* Net Income of $99 million versus a net loss of $10 million for
the second quarter of 2005 ATLANTA, Aug. 9 /PRNewswire-FirstCall/
-- Mirant Corporation (NYSE:MIR) today reported net income of $99
million for the quarter ended June 30, 2006, as compared to a net
loss of $10 million for the same period in 2005. For the first six
months of 2006, Mirant reported net income of $566 million,
compared to $1 million for the first six months of 2005. Earnings
per share for the quarter ended June 30, 2006, were $0.32 per
diluted share and for the first six months of 2006 were $1.84 per
diluted share. Excluding unrealized mark-to-market gains of $108
million, a $72 million write off of a deferred tax asset related to
the Philippines business, and other non-recurring charges, Mirant
reported adjusted net income for the second quarter of 2006 of $68
million, resulting in adjusted earnings per diluted share of $0.22.
Adjusted net income for the first six months of 2006 was $210
million, resulting in adjusted earnings per diluted share of $0.68.
Adjusted EBITDA for the quarter was $255 million, compared to $119
million for the same period in 2005. For the first six months of
2006, adjusted EBITDA was $595 million, compared to $288 million
for the same period in 2005. The period over period increases for
the quarter and the first half of the year resulted primarily from
the strong performance of the U.S. business. "Our U.S. business
performed well during the quarter and the first half of 2006. This
performance is due primarily to hedges entered into in earlier
periods, which protected Mirant from lower market prices during the
first half of the year resulting from milder than normal weather in
many parts of the country and a significant drop in natural gas
prices," said Edward R. Muller, chairman and chief executive
officer. "The company's hedging strategy continues to be effective
in helping to produce predictable financial results." Net cash
provided by operating activities during the second quarter was $132
million. Adjusting for bankruptcy payments during the period, net
cash provided by operating activities was $643 million in the first
six months of 2006. As of June 30, 2006, the company had cash and
cash equivalents of $1.8 billion, total available liquidity of
$2.13 billion, and total outstanding debt of $4.5 billion. Asset
Sales Today Mirant announced an auction process to sell various
U.S. intermediate and peaking gas fired assets. The U.S. assets to
be sold are the following intermediate and peaking gas fired
plants: Zeeland (837 MW), West Georgia (605 MW), Shady Hills (468
MW), Sugar Creek (535 MW), Bosque (532 MW) and Apex (527 MW),
representing a total of 3,504 MW. In 2005, on a pro-forma basis,
these assets contributed $77 million in adjusted EBITDA. For the
first six months of 2006, on a pro-forma basis, these assets
contributed $25 million in adjusted EBITDA. Initial estimates
indicate that an impairment loss will need to be recorded in the
third quarter of 2006 to reduce the carrying value of these assets
to fair value. While the amount of the impairment loss has not yet
been determined, the company currently estimates the total
impairment loss for the six plants will range from $500 to $700
million. JPMorgan will serve as financial advisor for the sale of
these U.S. assets. The decision announced today is in addition to
the one announced on July 11, 2006, to commence auction processes
to sell Mirant's international businesses in the Philippines (2,203
MW) and the Caribbean (1,050 MW). In 2005, on a pro-forma basis,
the Philippines and Caribbean businesses contributed $371 million
and $155 million in adjusted EBITDA, respectively. For the first
six months of 2006, on a pro-forma basis, the Philippines and
Caribbean businesses contributed $206 million and $92 million in
adjusted EBITDA, respectively. Certain of the sales will be subject
to regulatory and other approvals and consents. The planned sales
will result in these businesses and assets being reported as
discontinued operations beginning in the third quarter of 2006. The
sales are expected to close by mid-2007. Asset Sale Proceeds and
Continuing Business The continuing business of Mirant will consist
of 10,657 MW that are well positioned in key U.S. markets in the
Mid-Atlantic, the Northeast and California. As previously
announced, Mirant plans to continue returning cash to its
shareholders upon completion of the planned sales. The amount of
cash returned will be determined based on the outlook for the
continuing business (1) to preserve the credit profile of the
continuing business, (2) to maintain adequate liquidity for
expected cash requirements including, among other things, capital
expenditures for the continuing business, and (3) to retain
sufficient working capital to manage fluctuations in commodity
prices. Proceeds from the sales of the Zeeland and Bosque plants
will be utilized pursuant to the covenants contained in the Mirant
North America debt instruments. Guidance Mirant provided adjusted
EBITDA guidance for 2006 of $1.282 billion, which is comprised of
$645 million for the continuing business and $637 million for the
assets and businesses to be sold. For 2007, Mirant provided
adjusted EBITDA guidance of $1.585 billion, which is comprised of
$924 million for the continuing business and $661 million for the
assets and businesses to be sold. The guidance provided for 2007
includes the adjusted EBITDA for the full year of the businesses
and assets to be sold, even though the sales are expected to close
by mid-2007. The actual financial results for 2007 will depend on
the closing dates of the sales of those businesses and assets.
