SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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 different from that of the issuer named below:
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
(Plan for Bargaining Unit Employees)
c/o SOUTHERN ENERGY RESOURCES, INC.
1155 Perimeter Center W
Atlanta, Georgia 30338
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
SOUTHERN ENERGY RESOURCES,INC.
BARGAINING UNIT SAVINGS PLAN
Form 11-K
December 31, 2000
TABLE OF CONTENTS
Page No.
EXHIBITS 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 4
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits--
December 31, 2000 and 1999 5
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 2000 6
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE 7
SCHEDULE supporting financial statements
Schedule I: Schedule H, Line 4i--Schedule of Assets
(Held at End of Year)--December 31, 2000 14
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 17
2
Exhibits
A - Consent of Independent Public Accountants. (Contained herein at Page 17)
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Southern Energy Resources, Inc.
Bargaining Unit Savings Plan:
We have audited the accompanying statement of net assets available for plan
benefits of the Southern Energy Resources, Inc. Bargaining Unit Savings Plan as
of December 31, 2000 and 1999 and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 2000. These
financial statements and the schedule referred to below are the responsibility
of the Plan's administrator. Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Southern Energy Resources, Inc. Bargaining Unit Savings Plan as of December 31,
2000 and 1999 and the changes in its net assets available for plan benefits for
the year ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States.
Our audits were performed 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) 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 Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Atlanta, Georgia
May 25, 2001
4
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2000 AND 1999
2000 1999
----------- ----------
INVESTMENTS, at fair value $11,520,034 $8,506,472
----------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $11,520,034 $8,506,472
=========== ==========
The accompanying notes are an integral part of these statements.
5
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
ADDITIONS:
Investment income:
Net depreciation in fair value of investments $ (26,886)
Dividends 524,453
Interest 31,819
-----------
Total investment income 529,386
-----------
Contributions:
Participants' 1,818,992
Employers' 648,195
Rollovers 476,810
-----------
Total contributions 2,943,997
-----------
Total additions 3,473,383
DEDUCTIONS:
Benefits paid to participants or beneficiaries (459,821)
-----------
NET INCREASE 3,013,562
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 8,506,472
-----------
End of year $11,520,034
===========
The accompanying notes are an integral part of this statement.
6
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 2000 AND 1999
1. PLAN DESCRIPTION
The following description of the Southern Energy Resources, Inc. Bargaining Unit
Savings Plan (the "Plan") provides only general information. Participants should
refer to the plan document for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan sponsored by Southern Energy Resources,
Inc. (the "Company") covering substantially all members of the Steelworkers of
America, AFL-CIO-CLC Local No. 12502 (the "Southern Energy Stateline Bargaining
Unit"). The Plan was amended to permit employees of the Company who are members
of the Utility Workers' Union of America Local No. 392 and 480, previously
employed by Commonwealth Electric Company ("Southern Energy New England
Bargaining Unit"), and members of the International Brotherhood of Electrical
Workers Local No. 503, previously employed by Orange and Rockland Utilities,
Inc. ("Southern Energy New York Bargaining Unit"), to participate in the Plan
effective January 1, 1999 and July 1, 1999, respectively.
The Plan was established to encourage employee savings, supplement retirement
and death benefits, and create a competitive compensation program for employees.
The Company appointed Merrill Lynch Trust Company (the "Trustee") as trustee to
execute investment transactions for the Plan. The Company serves as plan
administrator. The Plan is subject to the applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended.
The Plan has distinct characteristics for the various bargaining units noted
above relative to eligibility and contributions.
Southern Energy Stateline Bargaining Unit
All employees of the Company who are members of the Southern Energy Stateline
Bargaining Unit are eligible to participate in the Plan upon completion of one
year of service, as defined by the Plan. Participants may enroll in the Plan on
the first day of any month after their completion of eligibility requirements.
Participants may elect to contribute, on a pretax or an after-tax basis, in 1%
increments up to 16% of their compensation, subject to certain limitations
defined by the Plan, into any investment fund offered by the Plan. Participants
may change their contribution percentages at any time. The Company provides a
matching contribution equal to 75% of the participant's contribution up to a
maximum of 6% of the participant's base compensation. The Company's matching
contribution is invested solely in Southern Company common stock. Effective
January 1, 2000, participants may elect to direct all or a portion of their
company matching contributions to any investment fund offered by the Plan once
these contributions have been credited to their accounts.
Southern Energy New England Bargaining Unit
An employee who is a member of the Southern Energy New England Bargaining Unit
and an eligible employee of the Company and has completed one hour of service,
7
as defined by the Plan, is eligible to participate in the Plan. A temporary
employee, as defined by the Plan, is eligible to participate in the Plan after
completion of a consecutive 12-month period of employment with the Company.
