ATLANTA, Aug. 6 /PRNewswire-FirstCall/ --
- Net loss of $263 million
compared to net income of $163
million for the second quarter of 2009
- Adjusted EBITDA of $149
million compared to adjusted EBITDA of $200 million for the second quarter of
2009
- Continue to expect to complete the merger with RRI Energy,
Inc. to create GenOn Energy, Inc. by the end of 2010
Mirant Corporation (NYSE: MIR) today reported a net loss for the
second quarter of 2010 of $263
million compared to net income of $163 million for the same period last year.
Results for 2010 include unrealized losses, principally on hedges,
of $340 million compared to
unrealized losses, again principally on hedges, of $14 million for 2009. Per share results for the
second quarter of 2010 were a net loss of $1.81 per share, compared to net income of
$1.12 per share for the second
quarter of 2009.
Net Income (Loss) to Adjusted
Net Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ending
|
|
Quarter Ending
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(in millions except per
share)
|
June 30, 2010
|
|
June 30, 2009
|
|
|
|
|
Per Share (1)
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Per Share (1)
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|
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Net Income (Loss)
|
$ (263)
|
|
$ (1.81)
|
|
$ 163
|
|
$ 1.12
|
|
Unrealized losses
|
340
|
|
2.34
|
|
14
|
|
0.10
|
|
Bankruptcy charges and legal
contingencies
|
-
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Postretirement benefit
curtailment gain
|
(37)
|
|
(0.25)
|
|
-
|
|
-
|
|
Other
|
6
|
|
0.04
|
|
16
|
|
0.11
|
|
Adjusted Net
Income
|
$ 46
|
|
$ 0.32
|
|
$ 131
|
|
$ 0.90
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
1
|
|
|
|
-
|
|
|
|
Interest expense, net
|
49
|
|
|
|
33
|
|
|
|
Depreciation and
amortization
|
53
|
|
|
|
36
|
|
|
|
Adjusted EBITDA
|
$ 149
|
|
|
|
$ 200
|
|
|
|
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|
|
|
|
|
|
(1) Per share amounts for 2010
are based on basic weighted average shares outstanding of 145
million, for all amounts except adjusted net income which is based
on diluted weighted average shares outstanding of 146 million. Per
share amounts for 2009 are based on diluted weighted average shares
outstanding of 145 million.
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Mirant reported adjusted net income of $46 million for the second quarter of 2010, or
$0.32 per diluted share, compared to
adjusted net income of $131 million
for the second quarter of 2009, or $0.90 per diluted share. Adjusted net income
excludes unrealized losses, the MC Asset Recovery settlement with
Southern Company in 2009 and other items. The quarter over quarter
change resulted principally from lower realized gross margins,
higher depreciation and amortization costs, and higher net interest
expense.
Adjusted EBITDA for the second quarter of 2010 was $149 million, compared to adjusted EBITDA of
$200 million for the second quarter
of 2009. The change in adjusted EBITDA resulted principally from
lower realized value of hedges and lower energy gross margins from
fuel oil management activities, partially offset by higher energy
gross margins from Mid-Atlantic generation.
Net cash used in operating activities of continuing operations
for the second quarter of 2010 was $152
million compared to net cash provided by continuing
operations of $113 million for the
same period in 2009, primarily as a result of working capital
changes and lower realized gross margins.
Six Months 2010 versus Six Months 2009
Mirant reported net income of $144
million for the first six months of 2010, compared to net
income of $543 million for the same
period in 2009. Results for 2010 include unrealized gains,
principally on hedges, of $12 million
compared to unrealized gains, again principally on hedges, of
$240 million for 2009. Per
share results for the first six months of 2010 were $0.99 per share, compared to $3.74 per share for the same period in 2009.
