Mirant Reports Results for First Quarter 2007
May 10 2007 - 8:30AM
PR Newswire (US)
- A net loss of $52 million versus net income of $467 million for
the first quarter of 2006 principally driven by a net change of
$605 million for unrealized mark-to market gains and losses
ATLANTA, May 10 /PRNewswire-FirstCall/ -- Mirant Corporation
(NYSE:MIR) today reported a net loss of $52 million for the quarter
ended March 31, 2007, compared to net income of $467 million for
the same period in 2006, principally driven by a net change of $605
million for unrealized mark-to market gains and losses. Diluted per
share results for the first quarter of 2007 were a loss of $0.20
per share, compared to income of $1.51 per diluted share for the
same period in 2006. Mirant reported adjusted net income of $218
million for the first quarter of 2007, or earnings per diluted
share of $0.78, compared to adjusted net income for the first
quarter of 2006 of $142 million, or earnings per diluted share of
$0.46. Adjusted net income excludes unrealized mark-to-market gains
and losses and other non-recurring items. Adjusted EBITDA from
continuing operations, which excludes unrealized mark-to-market
gains and losses and other non-recurring items, was $220 million
for the quarter, compared to $182 million for the same period in
2006. Both the first quarter of 2007 and the first quarter of 2006
benefited from incremental realized value from hedging. The period
over period increase for the quarter was principally due to higher
realized gross margin in the Mid- Atlantic segment. "We are pleased
with our 21% increase in adjusted EBITDA. The hedges we had in
place during the quarter offset the negative effect of mild weather
in the first half of the quarter, while colder weather in the
second half of the quarter allowed us to capture additional value
from the market," said Edward R. Muller, chairman and chief
executive officer. Net cash provided by operating activities during
the first quarter of 2007 was $251 million. As of March 31, 2007,
the company's continuing operations had cash and cash equivalents
of $1.124 billion, total available liquidity of $1.761 billion and
total outstanding debt of $3.141 billion. Adjusted EBITDA from
discontinued operations, which excludes unrealized mark-to-market
gains and losses and other non-recurring items, was $148 million
for the quarter, compared to $158 million for the same period in
2006. Earnings Call Mirant is hosting an earnings call today to
discuss its first quarter 2007 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 1431946. 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 12:00 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 1431946. 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 13,550 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 March 31, 2007
--------------------------------------------------------------------------
(in millions) Continu- Discon- ing tinued Opera- Opera- Total tions
EPS(1) tions EPS(1) Total EPS(1) ------- ------ ------ ---- -----
----- Net income (loss) $(134) ($0.52) $82 $0.32 $(52) ($0.20)
Adjustment to GAAP EPS for dilution - 0.04 - (0.03) - 0.01 ------
---- ----- Diluted EPS - (0.48) - 0.29 - (0.19) Mark-to-market
losses 305 1.10 6 0.02 311 1.12 Gain on sales of assets, net (2)
(0.01) (15) (0.05) (17) (0.06) Bankruptcy charges and legal
contingencies 10 0.04 - - 10 0.04 Bonus plan for dispositions 8
0.03 - - 8 0.03 Postretirement benefit curtailment (32) (0.12) - -
(32) (0.12) Prior year tax adjustment - - (54) (0.20) (54) (0.20)
Sual outage adjustments, net of taxes - - 27 0.10 27 0.10 Benefit
for income taxes (valuation allowance adjustment) (27) (0.10) 44
0.16 17 0.06 ------- ------ ----- ----- ----- ----- Adjusted net
income $128 $0.46 $90 $0.32 $218 $0.78 ====== ===== ===== Provision
for income taxes 12 32 44 Interest, net 48 24 72 Depreciation and
amortization 32 2 34 ------ ------ ------ Adjusted EBITDA $220 $148
$368 ====== ====== ====== (1) Total diluted shares: 278 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 March
31, 2006
--------------------------------------------------------------------------
(in millions) Continu- Discon- ing tinued Opera- Opera- Total tions
EPS(1) tions EPS(1) Total EPS(1) ------- ------ ------ ---- -----
----- Net income $424 $1.37 $43 $0.14 $467 $1.51 Mark-to-market
losses (gains) (300) (0.97) 2 0.01 (298) (0.96) Gain on sales of
assets, net (40) (0.13) - - (40) (0.13) Impairment loss on minority
owned affiliates - - 7 0.02 7 0.02 Bankruptcy charges 6 0.02 - - 6
0.02 ------- ------ ------ ---- ----- ----- Adjusted net income $90
$0.29 $52 $0.17 $142 0.46 ====== ==== ===== Provision for income
taxes 1 46 47 Interest, net 58 18 76 Depreciation and amortization