Participants may elect to contribute, on a pretax or an after-tax basis, in 1%
increments up to 16% of their compensation, subject to certain limitations
defined by the Plan, into any investment fund offered by the Plan. Participants
may change their contribution percentages at any time. The Company provides a
matching contribution equal to 100% of the participant's contribution up to a
maximum of 4% of the participant's base compensation after one year of service.
The Company's matching contribution is invested solely in Southern Company
common stock. Effective January 1, 2000, participants may elect to direct all or
a portion of their company matching contributions to any investment fund offered
by the Plan once these contributions have been credited to their account.
Southern Energy New York Bargaining Unit
An employee who is a member of the Southern Energy New York Bargaining Unit, is
an eligible employee of Southern Energy New York, G.P., Inc., and has completed
one year of service with the Company is eligible to participate in the Plan. All
acquisition employees, as defined by the Plan, who participated in the Orange
and Rockland, Inc. Hourly Group Savings Plan ("O&R Plan") on June 30, 1999 were
eligible to participate in the Plan effective July 1, 1999.
Participants may elect to contribute, on a pretax or an after-tax basis, in 1%
increments up to 20% of their compensation, subject to certain limitations
defined by the Plan, into any investment fund offered by the Plan. Participants
may change their contribution percentages at any time. The Company provides a
matching contribution equal to 50% of the participant's contribution up to a
maximum of 6% of the participant's base compensation. The Company's matching
contribution is invested solely in Southern Company common stock. Effective
January 1, 2000, participants may elect to direct all or a portion of their
company matching contributions to any investment fund offered by the Plan once
these contributions have been credited to their account.
Participants had the opportunity to transfer their account balances from the O&R
Plan to the Plan. These accounts were transferred into the Merrill Lynch
Retirement Preservation Trust and then were eligible to be invested according to
the participant's investment allocations, as directed under the Plan. Prior to
January 1, 2000, the portion of the transferred account attributable to company
matching contributions, as defined by the O&R Plan, were treated as employer
matching contributions under the Plan. Effective January 1, 2000, transferred
balances relative to company matching contributions, as defined by the O&R Plan,
will not be invested in company stock under the Plan but will be invested at the
participant's discretion.
Participant Accounts and Vesting
Each participant's account is credited with his/her contribution, the Company's
matching contribution, and plan earnings (losses). Participants are immediately
fully vested in their accounts.
Benefit Payments
Upon termination of service, death, or disability, a participant or his/her
beneficiary (upon the death of the participant) may elect to receive an amount
equal to the value of his/her account in a lump-sum distribution. If account
balances are less than $5,000, participants will automatically receive a
lump-sum payment. A participant or beneficiary may elect to have shares of
company stock distributed in common stock. If a participant retires, he/she may
elect to receive a lump-sum distribution or annual installments for a period not
to exceed 20 years or life expectancy.
8
Rollovers
Participants may roll over a distribution from a qualified retirement plan of a
previous employer to the Plan. The rollover must occur within 18 months from the
date of the participant's employment with the Company.
Investment Options
Participants are offered the following investment options in which they may
invest their contributions. A description of each investment option is provided
below:
Southern Company Common Stock
This fund invests in Southern Company common stock.
Merrill Lynch Retirement Preservation Trust
This fund invests in government agency securities, guaranteed
investment contracts, and money market instruments.
Merrill Lynch Equity Index Trust (Tier III)
This fund invests in certain common stocks that seek to track the
performance of the Standard & Poor's 500 composite stock price index.
Merrill Lynch Small Cap Fund (Class A)
This fund invests in securities of small market capitalization
companies.
Merrill Lynch Global Allocation Fund (Class A)
This fund invests primarily in U.S. and foreign equities as well as
debt and money market securities.
Mellon Balanced Portfolio Fund
This fund invests primarily in equity, debt, and cash equivalents.
PIMCO Total Return Fund (Class A)
This fund primarily invests in a diversified portfolio of fixed-income
securities of varying maturities.
Mercury HW International Value Fund
This fund invests at least 65% of its total assets in equity securities
in at least three non-U.S. markets.
Seligman High-Yield Bond Fund (Class A)
This fund invests its assets in a diversified portfolio of high-yield,
high-risk, medium- and lower-quality corporate bonds and notes
(commonly referred to as junk bonds).
Brinson U.S. Equity Fund (Class N)
This fund invests in a wide range of equity securities of U.S.
companies that are traded on major stock exchanges as well as in the
over-the-counter market.