Earnings Call Mirant is hosting an earnings call today to discuss
its second quarter 2006 financial results and outline business
priorities. The call will be held from 9:00 a.m. to 10:00 a.m. EDT.
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 800.811.7286
(International 913.981.4902) and entering pass code 7976945.
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. EDT. A replay also
will be available by dialing 888.203.1112 (International
719.457.0820) and entering the pass code 7976945. 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 17,310 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 As Reported Adjusted Net Income and Adjusted EBITDA
Quarter Ending June 30, 2006 (in millions) EPS(1) Net income $99
$0.32 Mark-to-market gains (108) (0.35) Gain on sales of assets,
net (6) (0.02) Bankruptcy charges and pre-petition dispute 11 0.04
Write-off of Philippines deferred tax asset 72 0.23 Adjusted net
income $68 $0.22 Provision for income taxes 42 Interest, net 66
Depreciation and amortization 79 Adjusted EBITDA $255 (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. As Reported Adjusted Net Income and Adjusted
EBITDA Year to Date June 30, 2006 (in millions) EPS(1) Net income
$566 $1.84 Mark-to-market gains (406) (1.32) Gain on sales of
assets, net (46) (0.15) Impairment losses on minority owned
affiliates 7 0.02 Bankruptcy charges and pre-petition dispute 17
0.06 Write-off of Philippines deferred tax asset 72 0.23 Adjusted
net income $210 $0.68 Provision for income taxes 89 Interest, net
142 Depreciation and amortization 154 Adjusted EBITDA $595 (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. As Reported Adjusted
Net Loss and Adjusted EBITDA Quarter Ending June 30, 2005 (in
millions) Net loss $(10) Mark-to-market gains (81) Loss on sales of
assets, net 28 Other impairment losses and restructuring 8 Other,
net 6 Reorganization items, net 33 Discontinued operations 1
Adjusted net loss $(15) Provision for income taxes 35 Interest, net
25 Amortization of transition power agreements (2) Depreciation and
amortization 76 Adjusted EBITDA $119 Adjusted net loss and adjusted
EBITDA are non-GAAP financial measures. Management and some members
of the investment community utilize adjusted net loss 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. As Reported Adjusted Net Income and Adjusted
EBITDA Year to Date June 30, 2005 (in millions) Net income $1
Mark-to-market gains (70) Loss on sales of assets, net 25 Gain on
sale of investments (1) Other impairment losses and restructuring
10 Other, net 7 Reorganization items, net 94 Discontinued
operations (2) Adjusted net income $64 Provision for income taxes
32 Interest, net 51 Amortization of transition power agreements
(12) Depreciation and amortization 153 Adjusted EBITDA $288
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. As Reported Adjusted Net Cash Provided by Operating
Activities (in millions) 3 Months Ended 6 Months Ended June 30,
2006 June 30, 2006 Net cash provided by (used in) operating
activities $132 $(114) Bankruptcy payments 11 757 Adjusted net cash
provided by operating activities $143 $643 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. Cash and Cash
Equivalents to Liquidity At June 30, 2006 (in millions) Cash and
cash equivalents $1,796 Less reserved cash required for operating,
working capital or other purposes or restricted by the
subsidiaries' debt agreements (482) Available under credit
facilities 818 Total available liquidity $2,132 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. Pro Forma Adjusted Net Income and
Adjusted EBITDA Year to Date June 30, 2006 (in millions) Businesses
and Assets to be Sold U.S. U.S. Assets Business to be Sub to be
sold Philippines Caribbean Total Retained Total Net income (loss)
$(8) $(1) $15 $6 $560 $566 Pro forma adjustments(1) 12 10 11 33
(33) - Pro forma net income $4 $9 $26 $39 $527 $566 Mark-to-market
gains (4) - - (4) (402) (406) Loss (gain) on sales of assets, net -
2 - 2 (48) (46) Impairment losses on minority owned affiliates - 7
