ATLANTA, April 25, 2002 — Mirant on Thursday reported income from operations of $134 million or 33 cents per diluted share. This exceeds by ten percent the guidance of 30 cents per diluted share that Mirant originally provided.
Mirant also reported two non-recurring items this quarter: a $167 million gain from the sale of BEWAG and an after-tax restructuring charge of $344 million. Including the effects of these non-recurring items, Mirant reported a net loss for the quarter of $42 million, or 9 cents per diluted share. The restructuring charge reflects the planned cancellation of turbines, the elimination of positions and other previously announced actions.
The company anticipates approximately $70 million in additional after-tax restructuring charges over the remaining quarters of the year. The total restructuring charge is within the amount Mirant projected in January.
“Mirant’s integrated business model and diversified global portfolio continue to perform well despite tough market conditions,” said Marce Fuller, president and chief executive officer, Mirant. “With the encouraging signs of an economic recovery and the steps we have taken to strengthen the business, Mirant is well positioned to capture market upside.”
Review of Operations
For the quarter, Mirant’s North American business contributed $77 million to consolidated income from operations, or 18 cents per diluted share for the quarter, compared to $174 million, or 49 cents per share for the same period last year. The income reduction is primarily due to lower power and gas margins across Mirant’s integrated U.S. and Canadian operations.
Despite lower margins, Mirant’s North American power and gas volumes continued to grow, demonstrating the strength of its North American business and establishing a first-quarter record for the company. Mirant sold approximately 98.6 million megawatt hours of electricity in North America, a 50 percent increase over the same quarter last year. The company also marketed 21.4 billion cubic feet per day of natural gas – an increase of 67 percent from the same period last year. This increase in volumes was achieved while collateral requirements decreased by more than $200 million from a peak of more than $800 million.
“Mirant continues to rank among the top three owners of competitive generation and the top 15 electricity producers in the U.S.,” said Fuller. “During the quarter, we strengthened that position by bringing an additional 474 megawatts on-line in Florida and continued with the construction and development of an additional 2,500 megawatts. Of this amount, 1,500 megawatts are scheduled to come on-line by August. By the end of 2002, Mirant expects to own or control more than 18,000 megawatts in the U.S..”
During the quarter, Mirant consolidated its European, Asian and Brazilian operations into a single international group. This group contributed income from operations of $104 million, or 25 cents per diluted share in the first quarter, compared to $74 million, or 21 cents per share for the first quarter 2001.
“Mirant’s international contract and franchise-based businesses continue to contribute solid earnings and cash flow, proving that a balanced global portfolio provides stability for Mirant,” said Fuller.
Mirant executed critical components of its business plan during the quarter. This business plan is focused on strengthening the corporation’s balance sheet and improving its liquidity despite prevailing market conditions. Affirms Earnings Guidance
Based on results to date, Mirant is maintaining its current guidance for income from operations of $1.60 to $1.70 per diluted share for the year with a forecast of 30 cents per diluted share for the second quarter 2002.
Mirant is a global competitive-energy company, integrating an extensive portfolio of power and natural gas assets with marketing and risk management expertise. Mirant has facilities in North America, the Caribbean, Asia and Europe, and operates one of the world’s largest energy marketing organizations from its headquarters in Atlanta. More information is at www.mirant.com .