9
Massachusetts Investors Trust (Class A)
This fund primarily invests its assets in a conservative portfolio of
equity securities (including common stock, preferred stock, and
convertible securities) selected for their high or improving investment
quality.
Franklin Small-Cap Growth Fund (Class I)
This fund primarily invests in equity securities of small
capitalization companies.
GAM Global Fund (Class A)
This fund invests in securities issued by companies in any country and
will normally invest in securities issued by companies in the United
States, Canada, the United Kingdom, Continental Europe, and the Pacific
Basin.
GAM International Fund (Class A)
This fund invests in securities issued by companies in any country
other than the United States and will normally invest in securities
issued by companies in Canada, the United Kingdom, Continental Europe,
and the Pacific Basin.
Loomis Sayles Small-Cap Value Fund (Administrative Class)
This fund invests primarily in equity securities of small
capitalization companies with good earnings growth potential and which
are believed to be undervalued by the market.
Putnam Growth Opportunities Fund
This fund invests in equity securities, placing principal emphasis on
those securities that fund management believes will benefit from the
major long-term trends in the economy.
Davis New York Venture Fund (Class A)
This fund invests primarily in equity securities of companies with
market capitalizations of at least $250 million.
Davis Real Estate Fund (Class A)
This fund invests primarily in securities of companies principally
engaged in or related to the real estate industry which own significant
real estate assets or which primarily invest in real estate financial
instruments.
Goal Manager Portfolios
Conservative Portfolio
This portfolio invests 50% of its assets in the Merrill Lynch
Retirement Preservation Trust, 30% in the PIMCO Total Return
Fund, and 20% among the MFS Massachusetts Investors Trust,
Brinson U.S. Equity Fund, Mercury HW International Value Fund,
and the Merrill Lynch Small Cap Fund.
Moderate Portfolio
This portfolio invests 10% of its assets in the Merrill Lynch
Retirement Preservation Trust, 40% in the PIMCO Total Return
Fund, and 50% among the MFS Massachusetts Investors Trust,
10
Brinson U.S. Equity Fund, Mercury HW International Value Fund,
and the Merrill Lynch Small Cap Fund.
Moderate to Aggressive Portfolio
This portfolio invests 30% of its assets in the PIMCO Total
Return Fund and 70% in the MFS Massachusetts Investors Trust,
Brinson U.S. Equity Fund, Mercury HW International Value Fund,
and the Merrill Lynch Small Cap Fund.
Aggressive Portfolio
This portfolio invests 100% of its assets in the MFS
Massachusetts Investors Trust, Brinson U.S. Equity Fund,
Mercury HW International Value Fund, and the Merrill Lynch
Small Cap Fund.
Loans to Participants
A participant may borrow the lesser of $50,000, less the highest outstanding
loan balance in the previous 12 months, or 50% of his/her vested account
balance, with a minimum loan amount of $1,000. Loans are repayable through
payroll deductions over the respective term of the loan. The interest rate is
determined by the plan administrator based on the prime rate of the prior
quarter and is fixed over the life of the note.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared using the accrual
method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Plan's management to use
estimates and assumptions that affect the net assets available for plan benefits
and the changes therein. Actual results could differ from these estimates.
Administrative Expenses
All administrative expenses are paid by the Company.
Investment Valuation
Investments other than investment contracts are valued at quoted market prices.
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year; investments traded in
the over-the-counter market and listed securities for which no sale was reported
on the last day of the plan year are valued at the last reported bid price. The
Plan's investment in the Merrill Lynch Retirement Preservation Trust Fund is
fully benefit-responsive and is stated at contract value (which approximates
fair value) in accordance with SOP 94-4, "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined Contribution Pension Plans."
Investment securities, in general, are exposed to various risks, including,
credit, interest, and overall market volatility risks. Due to the level of risk
associated with certain investment securities, it is possible that changes in
values of investment securities will occur and that such changes could
materially affect the amount reported in the statement of net assets available
for plan benefits.
11
Net Appreciation in Fair Value of Investments
Net realized gains (losses) and unrealized appreciation (depreciation) are
recorded in the accompanying statement of changes in net assets available for
plan benefits as net depreciation in fair value of investments.
