Filed by RRI Energy, Inc.
Pursuant to Rule 425 of the Securities Act of 1933, as amended, and
deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934, as amended
RRI Energy, Inc. (File No. 1-16455)
Subject Company: Mirant Corporation (File No. 1-16107)
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P.O. BOX 3795
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HOUSTON, TEXAS 77253
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TEL 832 357 3000
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FAX 832 357 5503 |
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For more information:
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Dennis Barber, Investor Relations: 832-357-3042 |
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Laurie Fickman, Media Relations: 832-357-7720 |
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www.rrienergy.com |
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For immediate release:
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November 3, 2010 |
RRI Energy Reports Third Quarter 2010 Results
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Merger with Mirant to create GenOn Energy will create significant near-term value driven
by $150 million annual cost savings |
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Received stockholder approval from both companies |
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Entered into revolving credit facility and agreements to borrow $1.925
billion, which will satisfy the financing condition in the merger agreement |
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Received FERC approval and NY Public Service Commission clearance |
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Expect to close by the end of the year |
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Third quarter financial results improved year-over-year and reflect continued depressed
commodity prices and weak economic conditions |
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Investments to improve equipment performance resulted in 3% reduction in unplanned
outage rate compared to Q1 |
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New Castle and Titus power plant non-cash impairments totaling $113 million charged in
third quarter |
HOUSTON RRI Energy, Inc. today is reporting open EBITDA of $212 million for the third quarter of
2010, compared to $133 million for the third quarter of 2009. The improvement was primarily due to
improved energy margins driven by higher heat rates related to warmer weather in July and early
August and improved economic conditions compared to the same period last year. The company
reported adjusted EBITDA of $212 million in the third quarter of 2010, compared to $100 million in
the third quarter of 2009. The improvement was primarily due to the items mentioned above and a
reduction in losses from coal hedges. Free cash flow provided by continuing operations during the
first nine months of 2010 was $84 million, compared to a use of cash of ($182) million for the
first nine months of 2009. The improvement was primarily a result of improved earnings and lower
environmental capital expenditures.
We have made excellent progress toward completing the steps necessary to finalize our proposed
merger with Mirant and expect to close the transaction by the end of the year after we receive
clearance from the Department of Justice, said Mark Jacobs, president and chief executive officer
of RRI Energy. Third quarter financial results and market conditions have improved relative to
last year, but still reflect continued depressed commodity prices and weak economic conditions.
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Open EBITDA was $241 million for the first nine months of 2010, compared to $129 million for the
same period of 2009. Adjusted EBITDA was $244 million for the first nine months of 2010, compared
to $42 million for the same period of 2009. The improvements were due to the same factors as
described above, partially offset by increased plant operation and maintenance expenses to improve
equipment performance.
Income from continuing operations before income taxes for the third quarter of 2010 was $41
million, compared to a loss from continuing operations of $9 million for the third quarter of 2009.
The 2010 reported results include net unrealized gains from energy derivatives of $51 million, $5
million in merger-related costs and a $113 million charge for long-lived assets impairments. The
reported numbers for 2009 include net unrealized gains from energy derivatives of $7 million.
The loss from continuing operations before income taxes for the first nine months of 2010 was $361
million, compared to $334 million for the first nine months of 2009. The 2010 reported results
include net unrealized gains from energy derivatives of $112 million, a $17 million charge for
western states litigation and similar settlements, $19 million in merger-related costs and a $361
million charge for long-lived assets impairments. The reported numbers for 2009 include net
unrealized losses from energy derivatives of $30 million and $8 million in severance charges.
Operating cash flow from continuing operations was $252 million for the first nine months of 2010,
compared to a use of cash of ($275) million for the same period of 2009.
Non-GAAP Financial Measures
This press release and the attached financial tables include the following non-GAAP financial
measures:
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EBITDA |
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Adjusted EBITDA |
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Open EBITDA |
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Adjusted cash flow provided by/(used in) continuing operations |
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Free cash flow provided by/(used in) continuing operations |
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Open energy gross margin |
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Other margin |
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Open gross margin |
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Total controllable costs |
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Total controllable costs/MWh |
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Total controllable costs/MW capacity |
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Gross debt |
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Net debt |
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Operation and maintenance, excluding severance |
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General and administrative, excluding severance and merger-related costs |
A reconciliation of these financial measures and the most directly comparable GAAP measures is
included above or in the attached financial tables. Additional information regarding these
measures, including a discussion of their usefulness and purpose, is included in the Form 8-K
furnished along with this press release. Certain factors that could affect GAAP financial measures
are not accessible on a forward-looking basis, but could be material to future reported earnings
and cash flows.
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Webcast Of Earnings Conference Call
RRI Energy will host its third quarter 2010 earnings conference call beginning at 10:00 a.m.
Eastern Time on Wednesday, November 3, 2010. The conference call will be webcast live with audio
and slides at www.rrienergy.com in the Investor Relations section. A replay of the call can be
accessed approximately two hours after the calls completion.
About RRI Energy, Inc.
RRI Energy, Inc. (NYSE:RRI) based in Houston, provides electricity to wholesale customers in the
United States. The company is one of the largest independent power producers in the nation with
more than 14,000 megawatts of power generation capacity across the United States. These
strategically located generating assets use natural gas, fuel oil and coal. RRI routinely posts all
important information on its web site at www.rrienergy.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are statements that contain projections, estimates or
assumptions about our revenues, income, capital structure and other financial items, our plans and
objectives for future operations or about our future economic performance, possible transactions,
dispositions, financings or offerings, and our view of economic and market conditions. In many
cases you can identify forward-looking statements by terminology such as anticipate, estimate,
believe, think, continue, could, intend, may, plan, potential, predict, should,
will, expect, objective, projection, forecast, goal, guidance, outlook, effort,
target and other similar words. However, the absence of these words does not mean that the
statements are not forward-looking.
Actual results may differ materially from those expressed or implied by forward-looking statements
as a result of many factors or events, including, but not limited to, statements about the benefits
of the proposed merger involving us and Mirant Corporation, including our future financial position
and operating results and the expected timing or ability to obtain necessary approvals and satisfy
conditions to complete the merger and the related financings, legislative, regulatory and/or market
developments, the outcome of pending or threatened lawsuits, regulatory or tax proceedings or
investigations, the effects of competition or regulatory intervention, financial and economic
market conditions, access to capital, the timing and extent of changes in law and regulation
(including environmental), commodity prices, prevailing demand and market prices for electricity,
capacity, fuel and emission allowances, weather conditions, operational constraints or outages,
fuel supply or transmission issues, hedging ineffectiveness and other factors we discuss or refer
to in the Risk Factors sections of our most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission (SEC). Our filings and other
important information are also available on the Investor Relations page of our website at
www.rrienergy.com.
Each forward-looking statement speaks only as of the date of the particular statement and we
undertake no obligation to update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise.
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Additional Information and Where To Find It
This news release does not constitute an offer to sell or the solicitation of an offer to buy any
securities nor shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. In connection with the proposed merger between us and Mirant, we
filed with the SEC a registration statement on Form S-4 that includes a joint proxy statement of us
and Mirant and that also constitutes a prospectus of us. The registration statement was declared effective by the SEC on September 13, 2010. We 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 SECs website
(www.sec.gov). You may also obtain these documents, free of charge, from our website
(www.rrienergy.com) under the tab Investor Relations and then under the heading Company
Filings. You may also obtain these documents, free of charge, from Mirants website
(www.mirant.com) under the tab Investor Relations and then under the heading SEC Filings.
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