Prospectus excerpt: This Prospectus Supplement of Alabama Power Company ("ALABAMA") relates to 1,520,000 shares of 5.83% Class A Preferred Stock, Cumulative, Par Value $1 Per Share (Stated Capital $25 Per Share) (the "Old Money Preferred Stock") and 6,480,000 shares of 5.20% Class A Preferred Stock, Cumulative, Par Value $1 Per Share (Stated Capital $25 Per Share) (the "New Money Preferred Stock" and, together with the Old Money Preferred Stock, the "new Stock").
ALABAMA shall have the right to redeem the new Stock of each series, in whole or in part, without premium, from time to time, on or after August 19, 2008, upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100% of the stated capital plus accrued dividends to the redemption date.
The Class A Preferred Stock ranks on a parity as to dividends and assets with ALABAMA's Preferred Stock (par value $100 per share).
The amount of dividends payable in respect of the New Money Preferred Stock will be adjusted in the event of certain amendments to the Internal Revenue Code of 1986, as amended, in respect of the dividends-received deduction. See "Certain Terms of the New Stock -- Dividend Rights."
ALABAMA will be allowed a partial federal income tax deduction for the dividends paid on the Old Money Preferred Stock and, therefore, corporate holders of the Old Money Preferred Stock will be subject to the limited deduction for dividends received provided for in Section 244(a) of the Internal Revenue Code of 1986, as amended. See "Certain Terms of the New Stock -- Federal Income Tax Effect on Dividends" herein.