceeds were used for general corporate purposes, including the Company’s continuous construction program.

Subsequent to December 31, 2011, the Company announced the redemption of $250 million aggregate principal amount of its Series 2007B 5.875% Senior Notes due April 1, 2047 that will occur on April 2, 2012.

Preferred, Preference, and Common Stock

In 2011, the Company issued no new shares of preferred stock, preference stock, or common stock.

Outstanding Classes of Capital Stock

The Company currently has preferred stock, Class A preferred stock, preference stock, and common stock authorized and outstanding. The Company’s preferred stock and Class A preferred stock, without preference between classes, rank senior to the Company’s preference stock and common stock with respect to payment of dividends and voluntary and involuntary dissolution. The preferred stock and Class A preferred stock of the Company contain a feature that allows the holders to elect a majority of the Company’s board of directors if dividends are not paid for four consecutive quarters. Because such a potential redemption-triggering event is not solely within the control of the Company, the preferred stock and Class A preferred stock is presented as “Redeemable Preferred Stock” in a manner consistent with temporary equity under applicable accounting standards. The preference stock does not contain such a provision that would allow the holders to elect a majority of the Company’s board. The Company’s preference stock ranks senior to the common stock with respect to the payment of dividends and voluntary or involuntary dissolution.

The Company’s preferred stock is subject to redemption at a price equal to the par value plus a premium. The Company’s Class A preferred stock is subject to redemption at a price equal to the stated capital. Certain series of the Company’s preference stock are subject to redemption at a price equal to the stated capital plus a make-whole premium based on the present value of the liquidation amount and future dividends to the first stated capital redemption date and the other series of preference stock are subject to redemption at a price equal to the stated capital. Certain series of the Company’s preferred stock are subject to redemption at the option of the Company on or after a specified date. Information for each outstanding series is in the table below:


Preferred/Preference Stock	Par Value/Stated Capital Per Share	Shares Outstanding		First Call Date	Redemption Price Per Share

4.92% Preferred Stock	$100		80,000	*	$103.23
4.72% Preferred Stock	$100		50,000	*	$102.18
4.64% Preferred Stock	$100		60,000	*	$103.14
4.60% Preferred Stock	$100		100,000	*	$104.20
4.52% Preferred Stock	$100		50,000	*	$102.93
4.20% Preferred Stock	$100		135,115	*	$105.00
5.83% Class A Preferred Stock	$ 25		1,520,000	08/1/2008	Stated Capital
5.20% Class A Preferred Stock	$ 25		6,480,000	08/1/2008	Stated Capital
5.30% Class A Preferred Stock	$ 25		4,000,000	04/1/2009	Stated Capital
5.625% Preference Stock	$ 25		6,000,000	01/1/2012	Stated Capital
6.450% Preference Stock	$ 25		6,000,000	*	**
6.500% Preference Stock	$ 25		2,000,000	*	**

*	Redemption permitted any time after issuance

**	Prior to 10/01/2017: Stated Value Plus Make-Whole Premium; After 10/01/2017: Stated Capital

Dividend Restrictions

The Company can only pay dividends to Southern Company out of retained earnings or paid-in-capital.

Assets Subject to Lien

The Company has granted liens on certain property in connection with the issuance of certain series of pollution control revenue bonds with an outstanding principal amount of $153 million as of December 31, 2011. There are no agreements or other arrangements among the Southern Company system companies under which the assets of one company have been pledged or otherwise made available to satisfy obligations of Southern Company or any of its other subsidiaries.

Bank Credit Arrangements

At December 31, 2011, committed credit arrangements with banks were as follows:


Expires^(a)										Executable Term-Loans

2012		2013	2014		2016		Total	Unused		One Year	Two Years

			(in millions)
	$121	$35	$	350	$	800	$1,306	$	1,306	$51	$—

(a)	No credit arrangements expire in 2015.

A portion of the unused credit with banks is allocated to provide liquidity support to the Company’s variable rate pollution control revenue bonds and commercial paper program. During 2011, the Company remarketed $120 million of pollution control revenue bonds. The amount of variable rate pollution control revenue bonds requiring liquidity support is $794 million as of December 31, 2011.

