Mirant Announces Strong 2007 Results, Authorization of Further Share Repurchases and 2009 Guidance
February 29 2008 - 7:30AM
PR Newswire (US)
- 2007 net income from continuing operations of $433 million
compared to 2006 net income from continuing operations of $1.752
billion ATLANTA, Feb. 29 /PRNewswire-FirstCall/ -- Mirant
Corporation (NYSE:MIR) today reported that net income from
continuing operations for the year 2007 was $433 million compared
to $1.752 billion for the year 2006. Diluted earnings per share
from continuing operations for the year 2007 were $1.56 per share,
compared to diluted earnings per share from continuing operations
of $5.90 for the year 2006. Year Ending Year Ending (in millions
except per share) December 31, 2007 December 31, 2006
----------------- ----------------- Per Diluted Per Diluted Share
Share ------- ------- Net income $1,995 $7.20 $1,864 $6.28 Income
from discontinued operations 1,562 5.64 112 0.38 ------- -------
------- ------- Income from continuing operations 433 1.56 1,752
5.90 Unrealized (gains) and losses 536 1.94 (655) (2.21) Impairment
losses 175 0.63 119 0.40 New York property tax settlement - - (221)
(0.74) Pepco settlement (362) (1.31) - - Benefit for income taxes -
- (552) (1.86) Other 23 0.09 (134) (0.45) ------- ------- -------
------- Adjusted net income $805 $2.91 $309 $1.04 ======= =======
Interest, taxes, depreciation & amortization 183 339 -------
------- Adjusted EBITDA $988 $648 ======= ======= Mirant reported
higher adjusted net income from continuing operations of $805
million for the year 2007, or diluted earnings per share of $2.91,
compared to adjusted net income from continuing operations of $309
million for the year 2006, or diluted earnings per share of $1.04.
The year over year increase resulted principally from higher energy
prices and capacity revenues, the Pepco settlement, lower net
interest because of increased cash balances from dispositions
completed in 2007, and higher realized results from fuel oil
management activities. Adjusted EBITDA from continuing operations
for the year 2007 was $988 million, compared to $648 million for
the year 2006, a 52 percent increase. The year over year increase
resulted principally from higher energy prices and capacity
revenues, the Pepco settlement, and higher realized results from
fuel oil management activities. Net cash provided by operating
activities of continuing operations for the year 2007 was $786
million compared to $137 million for the year 2006. As of December
31, 2007, the company had cash and cash equivalents of $4.961
billion and total outstanding debt of $3.095 billion. As of
December 31, 2007, $697 million in cash and cash equivalents was
restricted at Mirant North America and its subsidiaries and not
available for distribution to Mirant. Fourth Quarter 2007 versus
Fourth Quarter 2006 Net income from continuing operations was $7
million for the quarter ending December 31, 2007, compared to net
income from continuing operations of $974 million for the same
period in 2006. Diluted earnings per share from continuing
operations for the fourth quarter of 2007 were $0.03 per share,
compared to diluted earnings per share from continuing operations
of $3.59 for the same period in 2006. Quarter Ending Quarter Ending
(in millions except per share) December 31, 2007 December 31, 2006
----------------- ----------------- Per Diluted Per Diluted Share
Share ------- ------- Net income $16 $0.06 $1,324 $4.88 Income from
discontinued operations 9 0.03 350 1.29 ------- ------- -------
------- Income from continuing operations 7 0.03 974 3.59
Unrealized (gains) and losses 153 0.58 (17) (0.06) New York
property tax settlement - - (221) (0.81) Benefit for income taxes -
- (552) (2.04) Other 31 $0.11 (90) (0.33) ------- ------- -------
------- Adjusted net income $191 $0.72 $94 $0.35 ======= =======
Interest, taxes, depreciation & amortization 23 80 -------
------- Adjusted EBITDA $214 $174 ======= ======= Mirant reported
higher adjusted net income from continuing operations of $191
million for the fourth quarter of 2007, or diluted earnings per
share of $0.72, compared to adjusted net income from continuing
operations of $94 million for the same period in 2006, or diluted
earnings per share of $0.35. The period over period increase for
the quarter resulted principally from higher energy prices and
capacity revenues in the Mid-Atlantic region, lower net interest
because of increased cash balances from dispositions completed
earlier in 2007, offset by lower realized value from hedging.