3. INVESTMENTS
Individual assets that represent 5% or more of the Plan's net assets available
for plan benefits as of December 31, 2000 and 1999 are as follows:
2000 1999
---------- ----------
Merrill Lynch Retirement Preservation Trust $2,731,135 $3,525,196
Massachusetts Investors Trust 946,129 734,061
Davis New York Venture Fund 951,413 666,372
Southern Company Common Stock 2,501,360 869,010
Merrill Lynch Equity Index Trust 947,945 937,173
Franklin Small-Cap Growth Fund 1,204,424 N/A
The Plan's investments (including gains and losses on investments bought and
sold as well as held during the year) depreciated as follows for the year ended
December 31, 2000:
Investments, at fair value:
Mutual funds $(526,787)
Common stock 607,174
Common/collective trust (107,273)
---------
$ (26,886)
=========
4. TAX STATUS
The Plan obtained a determination letter dated June 10, 1999 in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code (the
"Code"). The plan administrator believes that the Plan is currently designed and
is being operated in compliance with the applicable requirements of the Code.
Therefore, the plan administrator believes that the Plan was qualified and the
related trust was tax-exempt as of the financial statement dates.
5. PLAN TERMINATION
Although it has not expressed any intent 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 of ERISA.
6. SUBSEQUENT EVENTS
On January 19, 2001, the Company announced, as part of its separation from
Southern Company, that the Company was changing its name from Southern Energy,
Inc. to Mirant Corporation. The Company began doing business as Mirant
Corporation on January 22, 2001 and legally changed its name on February 26,
2001.
12
Effective April 2, 2001, the Plan merged with the Southern Energy Resources,
Inc. Savings Plan for Covered Employees into the Mirant Services Bargaining Unit
Employee Savings Plan (the "Mirant Plan"), which was established December 2000.
T. Rowe Price is the trustee of the Mirant Plan.
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SCHEDULE I
Page 1 of 2
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
SCHEDULE H, LINE 4I--SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2000
Identity of Issuer, Borrower, Current
Lessor, or Similar Party Description of Investment Value
----------------------------------------------------------------------------------------------------------------------------------
* SOUTHERN COMPANY 75,229 shares of Southern Company common stock $ 2,501,360
* MERRILL LYNCH INVESTMENT MANAGERS 2,716,033 units of Merrill Lynch Retirement Preservation Trust 2,716,033
15,102 units of Merrill Lynch Retirement Preservation Trust GM 15,102
10,330 units of Merrill Lynch Equity Index Trust 947,945
17,167 units of Merrill Lynch Small Cap Fund 337,151
5,151 units of Merrill Lynch Global Allocation Fund (Class A) 67,577
3,714 units of Merrill Lynch Small Cap GM 72,952
MFS FAMILY OF FUNDS 37,279 units of Massachusetts Investors Trust 746,320
9,980 units of Massachusetts Investors Trust GM 199,809
MERCURY FUNDS 10,699 units of Mercury HW International Value Fund 123,752
4,134 units of Mercury HW International Value Fund GM 101,623
SELIGMAN GROUP 204 units of Seligman High-Yield Bond Fund 1,016
DAVIS FUNDS 33,104 units of Davis New York Venture Fund (Class A) 951,413
2,201 units of Davis Real Estate Fund A 48,583
14
SCHEDULE I
Page 2 of 2
Identity of Issuer, Borrower, Current
Lessor, or Similar Party Description of Investment Value
----------------------------------------------------------------------------------------------------------------------------------
BRINSON FUNDS 10,046 units of Brinson U.S. Equity Fund $ 156,724
8,870 units of Brinson U.S. Equity Fund 138,367
LOOMIS SAYLES FUNDS 730 units of Loomis Sayles Small-Cap Value Fund 14,977
GAM FUNDS 2,579 units of GAM International Fund (Class A) 51,633
2,219 units of GAM Global Fund (Class A) 38,895
FRANKLIN GROUP OF FUNDS 30,624 units of Franklin Small-Cap Growth Fund (Class I) 1,204,424
PIMCO FUNDS 6,800 units of PIMCO Total Return Fund (Class A) 70,656
17,410 units of PIMCO Total Return Fund (Class A) 180,885
PUTNAM FUNDS 10,699 units of Putnam Growth Opportunities Fund 234,407
MELLON FUNDS 8,531 units of Mellon Balanced Portfolio 87,536
* PARTICIPANTS Loans to participants with varying maturities and 510,894
interest rates ranging from 8.5% to 9.5%
$11,520,034
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed by the undersigned thereunto duly
authorized.
SOUTHERN ENERGY RESOURCES, INC.
BARGAINING UNIT SAVINGS PLAN
/s/ Vance Booker
Vance Booker
Senior Vice President, Administration
and External Affairs
June 27 2001
16
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated May 25, 2001, included in this annual report of
Southern Energy Resources, Inc. Bargaining Unit Savings Plan on Form 11-K for
the year ended December 31, 2000, into the Plan's previously filed Registration
Statement No. 333-44127.
/s/Arthur Andersen LLP
Atlanta, Georgia
June 25, 2001
17