Most of the credit arrangements require payment of a commitment fee based on the unused portion of the commitment or the maintenance of compensating balances with the banks. Commitment fees average less than ¹/4 of 1% for the Company. Compensating balances are not legally restricted from withdrawal.

Most of the Company’s credit arrangements with banks have covenants that limit the Company’s debt to 65% of total capitalization, as defined in the arrangements. For purposes of calculating these covenants, long-term notes payable to affiliated trusts are excluded from debt but included in capitalization. Exceeding this debt level would result in a default under the credit arrangements. At December 31, 2011, the Company was in compliance with the debt limit covenants. In addition, the credit arrangements typically contain cross default provisions that would be triggered if the Company defaulted on other indebtedness (including guarantee obligations) above a specified threshold. The cross default provisions are restricted to indebtedness (including guaranteed obligations) of the Company. The Company is currently in compliance with all such covenants. None of the arrangements contain material adverse change clauses at the time of borrowings.

The Company borrows through commercial paper programs that have the liquidity support of committed bank credit arrangements. The Company may also borrow through various other arrangements with banks.

Details of short-term borrowings were as follows:


	Short-term Debt at the End of the Period		Short-term Debt During the Period ^(a)

	Amount Outstanding	Weighted Average Interest Rate	Average Outstanding	Weighted Average Interest Rate	Maximum Amount Outstanding

	(in millions)		(in millions)		(in millions)
December 31, 2011:
Commercial paper	$ —	—	$20	0.22%	$255

December 31, 2010:
Commercial paper	$ —	—	$ 7	0.22%	$135

(a) Average and maximum amounts are based upon daily balances during the period.

At December 31, 2011, the Company had regulatory approval to have outstanding up to $2.3 billion of short-term borrowings.

FINANCING

6. FINANCING

Long-Term Debt Payable to Affiliated Trusts

The Company formed certain wholly-owned trust subsidiaries for the purpose of issuing preferred securities. The proceeds of the related equity investments and preferred security sales were loaned back to the Company through the issuance of junior subordinated notes totaling $206 million, which constituted substantially all of the assets of these trusts and were reflected in the balance sheet as long-term debt at December 31, 2010. The Company considered that the mechanisms and obligations relating to the preferred securities issued for its benefit, taken together, constituted a full and unconditional guarantee by it of the respective trusts’ payment obligations with respect to these securities. At December 31, 2010, trust preferred securities of $200 million were outstanding. In September 2011, the Company redeemed all of the preferred securities and the related trust junior subordinated notes. See Note 1 under “Variable Interest Entities” for additional information on the accounting treatment for these trusts and the related securities.

Securities Due Within One Year

A summary of scheduled maturities and redemptions of securities due within one year at December 31 was as follows:


	2011		2010
	(in millions)
Capital lease	$	5	$	4
Bank term loans		250		300
Pollution control revenue bonds		—		8
Senior notes		200		100
Other long-term debt		—		3

Total	$	455	$	415

Maturities through 2016 applicable to total long-term debt are as follows: $455 million in 2012; $1.7 billion in 2013; $5 million in 2014; $256 million in 2015; and $260 million in 2016.

Pollution Control Revenue Bonds

Pollution control obligations represent loans to the Company from public authorities of funds derived from sales by such authorities of revenue bonds issued to finance pollution control facilities. The Company is required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. The Company has incurred obligations in connection with the sale by public authorities of tax-exempt pollution control revenue bonds. The amount of tax-exempt pollution control revenue bonds outstanding at December 31, 2011 and 2010 was $1.8 billion and $1.5 billion, respectively. Proceeds from certain issuances are restricted until qualifying expenditures are incurred.

Senior Notes

The Company issued $550 million aggregate principal amount of unsecured senior notes in 2011. The proceeds of the issuance were used to repay a portion of the Company’s short-term indebtedness and for general corporate purposes, including the Company’s continuous construction program.