Fourth quarter adjusted EBITDA from continuing operations was $214
million, a 23 percent increase compared to adjusted EBITDA from
continuing operations of $174 million for the same period in 2006.
The period over period increase for the quarter resulted
principally from higher energy and capacity revenues in the
Mid-Atlantic region offset by lower realized value from hedging.
Net cash provided by operating activities of continuing operations
during the fourth quarter of 2007 was $116 million compared to $116
million in the same period of 2006. Return of Cash to Stockholders
On November 9, 2007, Mirant announced it would return a total of
$4.6 billion in excess cash to stockholders. The first stage
consisted of an accelerated share repurchase for $1 billion plus
open market purchases of $1 billion. "We have made good progress on
our previously announced share repurchase program and through
February 25, 2008, Mirant has purchased $1.602 billion of stock,
reducing basic shares outstanding to just under 214 million," said
Edward R. Muller, chairman and chief executive officer. "We have
decided to return the remaining $2.6 billion through open market
purchases, but will continue to evaluate the most efficient method
to return the cash to stockholders." Guidance Mirant today raised
its 2008 adjusted EBITDA guidance from $907 to $925 million and
provided initial 2009 adjusted EBITDA guidance of $1.011 billion.
Earnings Call Mirant is hosting an earnings call today to discuss
its fourth quarter and year-end 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 866 279 2899 (International 913 312 0408) and
entering pass code 6746677. 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
6746677. Mirant is a competitive energy company that produces and
sells electricity in the United States. Mirant owns or leases
approximately 10,280 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/ Fourth Quarter
Income Statement Mirant Corporation and Subsidiaries Consolidated
Statement of Operations Quarter Ending Quarter Ending December 31,
2007 December 31, 2006 ----------------- ----------------- (in
millions) Operating revenues $409 $548 Cost of fuel, electricity
and other products 213 235 ------- ------- Gross Margin 196 313
------- ------- Operating Expenses: Operations and maintenance 188
60 Depreciation and amortization 32 34 Impairment losses - (1) Gain
on sales of assets, net (21) - ------- ------- Total operating
expenses 199 93 ------- ------- Operating Income (Loss) (3) 220
------- ------- Other Expense (Income), net: Interest expense 57 77
Interest income (66) (18) Gain on sales of investments, net - (59)
Other, net (1) (38) ------- ------- Total other expense (income),
net (10) (38) ------- ------- Income From Continuing Operations
Before Reorganization Items and Income Taxes 7 258 Reorganization
items, net - (164) Provision (benefit) for income taxes - (552)
------- ------- Income From Continuing Operations 7 974 -------
------- Income from Discontinued Operations, net 9 350 -------
------- Net Income $16 $1,324 ======= ======= Regulation G
Reconciliations Net Income to Adjusted Net Income and Adjusted
EBITDA ----------------------------------------------------- Year
Ending Year Ending ----------------- ----------------- (in millions
except per share) December 31, 2007 December 31, 2006
----------------- ----------------- Per Diluted Per Diluted Share
(1) Share (1) ------- ------- Net income $1,995 $7.20 $1,864 $6.28
Income from discontinued operations 1,562 5.64 112 0.38 -------
------- ------- ------- Income from continuing operations 433 1.56
1,752 5.90 Unrealized (gains) and losses 536 1.94 (655) (2.21) Gain
on sales of assets (excluding emissions allowances), net (22)
(0.08) (49) (0.16) Impairment loss for our Lovett facility 175 0.63
- - Impairment loss for Bowline suspended construction - - 119 0.40
Gain on sale of investment in InterContinental Exchange, etc., net
- - (76) (0.26) Potrero tax settlement - - (4) (0.01) California
Contra Costa unit 8 settlement gain - - (26) (0.09) NY property tax
settlement (prior years) - - (221) (0.74) Bankruptcy charges and
legal contingencies 48 0.18 21 0.07 Severance and bonus plan for
dispositions 27 0.10 - - Pepco settlement of Back-to-Back agreement
(362) (1.31) - - Credit defaults in PJM 2 0.01 - - Postretirement
benefit curtailment (32) (0.12) - - Benefit for income taxes
(valuation allowance adjustment) - - (552) (1.86) ------- -------
