EXHIBIT 99.1
NEWS RELEASE
MEDIA CONTACT:
James Peters, 678 579 5266
David Payne, 678 579 6065
(MIRANT LOGO)
INVESTOR CONTACT:
John Robinson, 678 579 7782
Carey Skinner, 678 579 3602
April 30, 2003
MIRANT REPORTS 2002 RESULTS, COMPLETES REAUDITS
ATLANTA - Mirant (NYSE: MIR) today announced that it has completed the
annual audit of the company's 2002 financials, and the reaudits of its 2001 and
2000 financials. The company and its two registered subsidiaries, Mirant
Mid-Atlantic LLC and Mirant Americas Generation LLC, have filed certified Forms
10-K with the Securities and Exchange Commission.
Mirant reported a $2.4 billion net loss for 2002, or a loss of $6.06
per share. This compares to $409 million in restated net income for 2001, or
$1.19 per diluted share.
"With the completion of the 2002 audit and reaudits of 2001 and 2000,
we end a period that has been very frustrating for our stakeholders, employees
and management. This is a critical step in restoring confidence in Mirant," said
Marce Fuller, president and chief executive officer. "Importantly, I am
reaffirming that we have found no fraud associated with our prior financial
statements. Now, we can turn our full attention to completing a successful
refinancing of major debt maturities and returning Mirant to profitability and
growth. I am optimistic that the aggressive actions we have taken over the last
eighteen months position us to achieve these objectives."
Mirant has stated that it is in discussions with its lenders regarding
the refinancing of a substantial portion of the company's debt. In connection
with these discussions, the company recently confirmed that it has received
temporary waivers from its banks. Because of the uncertainty associated with its
refinancing efforts, the company's independent auditors' report includes a
"going concern" explanatory paragraph. Mirant anticipates that this paragraph
should be removed if it successfully completes its proposed refinancing.
Mirant's previously reported earnings for 2001 and 2000 decreased by a
total of $188 million.The decrease is attributable in part to adjustments
associated with previously disclosed items, such as its gas inventory error. The
company cites a combination of complex accounting interpretations and accounting
errors for the adjustments that resulted in the restatements. Mirant notes that
many of the adjustments booked in the reaudit period related to timing
differences primarily associated with the company's asset hedging and risk
management activities.
Mirant Reports 2002 Results, Completes Reaudits Page 2
2002 RESULTS
- Total operating revenues for 2002 were $6.4 billion compared to
$8.5 billion for 2001.
- NOTE: These revenue levels reflect Mirant's adoption of the
provisions of the Financial Accounting Standards Board's
Emerging Issues Task Force Issue 02-03 with respect to
netting revenues and expenses on energy marketing contracts.
- Net cash provided by operating activities for 2002 was $580
million, compared to $140 million for 2001.
- 2002 net income was $77 million for Mirant Americas Generation
LLC, and $185 million for Mirant Mid-Atlantic LLC, both
registered subsidiaries of Mirant.
"Despite a very challenging year, Mirant accomplished key objectives,"
said Fuller. "We significantly restructured our operations, exited several
markets around the world, sold assets, closed offices and terminated power plant
developments. We took steps that will reduce annual operating expenses by more
than $275 million, slashed capital expenditures and scaled back our energy
marketing activities to focus on managing the risks around our assets."
These combined actions resulted in large restructuring charges,
substantial non-cash write downs, and a valuation allowance against the
company's net deferred tax asset balance. The charges were partially offset by
gains on sales of assets and investments of $370 million. The charges include:
- RESTRUCTURING CHARGE AND NON-CASH IMPAIRMENT LOSS OF $1.4 BILLION
- Restructuring charges and impairment losses of $973 million
represent costs to cancel equipment orders and service
agreements, employee severance costs, and write-off of
investments in cancelled and suspended projects. Such
restructuring charges are estimated to reduce cash expenditures
by approximately $1.9 billion between 2003 and 2005, and to
reduce payroll costs by $78 million annually.