At December 31, 2011 and 2010, the Company had $6.4 billion and $6.3 billion of senior notes outstanding, respectively. These senior notes are effectively subordinated to all secured debt of the Company, which aggregated $55 million and $59 million at December 31, 2011 and 2010, respectively.

Bank Term Loans

At December 31, 2011 and 2010, the Company had $450 million and $300 million of bank loans outstanding, respectively. At December 31, 2011, $200 million of the bank loans outstanding were short-term instruments and are reflected in notes payable on the balance sheet.

Subsequent to December 31, 2011, the Company entered into a six-month short-term floating rate bank loan in an aggregate principal amount of $100 million bearing interest based on one-month London Interbank Offered Rate (LIBOR).

These bank loans have covenants that limit debt levels to 65% of total capitalization, as defined in the agreements. For purposes of these definitions, debt excludes certain hybrid securities. At December 31, 2011, the Company was in compliance with its debt limits.

In addition, these bank loans contain cross default provisions that would be triggered if the borrower defaulted on other indebtedness above a specified threshold. The cross default provisions are restricted to the indebtedness, including any guarantee obligations, of the Company. The Company is currently in compliance with all such covenants.

Capital Leases

Assets acquired under capital leases are recorded in the balance sheets as utility plant in service, and the related obligations are classified as long-term debt. At December 31, 2011 and 2010, the Company had a capitalized lease obligation for its corporate headquarters building of $55 million and $58 million, respectively, with an interest rate of 7.4% and 8.0%, respectively. For ratemaking purposes, the Georgia PSC has treated the lease as an operating lease and has allowed only the lease payments in cost of service. The difference between the accrued expense and the lease payments allowed for ratemaking purposes has been deferred and is being amortized to expense as ordered by the Georgia PSC. The annual expense incurred for all capital leases was not material for any year presented.

Outstanding Classes of Capital Stock

The Company currently has preferred stock, Class A preferred stock, preference stock, and common stock authorized. The Company has shares of its Class A preferred stock, preference stock, and common stock outstanding. The Company’s Class A preferred stock ranks senior to the Company’s preference stock and common stock with respect to payment of dividends and voluntary or involuntary dissolution. The Company’s preference stock ranks senior to the common stock with respect to the payment of dividends and voluntary or involuntary dissolution. Certain series of the Class A preferred stock and preference stock are subject to redemption at the option of the Company on or after a specified date (typically five or 10 years after the date of issuance) at a redemption price equal to 100% of the liquidation amount of the stock. In addition, the Company may redeem the outstanding series of the preference stock at a redemption price equal to 100% of the liquidation amount plus a make-whole premium based on the present value of the liquidation amount and future dividends through the first par redemption date.

Dividend Restrictions

The Company can only pay dividends to Southern Company out of retained earnings or paid-in-capital.

Bank Credit Arrangements

At December 31, 2011, committed credit arrangements with banks were as follows:


Expires^(a)

2014	2016	Total	Unused

(in millions)
$250	$1,500	$1,750	$1,745

(a)	No credit arrangements expire in 2012, 2013, or 2015.

The Company expects to renew its facilities, as needed, prior to expiration. The agreements contain stated borrowing rates. All the agreements require payment of commitment fees based on the unused portion of the commitments or the maintenance of compensating balances with the banks. Commitment fees average less than 1/4 of 1% for the Company. Compensating balances are not legally restricted from withdrawal.

The credit arrangements contain covenants that limit the ratio of indebtedness to capitalization (each as defined in the arrangements) to 65%. For purposes of these definitions, indebtedness excludes certain hybrid securities. In addition, the credit arrangements contain cross default provisions that would trigger an event of default if the Company defaulted on other indebtedness above a specified threshold. At December 31, 2011, the Company was in compliance with all such covenants. None of the arrangements contain material adverse change clauses at the time of borrowings.

The $1.7 billion of unused credit arrangements provides liquidity support to the Company’s variable rate pollution control revenue bonds and its commercial paper borrowings. The amount of variable rate pollution control revenue bonds outstanding requiring liquidity support as of December 31, 2011 was $868 million.