------- ------- Adjusted net income $805 $2.91 $309 $1.04 =======
======= Provision for income taxes 9 2 Interest, net 45 200
Depreciation and amortization 129 137 ------- ------- Adjusted
EBITDA $988 $648 ======= =======
-----------------------------------------------------------------------
(1) Total diluted shares of 277 million for 2007 and 297 million
for 2006 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. Net Income to Adjusted Net Income and Adjusted EBITDA
----------------------------------------------------- Quarter
Ending Quarter Ending ----------------- ----------------- (in
millions except per share) December 31, 2007 December 31, 2006
----------------- ----------------- Per Diluted Per Diluted Share
(1) Share (1) ------- ------- Net income $16 $0.06 $1,324 $4.88
Income from discontinued operations 9 0.03 350 1.29 ------- -------
------- ------- Income from continuing operations 7 0.03 974 3.59
Unrealized (gains) and losses 153 0.58 (17) (0.06) Gain on sales of
assets (excluding emissions allowances), net 1 0.00 - - Reduction
of previous impairment charge - - (1) (0.00) Gain on sale of
investment in InterContinental Exchange, etc., net - - (59) (0.22)
California Contra Costa unit 8 settlement gain - - (26) (0.10) NY
property tax settlement (prior years) - - (221) (0.81) Bankruptcy
charges and legal contingencies 23 0.08 (4) (0.01) Severance and
bonus plan for dispositions 5 0.02 - - Credit defaults in PJM 2
0.01 - - Benefit for income taxes (valuation allowance adjustment)
- - (552) (2.04) ------- ------- ------- ------- Adjusted net
income $191 $0.72 $94 $0.35 ======= ======= Provision for income
taxes - - Interest, net (9) 46 Depreciation and amortization 32 34
------- ------- Adjusted EBITDA $214 $174 ======= =======
-----------------------------------------------------------------------
(1) Total diluted shares of 264 million for 2007 and 271 million
for 2006 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. Current Expected Cash Flow from Operations to Pro
Forma Adjusted EBITDA Guidance For the years ending December 31,
2008 and 2009
-----------------------------------------------------------------------
(in millions) Year Ending Year Ending December 31, 2008 December
31, 2009 ----------------------------------- Net cash provided by
operating activities of continuing operations $811 $851 Emission
allowance sales proceeds 20 9 Capitalized interest (57) (87)
------- ------- Adjusted cash flow from operations $774 $773
Interest, net (including amounts capitalized) 162 195 Income taxes
paid 14 15 Working capital and other changes (25) 28 -------
------- Adjusted EBITDA $925 $1,011 ======= =======
------------------------------------------------------------------------
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. Previous Expected Cash Flow from Operations to Pro
Forma Adjusted EBITDA Guidance For the year ending December 31,
2008
------------------------------------------------------------------------
(in millions) Year Ending December 31, 2008
-------------------------------- Net cash provided by operating
activities of continuing operations $806 Emission allowance sales
proceeds 20 Capitalized interest (57) ------- Adjusted cash flow
from operations $769 Interest, net (including amounts capitalized)
65 Income taxes paid 35 Working capital and other changes 38
------- Adjusted EBITDA $907 =======
-------------------------------------------------------------------------
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. 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 (the
"electricity industry"); changes in state, federal and other
regulations affecting the electricity industry (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 plants 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; changes in the credit standards of market participants 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 that 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 Mirant's 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; 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; 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-K for the year
ended December 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/. 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, , or Steve Himes, +1-678-579-3655, , Stockholder
inquiries, +1-678-579-7777, all of Mirant Corporation Web site:
http://www.mirant.com/
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