- Impairment losses of $467 million represent the write-down of
investments in minority-owned, foreign affiliates sold during the
year.
- NON-CASH PROVISION FOR INCOME TAX ON ACCUMULATED FOREIGN EARNINGS OF
$468 MILLION
- Recognition of additional deferred tax expense resulting from the
company's strategic withdrawal from non-core international
operations.
- The provision allows Mirant to repatriate earnings from its
overseas investments without having to book additional U.S.
income tax, and should provide future book income benefits.
Mirant Reports 2002 Results, Completes Reaudits Page 3
- NON-CASH ASIA GOODWILL IMPAIRMENT OF $697 MILLION
- Impairment of goodwill on Asia investments is attributable to selling
various Asia assets, notably the company's minority interest in the
Shajiao C power plant. The impairment loss is a non-cash item that has
no effect on future cash flows from Asia, which are primarily based on
long-term contracts at generating plants in the Philippines.
- NON-CASH DEFERRED INCOME TAX VALUATION ALLOWANCE OF $1.1 BILLION
- Reduction in deferred tax assets due to the cumulative effect of
other write-offs, primarily those described above.
- Mirant expects to utilize these amounts beginning in 2005 to
offset federal taxable income. The reversal of the deferred tax
valuation allowance will benefit future-year earnings to the
extent Mirant is profitable.
2001, 2000 REAUDIT RESULTS
"The reaudits of our 2001 and 2000 financials took a significant
amount of time. The challenge was made more difficult because of numerous,
complex transactions during the period, including acquisitions, divestitures and
exiting foreign markets," said Harvey A. Wagner, Mirant's recently-appointed
chief financial officer.
- Restated net income for 2001 and 2000 decreased by $159 million to
$409 million, and decreased by $29 million to $330 million
respectively. This compares to previously reported net income of
$568 million and $359 million in 2001 and 2000 respectively.
- The restated net income for Mirant's subsidiary, Mirant Americas
Generation LLC, increased $72 million to $419 million in 2001, and
decreased $5 million to $153 million in 2000. This compares to
previously reported net income of $347 million and $158 million
for 2001 and 2000 respectively.
- Mirant Mid-Atlantic LLC restated 2001 by decreasing net income $8
million from $176 million to $168 million.
- Mirant reclassified $217 million of cash flow in 2001 from
operating to financing cash flow. This relates to a previously
disclosed natural gas prepay transaction. Overall cash flow was
unchanged.
- Mirant is preparing revised quarterly financial statements for
2002 and 2001 on a basis consistent with its 2002 Form 10-K. The
company expects to provide the prior years' quarterly results, and
file results for the first quarter 2003, as soon as possible.
UPCOMING ANALYST CALL
- Mirant will announce plans to host an analyst call within the next
several days. The company will issue a news release shortly to
provide details for this call.
Mirant Reports 2002 Results, Completes Reaudits Page 4
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- The 2003 Annual Meeting of Stockholders of Mirant Corp. will be
held on Thursday, May 22 at 9:00 a.m. at the Atlanta Marriott
Alpharetta, 5750 Windward Parkway, Alpharetta, GA. Ms. Fuller will
discuss earnings results for 2002 and provide a general business
outlook.
- The meeting will be webcast from a link at www.mirant.com.
Participants can also choose to dial 1-800-288-8968. Both methods
are listen-only. The meeting will be available for replay until
June 5 at www.mirant.com.
# # #
Special Note Regarding Forward-Looking Statements
The information presented in this release includes forward-looking
statements in addition to historical information. These statements involve known
and unknown risks and relate to future events, our future financial performance
or our projected business results. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"targets," "potential" or "continue" or the negative of these terms or other
comparable terminology.
