ATLANTA, Nov. 5, 2010 /PRNewswire-FirstCall/ --
- Net income of $254 million
compared to net income of $55 million
for the third quarter of 2009
- Adjusted EBITDA of $190
million compared to adjusted EBITDA of $311 million for the third quarter of
2009
- Continue to expect to complete the merger with RRI Energy,
Inc. ("RRI Energy") to create GenOn Energy, Inc. by the end of the
year
Mirant Corporation (NYSE: MIR) today reported net income for the
third quarter of 2010 of $254 million
compared to net income of $55 million
for the same period last year. Results for 2010 include unrealized
gains, principally on hedges, of $167
million compared to unrealized losses, again principally on
hedges, of $174 million for 2009. Per
share results for the third quarter of 2010 were $1.74 per diluted share, compared to $0.38 per diluted share for the third quarter of
2009.
Net Income
to Adjusted Net Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ending
|
|
Quarter
Ending
|
|
(in millions except per
share)
|
September
30, 2010
|
|
September
30, 2009
|
|
|
|
|
Per Share
(1)
|
|
|
|
Per Share
(1)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
254
|
|
$
1.74
|
|
$
55
|
|
$
0.38
|
|
Unrealized losses
(gains)
|
(167)
|
|
(1.14)
|
|
174
|
|
1.19
|
|
Other
|
(1)
|
|
(0.01)
|
|
9
|
|
0.06
|
|
Adjusted Net
Income
|
$
86
|
|
$
0.59
|
|
$
238
|
|
$
1.63
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
-
|
|
|
|
3
|
|
|
|
Interest expense, net
|
51
|
|
|
|
33
|
|
|
|
Depreciation and
amortization
|
53
|
|
|
|
37
|
|
|
|
Adjusted EBITDA
|
$
190
|
|
|
|
$
311
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Per share amounts for 2010
and 2009 are based on diluted weighted average shares
outstanding of 146 million.
|
|
|
|
|
|
|
|
|
|
Mirant reported adjusted net income of $86 million for the third quarter of 2010, or
$0.59 per diluted share, compared to
adjusted net income of $238 million
for the third quarter of 2009, or $1.63 per diluted share. Adjusted net income
excludes unrealized gains and losses and other items. The quarter
over quarter change resulted principally from lower adjusted
EBITDA, higher net interest expense, and higher depreciation and
amortization costs.
Adjusted EBITDA for the third quarter of 2010 was $190 million, compared to adjusted EBITDA of
$311 million for the third quarter of
2009. The change in adjusted EBITDA resulted principally from lower
realized value of hedges, lower energy gross margins from
proprietary trading activities, lower contracted and capacity
revenues, and higher operating costs primarily because of scrubbers
installed in December 2009 and the
Montgomery County, Maryland CO2
levy imposed on our Dickerson
generating facility beginning in May
2010, partially offset by higher energy gross margins from
generation.
Net cash provided by operating activities of continuing
operations for the third quarter of 2010 was $193 million compared to net cash provided by
continuing operations of $342 million
for the same period in 2009, primarily as a result of lower
realized gross margins and working capital changes.
Nine Months 2010 versus Nine Months 2009
Mirant reported net income of $398
million for the first nine months of 2010, compared to net
income of $598 million for the same
period in 2009. Results for 2010 include unrealized gains,
principally on hedges, of $179
million compared to unrealized gains, again principally on
hedges, of $66 million for 2009.
Per share results for the first nine months of 2010 were
$2.73 per diluted share, compared to
$4.12 per diluted share for the same
period in 2009.
Net Income
to Adjusted Net Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Year to
Date
|
|
Year to
Date
|
|
(in millions except per
share)
|
September
30, 2010
|
|
September
30, 2009
|
|
|
|
|
Per Share
(1)
|
|
|
|
Per Share
(1)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
398
|
|
$
2.73
|
|
$
598
|
|
$
4.12
|
|
Unrealized gains
|
(179)
|
|
(1.23)
|
|
(66)
|
|
(0.45)
|
|
Bankruptcy charges and legal
contingencies
|
-
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Postretirement benefit
curtailment gain
|
(37)
|
|
(0.25)
|
|
-
|
|
-
|
|
Other
|
11
|
|
0.07
|
|
14
|
|
0.10
|
|
Adjusted Net
Income
|
$
193
|
|
$
1.32
|
|
$
484
|
|
$
3.34
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
1
|
|
|
|
11
|
|
|
|
Interest expense, net
|
150
|
|
|
|
102
|
|
|
|
Depreciation and
amortization
|
157
|
|
|
|
109
|
|
|
|
Adjusted EBITDA
|
$
501
|
|
|
|
$
706
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
Mirant reported adjusted net income of $193 million for the first nine months of 2010,
or $1.32 per diluted share, compared
to adjusted net income of $484
million for the same period in 2009, or $3.34 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 adjusted EBITDA, higher net
interest expense, and higher depreciation and amortization
costs.
Adjusted EBITDA for the first nine months of 2010 was
$501 million, compared to adjusted
EBITDA of $706 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 proprietary trading activities, higher operating costs
primarily because of scrubbers installed in December 2009, and lower net gains from sales of
emissions allowances, partially offset by higher energy gross
margins from Mid-Atlantic generation.
Net cash provided by operating activities of continuing
operations during the first nine months of 2010 was $343 million compared to net cash provided by
operating activities of continuing operations of $726 million in the same period of 2009,
primarily as a result of lower realized gross margins and working
capital changes.
