- A net loss of $26 million versus a net loss of $1,515 million for
the third quarter of 2005 ATLANTA, Nov. 9 /PRNewswire-FirstCall/ --
Mirant Corporation (NYSE:MIR) today reported a net loss of $26
million for the quarter ended September 30, 2006, compared to a net
loss of $1,515 million for the same period in 2005. For the first
nine months of 2006, Mirant reported net income of $540 million,
compared to a net loss of $1,514 million for the first nine months
of 2005. The loss per share for the quarter ended September 30,
2006 was $0.09 per diluted share and earnings per share for the
first nine months of 2006 were $1.77 per diluted share. Excluding
unrealized mark-to-market gains of $244 million, impairment losses
of $396 million related to the six U.S. natural gas plants to be
sold, impairment losses of $120 million related to the construction
and development costs for the suspended Bowline combined cycle
unit, and other non-recurring charges, Mirant reported adjusted net
income for the third quarter of 2006 of $253 million, resulting in
adjusted earnings per diluted share of $0.85. Excluding unrealized
mark-to-market gains of $650 million, the impairments totaling $516
million, a $72 million write off of a Philippines deferred tax
asset and other non-recurring charges, Mirant reported adjusted net
income for the first nine months of 2006 of $462 million, resulting
in adjusted earnings per diluted share of $1.51. Adjusted EBITDA
from continuing operations was $214 million for the quarter,
compared to $191 million for the same period in 2005. For the first
nine months of 2006, adjusted EBITDA from continuing operations was
$474 million, compared to $202 million for the same period in 2005.
The period over period increases for the quarter and the first nine
months of the year resulted primarily from an increase in the
realized value of hedges for the 2006 periods compared to the 2005
periods, offset in part by lower power prices and lower generation
volumes in 2006. "The performance of our continuing business was
strong again this quarter. Our hedging in earlier periods continued
to mitigate the impact of lower market prices this year. Our
strategy remains to provide predictable financial results by
hedging our portfolio as market conditions warrant," said Edward R.
Muller, chairman and chief executive officer. Net cash provided by
operating activities during the third quarter was $388 million. Net
cash provided by operating activities was $1.039 billion for the
first nine months of 2006, excluding bankruptcy payments of $765
million. As of September 30, 2006, the company, including
discontinued operations, had cash and cash equivalents of $1.22
billion, total available liquidity of $1.70 billion and total
outstanding debt of $4.66 billion. Adjusted EBITDA from
discontinued operations was $200 million for the quarter, compared
to $187 million for the same period in 2005. For the first nine
months of 2006, adjusted EBITDA from discontinued operations was
$533 million, compared to $469 million for the same period in 2005.
Asset Sale Process The company's previously announced auctions of
its Philippine and Caribbean businesses and six U.S. natural gas
plants continue to proceed with targeted completion by mid-2007. As
previously disclosed, the generator at unit 2 of Sual failed in
July. Recently, the generator at unit 1 similarly failed. The
company expects unit 2 back in service in March and unit 1 back in
service later in 2007. Mirant expects to have a binding agreement
for the sale of its Philippine business near the end of 2006 or
early next year and to close the transaction by mid- 2007. Share
Repurchase Program In August 2006, the company completed its "Dutch
auction" self tender offer, in which the company repurchased
43,000,000 shares of common stock for an aggregate of approximately
$1.23 billion. On September 28, 2006, the company announced an
additional $100 million share repurchase program. As of October 31,
2006, the company had purchased 1,180,300 common shares under the
$100 million share repurchase program. Guidance Mirant is updating
its guidance as follows: - Adjusted EBITDA guidance for 2006 is
$619 million for continuing operations and $643 million for
discontinued operations - Adjusted EBITDA guidance for 2007 is $962
million for continuing operations and $299 million for discontinued
operations (discontinued operations reflects the first six months
only) The actual financial results for discontinued operations in
2007 will depend on the closing dates of the sales of those
operations. Earnings Call Mirant is hosting an earnings call today
to discuss its third quarter 2006 financial results and outline
business priorities. The call will be held from 9:00 a.m. to 10:00
a.m. New York City time. The conference call can be accessed via
the investor relations section of the company's website at
http://www.mirant.com/ or analysts are invited to listen to the
call by dialing 800.289.0572 (International 913.981.5543) and
entering pass code 4208393. Presentation slides for the analyst
call have been posted to the company's website. The presentation
may include certain non-GAAP financial measures as defined under
SEC rules. In such event, a reconciliation of those measures to the
most directly comparable GAAP measures will also be available via
the investor relations section of the company's website at
http://www.mirant.com/. A recording of the event will be available
for playback on the company's website beginning today at 12 p.m.