Net Income to Adjusted Net
Income and Adjusted EBITDA
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Year to Date
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Year to Date
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(in millions except per
share)
|
June 30, 2010
|
|
June 30, 2009
|
|
|
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Per Share (1)
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Per Share (1)
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Net Income
|
$ 144
|
|
$ 0.99
|
|
$ 543
|
|
$ 3.74
|
|
Unrealized gains
|
(12)
|
|
(0.08)
|
|
(240)
|
|
(1.65)
|
|
Bankruptcy charges and legal
contingencies
|
1
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Postretirement benefit
curtailment gain
|
(37)
|
|
(0.25)
|
|
-
|
|
-
|
|
Other
|
11
|
|
0.07
|
|
5
|
|
0.04
|
|
Adjusted Net
Income
|
$ 107
|
|
$ 0.73
|
|
$ 246
|
|
$ 1.70
|
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Provision for income
taxes
|
1
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|
|
|
8
|
|
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Interest expense, net
|
99
|
|
|
|
69
|
|
|
|
Depreciation and
amortization
|
104
|
|
|
|
72
|
|
|
|
Adjusted EBITDA
|
$ 311
|
|
|
|
$ 395
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(1) Per share amounts for 2010
are based on diluted weighted average shares outstanding of 146
million. Per share amounts for 2009 are based on diluted weighted
average shares outstanding of 145 million.
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Mirant reported adjusted net income of $107 million for the first six months of 2010, or
$0.73 per diluted share, compared to
adjusted net income of $246 million
for the same period in 2009, or $1.70
per diluted share. Adjusted net income excludes unrealized gains,
the MC Asset Recovery settlement with Southern Company in 2009 and
other items. The period over period change resulted principally
from lower realized gross margins, higher depreciation and
amortization costs, and higher net interest expense.
Adjusted EBITDA for the first six months of 2010 was
$311 million, compared to adjusted
EBITDA of $395 million for the same
period in 2009. The period over period decrease resulted
principally from lower realized value of hedges, lower energy gross
margins from Northeast generation, lower net gains from sales of
emissions allowances, and lower energy gross margins from fuel oil
management activities, partially offset by higher energy gross
margins from Mid-Atlantic generation.
Net cash provided by operating activities of continuing
operations during the first six months of 2010 was $150 million compared to net cash provided by
operating activities of continuing operations of $384 million in the same period of 2009,
primarily as a result of lower realized gross margins and working
capital changes.
As of June 30, 2010, the company
had cash and cash equivalents of $1.849
billion, of which $431 million
was restricted at Mirant North America and its subsidiaries and not
available for distribution to Mirant. The company expects
Mirant North America will distribute approximately $110 million to its parent, Mirant Americas
Generation, in August 2010. Although
the company expects Mirant North America to remain in compliance
with its financial covenants, it is likely it will be restricted in
future periods by the free cash flow requirements under the
restricted payment test of its senior credit facility from making
distributions beyond permitted interest payable by its parent. The
primary factor lowering the free cash flow calculation is the
significant capital expenditure program to comply with the Maryland
Healthy Air Act. When the capital expenditures no longer affect the
free cash flow calculation, Mirant North America is expected to be
able again to make distributions. Mirant does not expect the
restriction on distributions to have any effect on its
operations.
As of June 30, 2010, the company
had total outstanding debt of $2.562
billion.
Merger with RRI Energy
Mirant and RRI Energy continue to expect to complete their
merger by the end of 2010.
Earnings Call
Mirant is hosting an earnings call today to discuss its second
quarter 2010 financial results. The call will be held from
9-10 a.m. EDT. The conference call
can be accessed via the investor relations section of the company's
website at www.mirant.com or analysts are invited to listen to the
call by dialing 888 637 7748 (International 913 312 0717) and
entering pass code 1242212. Presentation slides for the earnings
call have been posted to the company's website.
A recording of the event will be available for playback on the
company's website beginning today at noon
EDT. A replay also will be available by dialing 888 203 1112
(International 719 457 0820) and entering the pass code
1242212.
Non-GAAP Financial Measures
This press release and the presentation slides for the earnings
call contain non-GAAP financial measures as defined by SEC rules.