33 42 75 ------ ------ ------ Adjusted EBITDA $182 $158 $340 ======
====== ====== (1) Total diluted shares: 309 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. Cash and
Cash Equivalents to Liquidity At March 31, 2007
--------------------------------------------------------------------------
(in millions) Continuing Operations ----------------------- Cash
and cash equivalents $1,124 Less: cash restricted due to bankruptcy
of New York entities and reserved for working capital or other
purposes (146) Available under credit facilities 783 -------- Total
available liquidity $1,761 ========
--------------------------------------------------------------------------
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. 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 industry of generating, transmitting and distributing
electricity; 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 repair,
Mirant's ability to consummate the sale of its Philippine and
Caribbean business, 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 and other commodities in the energy
markets, 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 management and proprietary
trading activities as expected, or result in material extraordinary
gains or losses from open positions in fuel or other commodities;
deterioration in the financial condition of our counterparties and
the resulting failure to pay amounts owed to Mirant or to perform
obligations due to Mirant beyond collateral posted; hazards
customary to the power generation industry and the possibility that
Mirant may not have adequate insurance to cover losses as a result
of such hazards; price mitigation strategies employed by ISOs or
RTOs that reduce Mirant's revenue and may result in failure to
compensate Mirant's generation units adequately for all their
costs; volatility in Mirant's gross margin as a result of Mirant's
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; Mirant's inability to enter into intermediate and
long-term contracts to sell power and procure fuel, including
transportation, on terms and prices acceptable to it; legislative
and regulatory initiatives and changes in the application of laws
and regulations by nations and local governments, including
increases in tax rates or assessments, in non U.S. jurisdictions in
which Mirant's subsidiaries operate; factors that affect
international subsidiaries, 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 to support its operations; Mirant's ability to borrow
additional funds and access capital markets; strikes, union
activity or labor unrest; weather and other natural phenomena,
including hurricanes and earthquakes; the cost and availability of
emissions allowances; Mirant's ability to obtain adequate supply
and delivery of fuel for its facilities; curtailment of operations
due to transmission constraints; environmental regulations that
restrict Mirant's ability or render it uneconomic to operate its
business, including regulations related to the emission of carbon
dioxide and other greenhouse gases; Mirant's inability to complete
construction of emissions reduction equipment by January 2010 to
meet the requirements of the Maryland Healthy Air Act, which may
result in reduced unit operations and reduced cash flows and
revenues from operations; war, terrorist activities or the
occurrence of a catastrophic loss; the fact that the Mirant Lovett
facility remains in bankruptcy; Mirant's substantial consolidated
indebtedness and the possibility that Mirant or its subsidiaries
may incur additional indebtedness in the future; restrictions on
the ability of Mirant's subsidiaries to pay dividends, make
distributions or otherwise transfer funds to Mirant, including
restrictions on Mirant North America and Mirant Asia-Pacific
Limited contained in their financing agreements and restrictions on
Mirant Mid-Atlantic contained in its leveraged lease documents,
which may affect Mirant's ability to access the cash flow of those
subsidiaries to make debt service and other payments; and, the
disposition of the pending litigation described in Mirant's Form
10-Q for the quarter ended March 31, 2007, filed with the
Securities and Exchange Commission. Mirant undertakes no obligation
to update publicly or revise any forward- looking statements to
reflect events or circumstances that may arise. 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/.
DATASOURCE: Mirant Corporation CONTACT: Felicia Browder,
+1-678-579-3111, ; Investor Relations: Mary Ann Arico,
+1-678-579-7553, ; or Sarah Stashak, +1-678-579-6940, , all of
Mirant; or Stockholder inquiries: +1-678-579-7777 Web site:
http://www.mirant.com/
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