The Company has short-term borrowings primarily through a commercial paper program that has the liquidity support of committed bank credit arrangements. The Company may also borrow through various other arrangements with banks. Commercial paper and short-term bank loans are included in notes payable on the balance sheets.

Details of short-term borrowings, excluding $2 million of notes payable related to other energy service contracts, were as follows:


	Short-term Debt at the End of the Period		Short-term Debt During the Period ^(a)

	Amount Outstanding	Weighted Average Interest Rate	Average Outstanding	Weighted Average Interest Rate	Maximum Amount Outstanding

	(in millions)		(in millions)		(in millions)
December 31, 2011:
Commercial paper	$ 313	0.20%	$ 208	0.26%	$ 681
Short-term bank debt	200	1.18%	9	1.18%	200

Total	$ 513	0.51%	$ 217	0.33%

December 31, 2010:
Commercial paper	$ 575	0.30%	$ 167	0.325%	$ 575

(a)	Average and maximum amounts are based upon daily balances during the period.

FINANCING

6. FINANCING

Securities Due Within One Year

At December 31, 2011, the Company had no securities due within one year.

Maturities through 2016 applicable to total long-term debt are as follows: $60 million in 2013; $75 million in 2014; and $110 million in 2016. There are no scheduled maturities in 2012 and 2015.

Senior Notes

At December 31, 2011 and 2010, the Company had a total of $936.4 million and $812.0 million of senior notes outstanding, respectively. These senior notes are effectively subordinate to all secured debt of the Company which totaled approximately $41 million at December 31, 2011.

In May 2011, the Company issued $125 million aggregate principal amount of Series 2011A 5.75% Senior Notes due June 1, 2051. The net proceeds from the sale of the Series 2011A Senior Notes were used to repay a $110 million bank note, to repay a portion of the Company’s outstanding short-term indebtedness, and for general corporate purposes, including the Company’s continuous construction program.

Pollution Control Revenue Bonds

Pollution control obligations represent loans to the Company from public authorities of funds derived from sales by such authorities of revenue bonds issued to finance pollution control facilities. At December 31, 2011 and 2010, the Company had a total of $309 million and $309 million of outstanding pollution control revenue bonds, respectively, and is required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. Proceeds from certain issuances are restricted until qualifying expenditures are incurred.

Outstanding Classes of Capital Stock

The Company currently has preferred stock, Class A preferred stock, preference stock, and common stock authorized. The Company’s preferred stock and Class A preferred stock, without preference between classes, rank senior to the Company’s preference stock and common stock with respect to payment of dividends and voluntary or involuntary dissolution. No shares of preferred stock or Class A preferred stock were outstanding at December 31, 2011. The Company’s preference stock ranks senior to the common stock with respect to the payment of dividends and voluntary or involuntary dissolution. Certain series of the preference stock are subject to redemption at the option of the Company on or after a specified date (typically five or 10 years after the date of issuance) at a redemption price equal to 100% of the liquidation amount of the preference stock. In addition, one series of the preference stock may be redeemed earlier at a redemption price equal to 100% of the liquidation amount plus a make-whole premium based on the present value of the liquidation amount and future dividends.

In January 2011, the Company issued to Southern Company 500,000 shares of the Company’s common stock, without par value, and realized proceeds of $50 million. On January 20, 2012, the Company issued to Southern Company 400,000 shares of the Company’s common stock, without par value, and realized proceeds of $40 million. The proceeds were used to repay a portion of the Company’s short-term debt and for other general corporate purposes, including the Company’s continuous construction program.

Dividend Restrictions

The Company can only pay dividends to Southern Company out of retained earnings or paid-in-capital.

Assets Subject to Lien

The Company has granted a lien on its property at Plant Daniel in connection with the issuance of two series of pollution control revenue bonds with an outstanding principal amount of $41 million. There are no agreements or other arrangements among the Southern Company system companies under which the assets of one company have been pledged or otherwise made available to satisfy obligations of Southern Company or any of its subsidiaries.