As of September 30, 2010, the
company had cash and cash equivalents of $1.989 billion, of which $518 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 $112 million
to its parent, Mirant Americas Generation, in November 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. Further, the
Mirant North America senior credit facility that includes the
restricted payments test will be repaid and terminated, together
with the other indebtedness of Mirant North America, in connection
with the merger with RRI Energy.
As of September 30, 2010, the
company had total outstanding debt of $2.561
billion.
Merger with RRI Energy
As previously announced, on October 25,
2010, the stockholders of Mirant and RRI Energy approved the
proposals related to their proposed merger to form GenOn Energy,
Inc. While the merger remains subject to customary closing
conditions, including the completion of review and clearance by the
U.S. Department of Justice under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, Mirant continues to expect to
complete the merger by the end of the year.
Earnings Call
Mirant is hosting an earnings call today to discuss its third
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 800 289 0463 (International 913 312 0688) and
entering pass code 9947498. 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
9947498.
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
to Adjusted Net Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ending
|
|
Quarter
Ending
|
|
(in millions except per
share)
|
September
30, 2010
|
|
September
30, 2009
|
|
|
|
|
Per Share
(1)
|
|
|
|
Per Share
(1)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
254
|
|
$
1.74
|
|
$
55
|
|
$
0.38
|
|
Unrealized losses
(gains)
|
(167)
|
|
(1.14)
|
|
174
|
|
1.19
|
|
Impairment losses
|
-
|
|
-
|
|
14
|
|
0.10
|
|
Lower of cost or market
inventory adjustments, net
|
(7)
|
|
(0.05)
|
|
(6)
|
|
(0.04)
|
|
Merger-related costs
|
8
|
|
0.06
|
|
-
|
|
-
|
|
Other
|
(2)
|
|
(0.02)
|
|
1
|
|
-
|
|
Adjusted Net
Income
|
$
86
|
|
$
0.59
|
|
$
238
|
|
$
1.63
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
-
|
|
|
|
3
|
|
|
|
Interest expense, net
|
51
|
|
|
|
33
|
|
|
|
Depreciation and
amortization
|
53
|
|
|
|
37
|
|
|
|
Adjusted EBITDA
|
$
190
|
|
|
|
$
311
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Per share amounts for 2010
and 2009 are based on diluted weighted average shares outstanding
of 146 million.
|
|
|
|
|
|
|
|
|
|
Net Income
to Adjusted Net Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Year to
Date
|
|
Year to
Date
|
|
(in millions except per
share)
|
September
30, 2010
|
|
September
30, 2009
|
|
|
|
|
Per Share
(1)
|
|
|
|
Per Share
(1)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
398
|
|
$
2.73
|
|
$
598
|
|
$
4.12
|
|
Unrealized gains
|
(179)
|
|
(1.23)
|
|
(66)
|
|
(0.45)
|
|
Bankruptcy charges and legal
contingencies
|
-
|
|
-
|
|
(62)
|
|
(0.43)
|
|
Severance and bonus plan for
dispositions
|
-
|
|
-
|
|
13
|
|
0.09
|
|
Impairment losses
|
-
|
|
-
|
|
14
|
|
0.10
|
|
Lower of cost or market
inventory adjustments, net
|
(1)
|
|
(0.01)
|
|
(17)
|
|
(0.12)
|
|
Postretirement benefit
curtailment gain
|
(37)
|
|
(0.25)
|
|
-
|
|
-
|
|
Merger-related costs
|
13
|
|
0.09
|
|
-
|
|
-
|
|
Other
|
(1)
|
|
(0.01)
|
|
4
|
|
0.03
|
|
Adjusted Net
Income
|
$
193
|
|
$
1.32
|
|
$
484
|
|
$
3.34
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
1
|
|
|
|
11
|
|
|
|
Interest expense, net
|
150
|
|
|
|
102
|
|
|
|
Depreciation and
amortization
|
157
|
|
|
|
109
|
|
|
|
Adjusted EBITDA
|
$
501
|
|
|
|
$
706
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
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 plants, 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,
including those resulting from the Dodd-Frank Wall Street Reform
and Consumer Protection Act; 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, including those
resulting from the Dodd-Frank Wall Street Reform and Consumer
Protection Act, 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, governmental and regulatory approvals that
may reduce anticipated benefits or cause the parties to abandon the
merger; 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 and completing the construction of the
generating facility by mid-2013; the ability of Mirant Marsh
Landing to meet the conditions to draw under the Marsh Landing
credit agreement; the ability of lenders under the Marsh Landing
credit facility to fund the Marsh Landing credit agreement;
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
September 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
In connection with the proposed merger between RRI Energy and
Mirant, RRI Energy filed with the SEC a registration statement on
Form S-4 that includes a joint proxy statement of RRI Energy and
Mirant and that also constitutes a prospectus of RRI Energy. The
registration statement was declared effective by the SEC on
September 13, 2010. RRI Energy and
Mirant urge investors and shareholders to read the registration
statement, and any other relevant documents filed with the SEC,
including the joint proxy statement/prospectus that is a part of
the registration statement, because they 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"
and from Mirant's website (www.mirant.com) under the tab "Investor
Relations" and then under the heading "SEC Filings."
Stockholder
inquiries:
|
|
678 579
7777
|
|
|
SOURCE Mirant Corporation