Forward-looking statements are only predictions. Actual events or
results may differ materially from any forward-looking statement as a result of
various factors, which include: (1) legislative and regulatory initiatives
regarding deregulation, regulation or restructuring of the electric utility
industry; (2) the failure of our assets to perform as expected or the extent and
timing of the entry of additional competition in the markets of our subsidiaries
and affiliates; (3) our pursuit of potential business strategies, including the
disposition of assets, termination of construction of certain projects or
internal restructuring; (4) changes in state, federal and other regulations
(including rate and other regulations); (5) changes in or application of
environmental and other laws and regulations to which we and our subsidiaries
and affiliates are subject; (6) political, legal and economic conditions and
developments; (7) changes in market conditions, including developments in energy
and commodity supply, demand, volume and pricing; (8) weather and other natural
phenomena; (9) war or the occurrence of a catastrophic loss; (10) deterioration
in the financial condition of our counterparties and the resulting failure to
pay amounts owed to us or perform obligations or services due to us; (11)
financial market conditions and the results of Mirant's financial restructuring
efforts, including its inability to obtain long-term or working capital on terms
that are not prohibitive and the effects that would result on our liquidity and
business; (12) the direct or indirect effects on our business of a lowering of
our credit rating or that of Mirant Americas Generation or Mirant Americas
Energy Marketing (or actions taken by us or our affiliates in response to
changing credit ratings criteria), including, increased collateral requirements
to execute our business plan, demands for increased collateral by our current
counterparties, curtailment of certain business operations in order to reduce
the amount of required collateral, refusal by our current or potential
counterparties or customers to enter into
Mirant Reports 2002 Results, Completes Reaudits Page 5
transactions with us and our inability to obtain credit or capital in amounts
needed or on terms favorable to us; (13) the disposition of the pending
litigation described in our Form 10-K; (14) the direct or indirect effects of
the "going concern" explanatory paragraph contained in our, or our subsidiaries'
independent auditors' reports; and (15) other factors, including the risks
discussed in our Form 10-K.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, and
levels of activity, performance or achievements. We expressly disclaim a duty to
update any of the forward-looking statements.
MIRANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended
2002 2001
---------- ----------
(Restated)
OPERATING REVENUES:
GENERATION $ 5,578 $ 7,484
NET TRADING 339 563
INTEGRATED UTILITIES AND DISTRIBUTION 485 475
OTHER 34 2
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6,436 8,524
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OTHER OPERATING EXPENSES:
Cost of fuel, electricity and other products 4,214 5,560
Selling, general and administrative 581 877
Maintenance 152 183
Depreciation and amortization 288 372
Impairment loss and restructuring charge 973 82
Goodwill impairment 697 --
Gain on sales of assets, net (41) (2)
Other 480 426
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Total other operating expenses 7,344 7,498
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OPERATING INCOME/(LOSS) (908) 1,026
OTHER INCOME (EXPENSE):
Interest income 38 118
Interest expense (495) (614)
Gain on sales of investments, net 329 --
Equity in income of affiliates 168 217
Impairment loss on minority owned affiliates (467) (3)
Receivables recovery 29 10
Other, net (19) 30
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Total other income (expense) (417) (242)
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INCOME/(LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST (1,325) 784
PROVISION FOR INCOME TAXES 949 256
MINORITY INTEREST 78 63
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INCOME/(LOSS) FROM CONTINUING OPERATIONS (2,352) 465
LOSS FROM DISCONTINUED OPERATIONS AFTER
INCOME TAXES AND MINORITY INTEREST (86) (56)
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NET INCOME/(LOSS) $ (2,438) $ 409
========== ==========
BASIC EARNINGS PER SHARE:
Average number of shares of common stock outstanding (in millions) 402.2 341.8
Earnings/(loss) per share $ (6.06) $ 1.20
DILUTED EARNINGS PER SHARE:
Average number of shares of common stock outstanding (in millions) 439.4 356.9
Additions to Income for Diluted Earnings Per Share (in millions) $ 21 $ 14
Earnings/(loss) per share $ (6.06) $ 1.19