Bank Credit Arrangements

At December 31, 2011, committed credit arrangements with banks were as follows:


Expires^(a)				Executable Term-Loans

2012	2014	Total	Unused	One Year	Two Years

$75	$165	$240	$240	$75	$—

(a)	No credit arrangements expire in 2013, 2015, or 2016.

During 2011, the Company reviewed its lines of credit and replaced $165 million of credit arrangements having one-year expirations with $165 million of credit arrangements having terms of three years. The Company expects to renew its credit arrangements, as needed, prior to expiration. During the second quarter 2011, the Company reviewed its lines of credit and made changes resulting in a temporary net increase of $40 million. In the third quarter 2011, the Company repaid a $30 million draw and decreased the amount of bank credit arrangements to $240 million. Of the $240 million of unused credit arrangements, $69 million provides support for variable rate pollution control revenue bonds and $171 million was available for liquidity support for the Company’s commercial paper program and for other general corporate purposes. Annual commitment fees average less than ¹/4 of 1% for the Company.

Certain credit arrangements contain covenants that limit the level of indebtedness to capitalization to 65%, as defined in the arrangements. At December 31, 2011, the Company was in compliance with these covenants.

In addition, certain credit arrangements contain cross default provisions to other indebtedness that would trigger an event of default if the Company defaulted on indebtedness over a specified threshold. The cross default provisions are restricted only to indebtedness of the Company. The Company is currently in compliance with all such covenants.

For short-term cash needs, the Company borrows primarily through a commercial paper program that has the liquidity support of the Company’s committed bank credit arrangements. The Company may also borrow through various other arrangements with banks. Commercial paper and short-term bank loans are included in notes payable in the balance sheets.

Details of short-term borrowings, excluding $3.6 million of notes payable related to other energy service contracts, were as follows:


	Short-term Debt at the End of the Period				Short-term Debt During the Period (a)

	Amount Outstanding		Weighted Average Interest Rate		Average Outstanding		Weighted Average Interest Rate		Maximum Amount Outstanding

	(in millions)				(in millions)				(in millions)
December 31, 2011:
Commercial paper		$111		0.22%		$53		0.24%		$111
Short-term bank debt		—		N/A		4		1.31%		30

Total		$111		0.22%		$57		0.32%

December 31, 2010:
Commercial paper		$ 92		0.29%		$44		0.25%		$108

(a)	Average and maximum amounts are based upon daily balances during the period.

FINANCING

6. FINANCING

Bank Term Loans

In April 2011, the Company entered into a one-year $75 million aggregate principal amount long-term floating rate bank loan with a variable interest rate based on the one-month London Interbank Offered Rate (LIBOR). The proceeds of this loan were used to repay maturing long-term and short-term indebtedness and for other general corporate purposes, including the Company’s continuous construction program.

In September 2011, the Company entered into a one-year $40 million aggregate principal amount floating rate bank loan that bears interest based on one-month LIBOR. In addition, the Company entered into a one-year extension of a $125 million aggregate principal amount floating rate bank loan that bears interest based on one-month LIBOR. The proceeds were used to repay outstanding short-term debt and for general corporate purposes, including the Company’s continuous construction program.

At December 31, 2011 and 2010, the Company had $240 million and $205 million of bank loans outstanding, respectively.

Senior Notes

In October 2011, the Company issued $150 million aggregate principal amount of Series 2011A 2.35% Senior Notes due October 15, 2016 and $150 million aggregate principal amount of Series 2011B 4.75% Senior Notes due October 15, 2041. The Company also settled hedges totaling $150 million related to the Series 2011A issuance at a gain of approximately $1.4 million. This gain will be amortized to interest expense, in earnings, over five years. The Company also settled hedges totaling $150 million related to the Series 2011B issuance at a loss of approximately $0.5 million. This loss will be amortized to interest expense, in earnings, over 10 years. The net proceeds were used by the Company to pay amounts in connection with the purchase of Plant Daniel Units 3 and 4 as described in Note 1 under “Purchase of the Plant Daniel Combined Cycle Generating Units,” and for general corporate purposes, including the Company’s continuous construction program.