New York City time. A replay also will be available by dialing
888.203.1112 (International 719.457.0820) and entering the pass
code 4208393. Mirant is a competitive energy company that produces
and sells electricity in the United States, the Caribbean, and the
Philippines. Mirant owns or leases approximately 17,400 megawatts
of electric generating capacity globally. The company operates an
asset management and energy marketing organization from its
headquarters in Atlanta. For more information, please visit
http://www.mirant.com/. Regulation G Reconciliations Adjusted Net
Income and Adjusted EBITDA Quarter Ending September 30, 2006 (in
millions) Contin- Discon- uing tinued Opera- Opera- Total tions
EPS(1) tions EPS(1) Total EPS(1) Income (loss) from operations $247
$0.83 $(273) $(0.92) $(26) $(0.09) Mark-to-market gains (228)
(0.77) (16) (0.05) (244) (0.82) Gains on sales of assets, net (3)
(0.01) (1) - (4) (0.01) Loss (gains) on sale of investments (13)
(0.04) 1 - (12) (0.04) Impairment losses 120 0.40 396 1.33 516 1.73
Bankruptcy charges and pre- petition disputes 8 0.03 - - 8 0.03
Prepayment penalty and stamp tax - - 15 0.05 15 0.05 Adjusted net
income $131 $0.44 $122 $0.41 $253 $0.85 Provision for income taxes
- 45 45 Interest, net 48 25 73 Depreciation and amortization 35 8
43 Adjusted EBITDA $214 $200 $414 (1) Total diluted shares: 298
million Adjusted net income and adjusted EBITDA are non-GAAP
financial measures. Management and some members of the investment
community utilize adjusted net income and adjusted EBITDA to
measure financial performance on an ongoing basis. These measures
are not recognized in accordance with GAAP and should not be viewed
as an alternative to GAAP measures of performance. In evaluating
these adjusted measures, the reader should be aware that in the
future Mirant may incur expenses similar to the adjustments set
forth above. Adjusted Net Income and Adjusted EBITDA Year to Date
September 30, 2006 (in millions) Contin- Discon- uing tinued Opera-
Opera- Total tions EPS(1) tions EPS(1) Total EPS(1) Income (loss)
from operations $774 $2.54 $(234) $(0.77) $540 $1.77 Mark-to-market
gains (638) (2.09) (12) (0.04) (650) $(2.13) Gains on sales of
assets, net (49) (0.16) (1) (0.00) (50) $(0.16) Loss (gain) on sale
of investments (17) (0.06) 4 0.01 (13) $(0.04) Impairment losses on
minority owned affiliates - - 7 0.02 7 $0.02 Impairment losses 120
0.39 396 1.30 516 $1.69 Bankruptcy charges and pre- petition
disputes 25 0.08 - - 25 $0.08 Prepayment penalty and stamp tax - -
15 0.05 15 $0.05 Write off of Philippines deferred tax asset - - 72
0.23 72 $0.23 Adjusted net income $215 $0.70 $247 $0.81 $462 $1.51
Provision for income taxes 2 132 134 Interest, net 154 61 215
Depreciation and amortization 103 93 196 Adjusted EBITDA $474 $533
$1,007 (1) Total diluted shares: 305 million Adjusted net income
and adjusted EBITDA are non-GAAP financial measures. Management and
some members of the investment community utilize adjusted net
income and adjusted EBITDA to measure financial performance on an
ongoing basis. These measures are not recognized in accordance with
GAAP and should not be viewed as an alternative to GAAP measures of
performance. In evaluating these adjusted measures, the reader
should be aware that in the future Mirant may incur expenses
similar to the adjustments set forth above. Adjusted Net Income and
Adjusted EBITDA Quarter Ending September 30, 2005 (in millions)
Continuing Discontinued Operations Operations Total Income (loss)
from operations $(1,559) $44 $(1,515) Mark-to-market gains 471 2
473 Loss (gain) on sales of assets, net 2 (2) - Other impairment
losses and restructuring 2 - 2 Reorganization items, net 83 25 108
Other - 1 1 Adjusted net income (loss) $(1,001) $70 $(931)
Provision for income taxes - 56 56 Interest, net 1,168 19 1,187
Amortization of transition power agreements (9) (1) (10)
Depreciation and amortization 33 43 76 Adjusted EBITDA $191 $187
$378 Adjusted net income and adjusted EBITDA are non-GAAP financial
measures. Management and some members of the investment community
utilize adjusted net income and adjusted EBITDA to measure
financial performance on an ongoing basis. These measures are not
recognized in accordance with GAAP and should not be viewed as an
alternative to GAAP measures of performance. In evaluating these
adjusted measures, the reader should be aware that in the future
Mirant may incur expenses similar to the adjustments set forth