Management thinks that these measures are helpful to investors in
measuring Mirant's financial performance and liquidity and
comparing Mirant's performance to its peers. However, Mirant's
non-GAAP financial measures may not be comparable to similarly
titled non-GAAP financial measures used by other companies. These
non-GAAP financial measures have limitations as an analytical tool
and should not be considered in isolation or as a substitute for
GAAP financial measures. To the extent management discusses any
non-GAAP financial measures on the earnings call, a reconciliation
of each measure to the most directly comparable GAAP measure will
be available in the presentation slides available via the investor
relations section of our website at www.mirant.com. In addition,
Mirant has included a more detailed description of each of these
non-GAAP financial measures, together with a discussion of the
usefulness and purpose of these measures as Exhibit 99.2 to
Mirant's Current Report on Form 8-K furnished to the SEC concurrent
with the issuance of this press release.
Mirant is a competitive energy company that produces and
sells electricity in the United
States. Mirant owns or leases more than 10,000 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 www.mirant.com.
Regulation G Reconciliations
Net Income (Loss) to Adjusted
Net Income and Adjusted EBITDA
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|
|
|
|
|
|
Quarter Ending
|
|
Quarter Ending
|
|
(in millions except per
share)
|
June 30, 2010
|
|
June 30, 2009
|
|
|
|
|
Per Share (1)
|
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|
|
Per Share (1)
|
|
|
|
|
|
|
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|
|
Net Income (Loss)
|
$ (263)
|
|
$ (1.81)
|
|
$ 163
|
|
$ 1.12
|
|
Unrealized losses
|
340
|
|
2.34
|
|
14
|
|
0.10
|
|
Bankruptcy charges and legal
contingencies
|
-
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Severance and bonus plan for
dispositions
|
-
|
|
-
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|
13
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|
0.09
|
|
Postretirement benefit
curtailment gain
|
(37)
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|
(0.25)
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-
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-
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Other
|
6
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|
0.04
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|
3
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0.02
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Adjusted Net
Income
|
$ 46
|
|
$ 0.32
|
|
$ 131
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$ 0.90
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Provision for income
taxes
|
1
|
|
|
|
-
|
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|
|
Interest expense, net
|
49
|
|
|
|
33
|
|
|
|
Depreciation and
amortization
|
53
|
|
|
|
36
|
|
|
|
Adjusted EBITDA
|
$ 149
|
|
|
|
$ 200
|
|
|
|
|
|
|
|
|
|
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|
|
(1) Per share amounts for 2010
are based on basic weighted average shares outstanding of 145
million, for all amounts except adjusted net income which is based
on diluted weighted average shares outstanding of 146 million. Per
share amounts for 2009 are based on diluted weighted average shares
outstanding of 145 million.
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Net Income to Adjusted Net
Income and Adjusted EBITDA
|
|
|
|
|
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|
|
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Year to Date
|
|
Year to Date
|
|
(in millions except per
share)
|
June 30, 2010
|
|
June 30, 2009
|
|
|
|
|
Per Share (1)
|
|
|
|
Per Share (1)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$ 144
|
|
$ 0.99
|
|
$ 543
|
|
$ 3.74
|
|
Unrealized gains
|
(12)
|
|
(0.08)
|
|
(240)
|
|
(1.65)
|
|
Bankruptcy charges and legal
contingencies
|
1
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Severance and bonus plan for
dispositions
|
-
|
|
-
|
|
13
|
|
0.09
|
|
Lower of cost or market
inventory adjustments, net
|
6
|
|
0.04
|
|
(11)
|
|
(0.07)
|
|
Postretirement benefit
curtailment gain
|
(37)
|
|
(0.25)
|
|
-
|
|
-
|
|
Other
|
5
|
|
0.03
|
|
3
|
|
0.02
|
|
Adjusted Net
Income
|
$ 107
|
|
$ 0.73
|
|
$ 246
|
|
$ 1.70
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
1
|
|
|
|
8
|
|
|
|
Interest expense, net
|
99
|
|
|
|
69
|
|
|
|
Depreciation and
amortization
|
104
|
|
|
|
72
|
|
|
|
Adjusted EBITDA
|
$ 311
|
|
|
|
$ 395
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Per share amounts for 2010
are based on diluted weighted average shares outstanding of 146
million. Per share amounts for 2009 are based on diluted weighted
average shares outstanding of 145 million.
