Mirant Reports Results for Second Quarter 2007 and Completion of Divestiture Program
August 09 2007 - 8:30AM
PR Newswire (US)
* Net income of $1.256 billion versus net income of $99 million for
the second quarter of 2006 ATLANTA, Aug. 9 /PRNewswire-FirstCall/
-- Mirant Corporation (NYSE:MIR) today reported net income of
$1.256 billion for the quarter ended June 30, 2007, compared to net
income of $99 million for the same period in 2006. Results for 2007
include an after-tax gain of $1.3 billion on the sale of the
Philippine business. Diluted earnings per share for the second
quarter of 2007 were $4.91 per share, compared to $0.32 per diluted
share for the same period in 2006. Mirant reported adjusted net
income from continuing operations of $162 million for the second
quarter of 2007, or diluted earnings per share of $0.57, compared
to a loss of $1 million for the same period in 2006. Adjusted net
income excludes unrealized mark-to-market gains and losses and
other non- recurring items, including a $175 million impairment in
2007 related to the Lovett generation facility. Adjusted EBITDA
from continuing operations, which also excludes unrealized
mark-to-market gains and losses, a $175 million impairment in 2007
related to the Lovett generation facility and other non-recurring
items, was $230 million for the second quarter of 2007, compared to
$83 million for the same period in 2006. Both the second quarter of
2007 and the second 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 and favorable fuel oil management activities. Net
cash provided by operating activities during the second quarter of
2007 was $286 million excluding bankruptcy payments of $22 million.
Net cash provided by operating activities for the first six months
of 2007 was $543 million excluding bankruptcy payments of $28
million. Year-to-Date Net income for the first six months of 2007
was $1.204 billion compared to $566 million for the same period in
2006. Results for 2007 include an after- tax gain of $1.3 billion
on the sale of the Philippine business. Diluted earnings per share
for the first six months of 2007 were $4.70 per share, compared to
$1.84 per diluted share for the same period in 2006. Mirant
reported adjusted net income from continuing operations of $291
million for the first six months of 2007, or diluted earnings per
share of $1.03, compared to adjusted net income of $88 million for
the same period in 2006, or $0.28 earnings per diluted share.
Adjusted net income excludes unrealized mark-to-market gains and
losses and other non-recurring items including a $175 million
impairment in 2007 related to the Lovett generation facility.
Adjusted EBITDA from continuing operations, which also excludes
unrealized mark-to-market gains and losses, a $175 million
impairment in 2007 related to the Lovett generation facility and
other non-recurring items, was $451 million for the first six
months of 2007, compared to $264 million for the same period in
2006. Both the first six months of 2007 and first six months of
2006 benefited from incremental realized value from hedging. The
period over period increase was principally due to higher realized
gross margin in the Mid-Atlantic and favorable fuel oil management
activities. As of June 30, 2007, the company's continuing
operations had cash and cash equivalents of $5.673 billion, total
available liquidity of $6.386 billion and total outstanding debt of
$3.139 billion. Completion of Divestiture Program Mirant announced
that it has closed the previously announced sale of its Caribbean
business to a subsidiary of the Marubeni Corporation. The net
proceeds to Mirant after transaction costs are $553 million. "This
completes the divestiture program that we announced approximately a
year ago with total net proceeds of $5.076 billion," said Edward R.
Muller, chairman and chief executive officer. "Mirant's operations
are now exclusively in the United States." Earnings Call Mirant is
hosting an earnings call today to discuss its second quarter 2007
financial results and outline business priorities. The call will be
held from 10:00 a.m. to 11:00 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 866 293 8970
(International 913 312 1230) and entering pass code 4738382.
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 4738382.
Mirant is a competitive energy company that produces and sells
electricity in the United States. Mirant owns or leases
approximately 10,300 megawatts of electric generating capacity. 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 June 30, 2007
--------------------------------------------------------------------------
(in millions) EPS(1) -------- Net income $1,256 $4.91 Income from
discontinued operations 1,339 5.23 -------- -------- Loss from
continuing operations (83) (0.32) Adjustment to GAAP EPS for
dilution 0.03 -------- Diluted EPS (0.29) Mark-to-market loss 91
0.32 Gain on sales of assets, net (21) (0.07) Impairment loss 175
0.61 Bankruptcy charges and legal contingencies 16 0.06 Bonus plan
for dispositions 6 0.02 Benefit for income taxes (valuation
allowance adjustment) (22) (0.08) -------- -------- Adjusted net
income $162 $0.57 ======== Provision for income taxes 7 Interest,
net 29 Depreciation and amortization 32 -------- Adjusted EBITDA
$230 ========
--------------------------------------------------------------------------
1 Total diluted shares: 286 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 June 30, 2007
--------------------------------------------------------------------------
(in millions) EPS(1) -------- Net income $1,204 $4.70 Income from
discontinued operations 1,420 5.54 -------- -------- Loss from
continuing operations (216) (0.84) Adjustment to GAAP EPS for
dilution 0.08 -------- Diluted EPS (0.76) Mark-to-market loss 396
1.40 Gain on sales of assets, net (23) (0.08) Impairment loss 175
0.62 Bankruptcy charges and legal contingencies 26 0.09 Bonus plan
for dispositions 14 0.05 Postretirement benefit curtailment (32)
(0.12) Benefit for income taxes (valuation allowance adjustment)
(49) (0.17) -------- -------- Adjusted net income $291 $1.03
======== Provision for income taxes 19 Interest, net 77
Depreciation and amortization 64 -------- Adjusted EBITDA $451
========
--------------------------------------------------------------------------
1 Total diluted shares: 283 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 June 30, 2006
--------------------------------------------------------------------------
(in millions) EPS(1) -------- Net income $99 $0.32 Loss from
discontinued operations (8) (0.03) -------- -------- Income from
continuing operations 107 0.35 Mark-to-market gain (110) (0.36)
Gain on sales of assets, net (6) (0.02) Gain on sales of
investments, net (3) (0.01) Bankruptcy charges and legal
contingencies 11 0.04 -------- -------- Adjusted net loss $(1) $ -
======== Provision for income taxes 1 Interest, net 48 Depreciation
and amortization 35 -------- Adjusted EBITDA $83 ========
--------------------------------------------------------------------------
1 Total diluted shares: 308 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 June 30, 2006 (in millions)
--------------------------------------------------------------------------
EPS(1) -------- Net income $566 $1.84 Income from discontinued
operations 36 0.12 -------- -------- Income from continuing
operations 530 1.72 Mark-to-market gain (410) (1.33) Gain on sales
of assets, net (46) (0.15) Gain on sales of investments, net (3)
(0.01) Bankruptcy charges and legal contingencies 17 0.05 --------
-------- Adjusted net income $88 $0.28 ======== Provision for
income taxes 2 Interest, net 106 Depreciation and amortization 68
-------- Adjusted EBITDA $264 ========
--------------------------------------------------------------------------
1 Total diluted shares: 308 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. 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;
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 oil 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 a failure to compensate Mirant's generation units
adequately for all their costs; changes in the rules used to
calculate capacity and energy payments in the markets in which
Mirant operates; 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 its transportation, on terms and prices acceptable
to it; 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 contained in its 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 June 30,
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/. Stockholder inquiries: 678 579 7777
DATASOURCE: Mirant Corporation CONTACT: Media, Felicia Browder,
+1-678-579-3111, , or Investor Relations, Mary Ann Arico,
+1-678-579-7553, , both of Mirant Corporation Web site:
http://www.mirant.com/
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