Glossary Writing and Project Management:  Marc Rice.  Financial Review: L.M. Thomas III. Design:  Lucid Partners, Atlanta, GA.  Major Photography:  James Schnepf.  Printing:  Graphic Arts Center, Portland, OR. Combined cycle plant – a highly efficient way of generating electric power, using natural gas to fuel state-of-the-art,  low-emission combustion turbines working in tandem with equipment that recovers exhaust heat to produce additional electricity.  Competitive generation business – our wholesale market-based electricity supply business that, primarily through long-term contracts, serves customers who can choose their suppliers based on price, reliability, capacity, and other market needs.  Dividend yield – the annual dividend income per share received from a company divided by its current stock price. Earnings per share – net income divided by the average number of shares of common stock outstanding.  Federal Energy Regulatory Commission (FERC) – an independent agency within the U.S. Department of Energy that, among other things, regulates wholesale sales of electricity and transmission in interstate commerce.  Generating capacity – the amount of energy we can produce using all of our power generation facilities.  Guidance – information issued by a company about its outlook, especially in terms of earnings. Guidance can be positive or negative and is watched closely by analysts and investors since it often is a strong indicator of a company's future  performance. Market value – what investors believe a company is worth,  calculated by multiplying the number of shares outstanding  by the current market price of the company’s shares. Wholesale markets – markets in which relatively large amounts of energy are sold to customers who may then sell it in retail markets or – in the case of large industrial customers – use it.  Wholesale customers – energy marketers, electric and gas  utilities, municipal utilities, rural electric cooperatives, and  other entities that buy power for resale to retail customers.  Total shareholder return – return on investment, including stock price appreciation plus reinvested dividends. The  distribution of shares of Mirant Corporation stock to Southern Company shareholders is treated as a special dividend for  purposes of calculating Southern Company shareholder return. Super Southeast – the vibrant region and energy market that includes the four states of our traditional Southeastern service area as well as surrounding states. The region we know best.  Retail markets – markets in which energy is directly sold and delivered to the ultimate end-users of that energy.  Regulated business – the part of our business that generates, transmits, and distributes electricity to commercial, industrial, and residential customers in most of Alabama and Georgia, the Florida panhandle, and southeastern Mississippi.  Regional Transmission Organization (RTO) – a mechanism under which public utility transmission facilities in a geographic region are put under common control of an independent, incentive-driven, third-party operator that manages the assets.  Payout ratio – the percentage of earnings that is paid to  shareholders in the form of dividends.  Current information about Southern Company is available  on the Internet at www.southerncompany.com.  The 2002 annual report is submitted for shareholders’  information. It is not intended for use in connection with  any sale or purchase of, or any solicitation of offers to buy  or sell, securities. Printed on recycled paper. Internet Southern Company 270 Peachtree Street, N.W. Atlanta, GA 30303 (404) 506-5000 601 Pennsylvania Avenue, N.W. Suite 800 South Washington, DC 20004 (202) 261-5000