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Mirant Reports a 2nd-Quarter Loss of $2.2 Billion

October 29, 2003|From Bloomberg News

Mirant Corp., which filed for bankruptcy protection in July, said Tuesday that its loss widened to $2.2 billion in the second quarter as the U.S. electricity producer wrote down the value of power plants and energy-trading contracts.

The loss was equal to $5.44 a share, compared with a restated loss of $182 million, or 45 cents, a year earlier, Atlanta-based Mirant said. Revenue rose to $1.25 billion from $1.12 billion.

The value of Mirant's power plants in 14 U.S. states and its energy-trading contracts has fallen by at least $2.1 billion, the company said. Profit from generating plants has declined over the last two years as prices for fuels such as natural gas and oil climbed faster than electricity prices.

Mirant sought protection from creditors after banks and bondholders rejected a plan to refinance $4.9 billion in debt.

Mirant's financial results were delayed by an audit begun last year after Mirant replaced accounting firm Arthur Andersen with KPMG. In April, Mirant completed the audit, saying it had a $2.44-billion net loss in 2002 and that 2000 and 2001 profit had been inflated by $188 million.

The company reported results for the first quarter of this year in August. It hasn't set a target date for releasing third-quarter earnings.

Mirant's second-quarter loss included $2.1 billion in pretax expenses "related to the impairment of its North American goodwill," the company said.

Goodwill is the amount by which the purchase price of an asset exceeds the fair market value. Accounting rules require companies to record expenses when they adjust their books to eliminate the discrepancy.

The goodwill was associated with "all of Mirant's North American reporting units," spokesman David Payne said.

Shares of Mirant, which have plunged 76% this year, fell 3 cents to 46 cents in over-the-counter trading.

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