Mirant Reports Q3 2009 Results

ATLANTA, Nov. 6 -- Income from continuing operations of $55 million compared to income from continuing operations of $1.607 billion for the third quarter of 2008

-- Adjusted EBITDA from continuing operations of $311 million compared to adjusted EBITDA from continuing operations of $278 million for the third quarter of 2008

-- Reduced 2009 adjusted EBITDA guidance from $873 million to $860 million

-- Increased 2010 adjusted EBITDA guidance from $570 million to $617 million

Mirant Corporation (NYSE:MIR) today reported income from continuing operations for the third quarter of 2009 of $55 million compared to income from continuing operations of $1.607 billion for the same period in 2008. Results for 2009 include unrealized losses, principally on hedges, of $174 million compared to unrealized gains, again principally on hedges, of $1.395 billion for 2008. Per share results from continuing operations for the third quarter of 2009 were $0.38 per share, compared to $8.69 per share from continuing operations for the third quarter of 2008.

Mirant reported adjusted income from continuing operations of $238 million for the third quarter of 2009, or $1.63 per diluted share, compared to adjusted income from continuing operations of $216 million for the same period of 2008, or $1.17 per diluted share. Adjusted income from continuing operations excludes unrealized gains and losses and other non-recurring items. The quarter over quarter increase resulted principally from higher realized gross margins.

Adjusted EBITDA from continuing operations for the third quarter of 2009 was $311 million, compared to adjusted EBITDA from continuing operations of $278 million for the third quarter of 2008. The increase in adjusted EBITDA resulted principally from higher realized value of hedges and higher realized results from proprietary trading activities, partially offset by lower energy gross margins from generation.

Net cash provided by operating activities of continuing operations for the third quarter of 2009 was $290 million compared to net cash provided by operating activities of continuing operations of $632 million for the same period in 2008. The decrease was primarily the result of significant cash collateral returned in the third quarter of 2008.

Nine Months 2009 versus Nine Months 2008

Mirant reported income from continuing operations of $598 million for the first nine months of 2009, compared to income from continuing operations of $621 million for the same period in 2008. Results for 2009 include unrealized gains, principally on hedges, of $66 million compared to unrealized gains, again principally on hedges, of $218 million for 2008. Per share results from continuing operations for the first nine months of 2009 were $4.12 per share, compared to $2.86 per share from continuing operations for the same period in 2008.

Mirant reported adjusted income from continuing operations of $484 million for the first nine months of 2009, or $3.34 per diluted share, compared to adjusted income from continuing operations of $440 million for the same period in 2008, or $2.03 per diluted share. Adjusted income from continuing operations excludes unrealized gains, the MC Asset Recovery settlement with Southern Company and other non-recurring items. The period over period increase resulted principally from higher realized gross margins partially offset by higher net interest expense.

Adjusted EBITDA from continuing operations for the first nine months of 2009 was $706 million, compared to adjusted EBITDA from continuing operations of $632 million for the same period in 2008. The period over period increase resulted principally from higher realized value of hedges and higher realized results from proprietary trading activities, partially offset by lower energy gross margins from generation.

Net cash provided by operating activities of continuing operations during the first nine months of 2009 was $721 million compared to net cash provided by operating activities of continuing operations of $587 million in the same period of 2008. The increase was primarily the result of working capital changes and higher realized gross margins.

As of September 30, 2009, Mirant had cash and cash equivalents of $2.029 billion, of which $574 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 $116 million to its parent, Mirant Americas Generation, in November 2009. Although the company expects Mirant North America to remain in compliance with its financial covenants, it is likely it will be restricted from making distributions in future periods, beyond permitted interest payable by its parent, primarily because of the significant capital expenditure program underway to comply with the Maryland Healthy Air Act. Upon completion of its capital expenditure program, and after such 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 potential restriction on future distributions to have any effect on its operations.

As of September 30, 2009, Mirant had total outstanding debt of $2.633 billion.

Guidance

Mirant today reduced its 2009 adjusted EBITDA guidance from $873 million to $860 million and increased its 2010 adjusted EBITDA guidance from $570 million to $617 million.

"In these challenging economic times during which prices for commodities, including electricity, have remained at relatively low levels, our strategy of hedging has mitigated the impact on Mirant in 2009 and somewhat in 2010," said Edward R. Muller, chairman and chief executive officer. "Hedging, together with our balance sheet that provides adequate liquidity for our business, has kept us financially healthy."

Earnings Call

Mirant is hosting an earnings call today to discuss its third quarter 2009 financial results. The call will be held from 9-10 a.m. EST. 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 888 213 3710 (International 913 312 0654) and entering pass code 4279837.

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 www.mirant.com.

A recording of the event will be available for playback on the company's website beginning today at noon EST. A replay also will be available by dialing 888 203 1112 (International 719 457 0820) and entering the pass code 4279837.

Mirant is a competitive energy company that produces and sells electricity in the United States. Mirant owns or leases approximately 10,112 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.