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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; environmental
regulations that restrict Mirant's ability or render it uneconomic
to operate its business, including regulations related to the
emission of CO2 and other greenhouse gases; increased regulation
that limits Mirant's access to adequate water supplies and landfill
options needed to support power generation or that increases the
costs of cooling water and handling, transporting and disposing
off-site of ash and other byproducts; changes in market conditions,
including developments in the supply, demand, volume and pricing of
electricity and other commodities in the energy markets, including
efforts to reduce demand for electricity and to encourage the
development of renewable sources of electricity, and the extent and
timing of the entry of additional competition in our markets;
continued poor economic and financial market conditions, including
impacts on financial institutions and other current and potential
counterparties and negative impacts on liquidity in the power and
fuel markets in which Mirant and its subsidiaries hedge and
transact; increased credit standards, margin requirements, market
volatility or other market conditions that could increase Mirant's
obligations to post collateral beyond amounts that are expected,
including additional collateral costs associated with
over-the-counter hedging activities as a result of new or proposed
rules and regulations governing derivative financial instruments;
Mirant's inability to access effectively the over-the-counter and
exchange-based commodity markets or changes in commodity market
conditions and liquidity, including as a result of new or proposed
rules and regulations governing derivative financial instruments,
which may affect Mirant's ability to engage in asset management,
proprietary trading and fuel oil management activities as expected,
or result in material gains or losses from open positions;
deterioration in the financial condition of Mirant's counterparties
and the failure of such parties to pay amounts owed to Mirant or to
perform obligations or services 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 resulting from such hazards or the inability of Mirant's
insurers to provide agreed upon coverage; the expected timing and
likelihood of completion of the proposed merger with RRI Energy,
including the timing, receipt and terms and conditions of required
stockholder, governmental and regulatory approvals that may reduce
anticipated benefits or cause the parties to abandon the merger;
the ability of the parties to arrange debt financing in an amount
sufficient to fund the refinancing contemplated in, and on terms
consistent with, the Merger Agreement; the diversion of
management's time and attention from our ongoing business during
the time we are seeking to complete the merger; the ability to
maintain relationships with employees, customers and suppliers; the
ability to integrate successfully the businesses and realize cost
savings and any other synergies; and the risk that credit ratings
of the combined company or its subsidiaries may be different from
what the companies expect; price mitigation strategies employed by
ISOs or RTOs that reduce Mirant's revenue and may result in a
failure to compensate Mirant's generating units adequately for all
of their costs; changes in the rules used to calculate capacity,
energy and ancillary services payments; legal and political
challenges to the rules used to calculate capacity, energy and
ancillary services payments; volatility in Mirant's gross margin as
a result of Mirant's accounting for derivative financial
instruments used in its asset management, proprietary trading and
fuel oil management activities and volatility in its cash flow from
operations resulting from working capital requirements, including
collateral, to support its asset management, proprietary trading
and fuel oil management activities; Mirant's ability to enter into
intermediate and long-term contracts to sell power or to hedge our
future expected generation of power, and to obtain adequate supply
and delivery of fuel for its generating facilities, at Mirant's
required specifications and on terms and prices acceptable to it;
the failure to utilize new or advancements in power generation
technologies; the inability of Mirant's operating subsidiaries to
generate sufficient cash flow to support its operations; the
potential limitation or loss of Mirant's net operating losses
notwithstanding a continuation of its stockholder rights plan;
Mirant's ability to borrow additional funds and access capital
markets; strikes, union activity or labor unrest; Mirant's ability
to obtain or develop capable leaders and its ability to retain or