The Company had a total of $630.0 million and $330.0 million, respectively, of senior notes outstanding at December 31, 2011 and 2010.

Plant Daniel Revenue Bonds

In October 2011, in connection with the Company’s election under its operating lease of Plant Daniel Units 3 and 4 to purchase the assets, the Company assumed the obligations of the lessor related to $270 million aggregate principal amount of Mississippi Business Finance Corporation Taxable Revenue Bonds, 7.13% Series 1999A due October 20, 2021, issued for the benefit of the lessor as described in Note 1 under “Purchase of the Plant Daniel Combined Cycle Generating Units” herein. These bonds are secured by Plant Daniel Units 3 and 4 and certain personal property. The bonds were recorded at fair value as of the date of assumption, or $346.1 million, reflecting a premium of $76.1 million.

Securities Due Within One Year

A summary of scheduled maturities and redemptions of securities due within one year at December 31, 2011 and 2010 was as follows:


	2011		2010
	(in millions)
Capitalized leases	$	0.6	$	1.4
Bank term loans		240.0		205.0
Revenue bonds		—		50.0

Outstanding at December 31	$	240.6	$	256.4

Maturities applicable to total long-term debt are $240.6 million in 2012, $50.0 million in 2013, and $150.0 million in 2016. There are no scheduled maturities in 2014 and 2015.

Pollution Control Revenue Bonds

Pollution control obligations represent loans to the Company from public authorities of funds derived from sales by such authorities of revenue bonds issued to finance pollution control facilities. The Company is required to make payments sufficient for the authorities to meet principal and interest requirements of such bonds. The amount of tax-exempt pollution control revenue bonds outstanding at December 31, 2011 and 2010 was $82.7 million.

Other Revenue Bonds

Other revenue bond obligations represent loans to the Company from a public authority of funds derived from the sale by such authority of revenue bonds. The Company had $50 million and $100 million of such obligations outstanding at December 31, 2011 and 2010, respectively. Such amounts are reflected in the statements of capitalization as long-term notes payable.

Assets Subject to Lien

The revenue bonds assumed in conjunction with the purchase of Plant Daniel Units 3 and 4 are secured by Plant Daniel Units 3 and 4 and certain personal property. See Note 1 under “Purchase of the Plant Daniel Combined Cycle Generating Units” for additional information.

Outstanding Classes of Capital Stock

The Company currently has preferred stock (including depositary shares which represent one-fourth of a share of preferred stock) and common stock authorized and outstanding. The preferred stock of the Company contains a feature that allows the holders to elect a majority of the Company’s board of directors if dividends are not paid for four consecutive quarters. Because such a potential redemption-triggering event is not solely within the control of the Company, this preferred stock is presented as “Cumulative Redeemable Preferred Stock” in a manner consistent with temporary equity under applicable accounting standards. The Company’s preferred stock and depositary preferred stock, without preference between classes, rank senior to the Company’s common stock with respect to payment of dividends and voluntary or involuntary dissolution. Certain series of the preferred stock and depositary preferred stock are subject to redemption at the option of the Company on or after a specified date (typically five or 10 years after the date of issuance) at a redemption price equal to 100% of the liquidation amount of the stock.

Dividend Restrictions

The Company can only pay dividends to Southern Company out of retained earnings or paid-in-capital.

Bank Credit Arrangements

At December 31, 2011, committed credit arrangements with banks were as follows:


Expires^(a)				Executable Term-Loans
2012	2014	Total	Unused	One Year	Two Years
(in millions)
$131	$165	$296	$296	$25	$41

(a)

No credit arrangements expire in 2013, 2015, or 2016.

The Company expects to renew its credit arrangements, as needed, prior to expiration.

In connection with these credit arrangements, the Company agrees to pay commitment fees based on the unused portions of the commitments or to maintain compensating balances with the banks. Commitment fees average less than 1/4 of 1% for the Company. Compensating balances are not legally restricted from withdrawal.

The credit arrangements contain covenants that limit the ratio of indebtedness to capitalization (each as defined in the arrangements) to 65%. For purposes of these definitions, indebtedness excludes long-term debt payable to affiliated trusts and, in certain cases, other hybrid securities.