above. Adjusted Net Income and Adjusted EBITDA Year to Date
September 30, 2005 (in millions) Continuing Discontinued Operations
Operations Total Income (loss) from operations $(1,604) $90
$(1,514) Mark-to-market losses (gains) 401 (2) 399 Loss (gain) on
sales of assets, net 29 (3) 26 Other impairment losses and
restructuring 13 - 13 Reorganization items, net 115 85 200 Other 10
(4) 6 Adjusted net income (loss) $(1,036) $166 $(870) Provision
(benefit) for income taxes (28) 116 88 Interest, net 1,175 63 1,238
Amortization of transition power agreements (9) (4) (13)
Depreciation and amortization 100 128 228 Adjusted EBITDA $202 $469
$671 Adjusted net income and adjusted EBITDA are non-GAAP financial
measures. Management and some members of the investment community
utilize adjusted net income and adjusted EBITDA to measure
financial performance on an ongoing basis. These measures are not
recognized in accordance with GAAP and should not be viewed as an
alternative to GAAP measures of performance. In evaluating these
adjusted measures, the reader should be aware that in the future
Mirant may incur expenses similar to the adjustments set forth
above. Third Quarter 2006 Pro Forma Adjusted EBITDA Guidance to
Expected Cash Flow from Operations For the years ending December
31, 2006 and 2007 (in millions) Year Year Period Ending Ending
Ending Dec. 31, Dec. 31, June 30 2006 2006 2007 Contin- Discon-
Contin- Discon- uing tinued uing tinued Opera- Opera- Opera- Opera-
tions tions Total tions tions Total U.S. realized gross margin
$1,338 $139 $1,477 $1,693 $47 $1,740 U.S. O&M and other (719)
(47) (766) (731) (25) (756) International businesses adj. EBITDA -
551 551 - 277 277 Adjusted EBITDA $619 $643 $1,262 $962 $299 $1,261
Interest, net (205) (87) (292) (228) (59) (287) Income taxes paid
(2) (232) (234) (7) (91) (98) Working capital changes 391 (29) 362
(113) - (113) Adjusted cash flow from operations $803 $295 $1,098
$614 $149 $763 Cash payments under plan of reorganization (802) -
(802) - - - Bankruptcy charges and pre- petition disputes (28) -
(28) - - - Prepayment penalty and stamp tax - (5) (5) - - - Cash
provided by (used in) operating activities $(27) $290 $263 $614
$149 $763 Adjusted EBITDA and adjusted cash flow from operations
are non-GAAP financial measures. Management and some members of the
investment community utilize adjusted EBITDA and adjusted cash flow
from operations to measure financial performance on an ongoing
basis. These measures are not recognized in accordance with GAAP
and should not be viewed as an alternative to GAAP measures of
performance. Cash and Cash Equivalents to Liquidity At September
30, 2006 (in millions) Continuing Discontinued Operations
Operations Total Cash and cash equivalents $1,008 $212 $1,220 Less
reserved cash required for operating, working capital or other
purposes or restricted by the subsidiaries' debt agreements (128)
Available under credit facilities 815 Total available liquidity
$1,695 Liquidity is a non-GAAP financial measure. Management and
some members of the investment community utilize liquidity to
measure financial performance on an ongoing basis. This measure is
not recognized in accordance with GAAP and should not be viewed as
an alternative to GAAP measures of performance. Adjusted Net Cash
Provided by Operating Activities (in millions) 3 Months Ended 9
Months Ended September 30, September 30, 2006 2006 Net cash
provided by operating activities $388 $274 Bankruptcy payments 8
765 Adjusted net cash provided by operating activities $396 $1,039
Adjusted net cash provided by operating activities is a non-GAAP
financial measure. Management and some members of the investment
community utilize adjusted net cash provided by operating
activities to measure financial performance on an ongoing basis.
This measure is not recognized in accordance with GAAP and should
not be viewed as an alternative to GAAP measures of performance.
Total Debt from Continuing and Discontinued Operations (in
millions) September 30, December 31, 2006 2005 Continuing
operations: Current portion of long-term debt $91 $3 Long-term debt
3,186 2,579 Total debt - continuing operations $3,277 $2,582
Discontinued operations: Short-term debt $30 $32 Current portion of
long-term debt 154 391 Long-term debt 1,198 728 Total debt -
discontinued operations $1,382 $1,151 Total outstanding debt $4,659
$3,733 Total outstanding debt is a non-GAAP financial measure.