replace the services of key employees; weather and other natural
phenomena, including hurricanes and earthquakes; the cost and
availability of emissions allowances; curtailment of operations and
reduced prices for electricity resulting from transmission
constraints; Mirant's ability to execute its business plan in
California, including entering
into new tolling arrangements in respect of its existing generating
facilities; Mirant's ability to execute its development plan in
respect of its Marsh Landing generating facility, including
obtaining the permits necessary for construction and operation of
the generating facility, securing the necessary project financing
for construction of the generating facility, and completing the
construction of the generating facility by May 2013; Mirant's relative lack of geographic
diversification of revenue sources resulting in concentrated
exposure to the Mirant Mid-Atlantic market; the ability of lenders
under Mirant North America's revolving credit facility to perform
their obligations; war, terrorist activities, cyberterrorism and
inadequate cybersecurity, or the occurrence of a catastrophic loss;
the failure to provide a safe working environment for Mirant's
employees and visitors thereby increasing Mirant's exposure to
additional liability, loss of productive time, other costs, and a
damaged reputation; Mirant's 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 flows of those
subsidiaries to make debt service and other payments; the failure
to comply with, or monitor provisions of Mirant's loan agreements
and debt may lead to a breach and, if not remedied, result in an
event of default thereunder, which would limit access to needed
capital and damage Mirant's reputation and relationships with
financial institutions; and the disposition of the pending
litigation described in Mirant's Form 10-Q for the quarter ended
June 30, 2010, 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 www.sec.gov.
Additional Information and Where To Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. In connection with the
proposed merger between RRI Energy and Mirant, on May 28, 2010, RRI Energy filed with the SEC a
Registration Statement on Form S-4 that includes a preliminary
joint proxy statement of RRI Energy and Mirant and that also
constitutes a preliminary prospectus of RRI Energy. On July 6, 2010, RRI Energy amended these materials.
These materials are not yet final and will be further amended. RRI
Energy and Mirant will distribute the final joint proxy
statement/prospectus to their respective shareholders. RRI Energy
and Mirant urge investors and shareholders to read the registration
statement, and any other relevant documents filed with the SEC,
including the preliminary joint proxy statement/prospectus that is
a part of the registration statement, and the definitive joint
proxy statement/prospectus, when available, because they contain or
will contain important information. You may obtain copies of all
documents filed with the SEC regarding this transaction, free of
charge, at the SEC's website (www.sec.gov). You may also obtain
these documents, free of charge, from RRI Energy's website
(www.rrienergy.com) under the tab "Investor Relations" and then
under the heading "Company Filings." You may also obtain these
documents, free of charge, from Mirant's website (www.mirant.com)
under the tab "Investor Relations" and then under the heading "SEC
Filings."
Participants in The Merger Solicitation
RRI Energy, Mirant, and their respective directors, executive
officers and certain other members of management and employees may
be soliciting proxies from RRI Energy and Mirant shareholders in
favor of the merger and related matters. Information regarding the
persons who may, under the rules of the SEC, be deemed participants
in the solicitation of RRI Energy and Mirant shareholders in
connection with the proposed merger is contained in the preliminary
joint proxy statement/prospectus and will be contained in the
definitive joint proxy statement/prospectus when it becomes
available. You can find information about RRI Energy's executive
officers and directors in its definitive proxy statement filed with
the SEC on April 1, 2010. You can find information about
Mirant's executive officers and directors in its definitive proxy
statement filed with the SEC on March 26, 2010 and
supplemented on April 28, 2010.
Additional information about RRI Energy's executive officers and
directors and Mirant's executive officers and directors can be
found in the above-referenced Registration Statement on Form S-4.
You can obtain free copies of these documents from RRI Energy and
Mirant as described above.
Stockholder inquiries:
678 579 7777
SOURCE Mirant Corporation
Copyright g. 6 PR Newswire