In addition, the credit arrangements contain cross default provisions that would trigger an event of default if the Company defaulted on other indebtedness above a specified threshold. At December 31, 2011, the Company was in compliance with all such covenants. None of the arrangements contain material adverse change clauses at the time of borrowing.

This $296 million in unused credit arrangements provides required liquidity support to the Company’s borrowings through a commercial paper program. The credit arrangements also provide support to the Company’s variable rate tax-exempt pollution control revenue bonds totaling $40.1 million.

Details of short-term borrowings were as follows:


	Short-term Debt at the End of the Period						Short-term Debt During the Period ^(a)
	Amount Outstanding			Weighted Average Interest Rate			Average Outstanding			Weighted Average Interest Rate			Maximum Amount Outstanding
	(in millions)						(in millions)						(in millions)
December 31, 2011:
Commercial paper		$	—		—	%		$	7		0.21	%		$	70
December 31, 2010:
Commercial paper		$	—		—	%		$	12		0.28	%		$	63

(a)	Average and maximum amounts are based upon daily balances during the period.

FINANCING

6. FINANCING

Other Long-Term Notes

During 2011, the Company prepaid $3.7 million on a long-term debt related to SRE.

Senior Notes

On September 22, 2011, the Company issued $300 million aggregate principal amount of Series 2011A 5.15% Senior Notes due September 15, 2041. On November 17, 2011, the Company issued an additional $275 million of the same series of notes. Upon the completion of this offering, the aggregate principal amount of the outstanding Series 2011A 5.15% Senior Notes was $575 million. On December 19, 2011, the proceeds of the issuance were used to redeem $575 million aggregate principal amount of Series B 6.25% Senior Notes due July 15, 2012.

At December 31, 2011 and 2010, the Company had $1.3 billion of senior notes outstanding.

Bank Credit Arrangements

During 2011, the Company terminated its existing credit arrangement and entered into a $500 million committed credit facility (Facility) expiring in 2016. As of December 31, 2011, the total amount available under the Facility was $500 million.

The Facility contains a covenant that limits the ratio of debt to capitalization (each as defined in the Facility) to a maximum of 65%. The Facility also contains a cross default provision that would be triggered if the Company defaulted on other indebtedness above a specified threshold. The cross default provision is restricted only to indebtedness of the Company. As of December 31, 2011, the Company was in compliance with all covenants in the Facility. The Company is required to pay a commitment fee on the unused balance of the Facility. This fee is less than ¹/4 of 1%.

There were no borrowings outstanding under the Company’s prior facility at December 31, 2010.

Proceeds from these credit arrangements may be used for working capital and general corporate purposes as well as liquidity support for the Company’s commercial paper program.

The Company’s commercial paper program is used to finance acquisition and construction costs related to electric generating facilities and for general corporate purposes. Commercial paper is included in notes payable in the balance sheets.

Details of short-term borrowings as of December 31, 2011 and December 31, 2010 were as follows:


	Short-term Debt at the End of the Period		Short-term Debt During the Period^(a)
	Amount Outstanding	Weighted Average Interest Rate	Average Outstanding	Weighted Average Interest Rate	Maximum Amount Outstanding

	(in millions)		(in millions)		(in millions)
December 31, 2011:
Commercial paper	$180	0.48%	$175	0.38%	$305

December 31, 2010:
Commercial paper	$204	0.41%	$169	0.40%	$259

(a)	Average and maximum amounts are based upon daily balances during the period.

Dividend Restrictions

The Company can only pay dividends to Southern Company out of retained earnings or paid-in-capital.

The indenture related to certain series of the Company’s senior notes also contains certain limitations on the payment of common stock dividends. No dividends may be paid unless, as of the end of any calendar quarter, the Company’s projected cash flows from fixed priced capacity PPAs are at least 80% of total projected cash flows for the next 12 months or the Company’s debt to capitalization ratio is no greater than 60%. At December 31, 2011, the Company was in compliance with these ratios and had no other restrictions on its ability to pay dividends.