- 7 - 7 Bankruptcy charges and pre-petition dispute - - - - 17 17
Write-off of Philippines deferred tax asset - 72 - 72 - 72 Adjusted
net income $- $90 $26 $116 $94 $210 Provision for income taxes - 76
11 87 2 89 Interest, net 4 1 30 35 107 142 Depreciation and
amortization 21 39 25 85 69 154 Adjusted EBITDA $25 $206 $92 $323
$272 $595 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. (1) Pro-forma adjustments represent the
reclassification of corporate overhead expenses that will occur
when the assets and businesses to be sold are reclassified to
discontinued operations. Pro Forma Adjusted Net Income &
Adjusted EBITDA Year-end December 31, 2005 (in millions) Businesses
and Assets to be Sold U.S. Assets Business to be Sub to be sold
Philippines Caribbean Total Retained Total Net income (loss) $(99)
$98 $46 $45 $(1,352) $(1,307) Pro forma adjustments (1) 29 19 14 62
(62) 0 Pro forma net income (loss) $(70) $117 $60 $107 $(1,414)
$(1,307) Mark-to-market losses - - - - 17 17 Other impairment loss
and restructuring - 23 23 Loss (gain) on sales of assets, net - (1)
- (1) 8 7 Gain on sale of investments, net - - (45) (45) Impairment
losses on minority owned affiliates - 23 23 - 23 Other, net - 1 (6)
(5) 64 59 Reorganization items, net 90 - - 90 (18) 72 Income from
discontinued operations, net - - - - 20 20 Cumulative effect of a
change in accounting principle - - 16 16 Adjusted net income (loss)
$20 $140 $54 $214 $(1,329) $(1,115) Provision (benefit) for income
taxes - 131 6 137 (14) 123 Interest, net 12 21 52 85 1,395 1,480
Amortization of transition power agreements (5) - - (5) (9) (14)
Depreciation and amortization 50 79 43 172 135 307 Adjusted EBITDA
$77 $371 $155 $603 $178 $781 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. (1) Pro-forma
adjustments represent the reclassification of corporate overhead
expenses that will occur when the assets and businesses to be sold
are reclassified to discontinued operations. Pro Forma Adjusted
EBITDA Guidance to Cash Flow from Operations For the years ending
December 31, 2006 and 2007 (in millions) Year Ending Year Ending
December 31, 2006 December 31, 2007 Continuing Discon- Consol-
Continuing Discon- Consol- Business tinued idated Business tinued
idated Adjusted EBITDA $645 $637 $1,282 $924 $661 $1,585 Interest
payments, net (203) (98) (301) (221) (109) (330) Income tax paid 0
(237) (237) (10) (163) (173) Working capital changes 479 2 481 119
(37) 82 Adjusted cash flow from operations $921 $304 $1,225 $812
$352 $1,164 Cash payments under plan of reorganization (998) (998)
Cash flow from operations $(77) $304 $227 $812 $352 $1,164 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 electric utility
industry; changes in state, federal and other regulations
(including rate 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; Mirant's pursuit of potential business strategies,
including the acquisition of additional assets or the disposition
or alternative utilization of existing assets; changes in market
conditions, including developments in energy and commodity supply,
demand, volume and pricing or the extent and timing of the entry of
additional competition in the markets of Mirant's 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 optimization
activities as expected; our inability to enter into intermediate
and long-term contracts to sell power and procure fuel, including
its transportation, on terms and prices acceptable to us; 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; 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 June 30, 2006, filed with the Securities
and Exchange Commission; political 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 June 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, August 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: 678 579 777 DATASOURCE:
Mirant CONTACT: Media, Corry Leigh, +1-678-579-3111, or , or
Investor Relations, 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 all of Mirant Web site:
http://www.mirant.com/
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