Management and some members of the investment community utilize
total outstanding debt to measure financial performance on an
ongoing basis. This measure is not recognized in accordance with
GAAP and should not be viewed as an alternative to GAAP measures of
performance. Cautionary Language Regarding Forward-Looking
Statements Some of the statements included herein involve
forward-looking information. Mirant cautions that these statements
involve known and unknown risks and that there can be no assurance
that such results will occur. There are various important factors
that could cause actual results to differ materially from those
indicated in the forward-looking statements, such as, but not
limited to, legislative and regulatory initiatives regarding
deregulation, regulation or restructuring of the electric utility
industry; changes in state, federal and other regulations
(including rate and other regulations); changes in, or changes in
the application of, environmental and other laws and regulations to
which Mirant and its subsidiaries and affiliates are or could
become subject; the failure of Mirant's assets to perform as
expected, including outages for unscheduled maintenance or repairs;
Mirant's ability to divest all of its non-U.S. businesses, which
are located in the Philippines and the Caribbean, and certain of
its U.S. intermediate and peaking natural gas-fired assets at
prices and on terms that it would be willing to accept, as well as
any adverse impacts on its credit ratings that may result from such
sales; changes in market conditions, including developments in the
supply, demand, volume and pricing of electricity or the extent and
timing of the entry of additional competition in Mirant's markets
or those of its subsidiaries and affiliates; increased margin
requirements, market volatility or other market conditions that
could increase Mirant's obligations to post collateral beyond
amounts which are expected; Mirant's inability to access
effectively the over-the-counter and exchange-based commodity
markets or changes in commodity market liquidity or other commodity
market conditions, which may affect Mirant's ability to engage in
asset hedging and proprietary trading activities as expected;
Mirant's ability to borrow additional funds and access capital
markets; strikes, union activity or labor unrest; Mirant's
inability to enter into intermediate and long-term contracts to
sell power and procure fuel, including its transportation, on terms
and prices acceptable to it; weather and other natural phenomena,
including hurricanes and earthquakes; war, terrorist activities or
the occurrence of a catastrophic loss; environmental regulations
that restrict Mirant's ability to operate its business; price
mitigation strategies employed by independent system operators or
regional transmission organizations that reduce Mirant's revenue
and may result in a failure to compensate Mirant's generation units
adequately for all their costs; volatility in Mirant's gross margin
as a result of its accounting for derivative financial instruments
used in its asset management activities and volatility in its cash
flow from operations resulting from working capital requirements,
including collateral, to support its asset management and
proprietary trading activities; deterioration in the financial
condition of Mirant's customers or counterparties and the resulting
failure to pay amounts owed to Mirant or to perform obligations or
services due to Mirant; the disposition of the pending litigation
described in Mirant's Form 10-K for the year ended December 31,
2005 and Form 10-Q for the quarter ended September 30, 2006 filed
with the Securities and Exchange Commission; factors that affect
Mirant's international operations, such as political instability,
local security concerns, tax increases, expropriation of property,
cancellation of contract rights and environmental regulations; the
inability of Mirant's operating subsidiaries to generate sufficient
cash flow and Mirant's inability to access that cash flow to enable
Mirant to make debt service and other payments; the resolution of
claims and obligations that were not resolved during the Chapter 11
process that may have a material adverse effect on Mirant's results
of operations; and other factors discussed in Mirant's Form 10-K
for the year ended December 31, 2005 and its Form 10-Q for the
quarter ended September 30, 2006. Mirant undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. The Adjusted
EBITDA guidance is an estimate as of today's date, November 9,
2006, and is based on assumptions believed to be reasonable as of
such date. Mirant expressly disclaims any current intention to
update such guidance. The foregoing review of factors that could
cause Mirant's actual results to differ materially from those
contemplated in the forward-looking statements included in this
news release should be considered in connection with information
regarding risks and uncertainties that may affect Mirant's future
results included in Mirant's filings with the Securities and
Exchange Commission at http://www.sec.gov/. Stockholder inquiries:
678 579 7777 DATASOURCE: Mirant CONTACT: Media, Camille Evans,
+1-678-579-5677, or , or Investors, Mary Ann Arico,
+1-678-579-7553, or , or Sarah Stashak, +1-678-579-6940, or , or
Stockholder inquiries, +1-678-579-7777, all of Mirant Web site:
http://www.mirant.com/
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