1138258--2/26/2010--MIRANT_MID_ATLANTIC

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{operation, natural, condition}

{debt, indebtedness, cash}

{loss, insurance, financial}

{cost, contract, operation}

{condition, economic, financial}

{gas, price, oil}

{cost, regulation, environmental}

{operation, international, foreign}

{financial, litigation, operation}

{competitive, industry, competition}

{stock, price, operating}

Risks Related to the Operation of our Business Our revenues are unpredictable because most of our generating facilities operate without long-term power sales agreements, and our revenues and results of operations depend on market and competitive forces that are beyond our control. Because of the current market design in California, our existing generating facilities may have a limited life unless we make significant capital expenditures to increase their commercial and environmental performance (Mirant Americas Generation and Mirant North America). We are exposed to the risk of fuel and fuel transportation cost increases and volatility and interruption in fuel supply because our generating facilities generally do not have long-term agreements for the supply of natural gas, coal and oil. Operation of our generating facilities involves risks that may have a material adverse effect on our cash flows and results of operations. Our operating results are subject to quarterly and seasonal fluctuations. Our generating facilities are located in a few geographic markets, resulting in concentrated exposure to the Mid-Atlantic market. We compete to sell energy, capacity and ancillary services in the wholesale power markets against some competitors that enjoy competitive advantages, including the ability to recover fixed costs through rate-base mechanisms and a lower cost of capital. The expected decommissioning and/or site remediation obligations of certain of our generating facilities may negatively affect our cash flows. Changes in technology may significantly affect our generating business by making our generating facilities less competitive. Terrorist attacks, future wars or risk of war may adversely affect our results of operations, our ability to raise capital or our future growth. Our operations are subject to hazards customary to the power generating industry. We may not have adequate insurance to cover all of these hazards. We are currently involved in significant litigation that, if decided adversely to us, could materially adversely affect our results of operations and profitability. Risks Related to Economic and Financial Capital Market Conditions Global financial institutions have been active participants in the energy and commodity markets and we hedge economically a substantial portion of our Mid-Atlantic coal-fired baseload generation with such parties. As such financial institutions consolidate and operate under more restrictive capital constraints and regulations in response to the recent financial crisis, there could be less liquidity in the energy and commodity markets, which could have a negative effect on our ability to hedge and transact with creditworthy counterparties. Greater regulation of energy contracts, including the regulation of OTC derivatives, could materially affect our ability to hedge economically our generation by reducing liquidity in the energy and commodity markets and, if we are required to clear such transactions on exchanges, by significantly increasing the collateral costs associated with such activities. We are exposed to credit risk resulting from a loss that may occur from the failure of a counterparty to perform according to the terms of a contractual arrangement with us, particularly in connection with our non-collateralized power hedges entered into by Mirant Mid-Atlantic with financial institutions. Changes in commodity prices may negatively affect our financial results by increasing the cost of producing power or lowering the price at which we are able to sell our power. Our use of derivative financial instruments in our asset management activities will not fully protect us from fluctuations in commodity prices and our risk management policy cannot eliminate the risks associated with these activities. Our asset management, proprietary trading and fuel oil management activities may increase the volatility of our quarterly and annual financial results. Risks Related to Governmental Regulation and Laws Our business and activities are subject to extensive environmental requirements and could be adversely affected by such requirements, including future changes to them. Our coal-fired generating units produce certain byproducts that involve extensive handling and disposal costs and are subject to government regulation. Changes in these regulations, or their administration, by legislatures, state and federal regulatory agencies, or other bodies may affect the costs of handling and disposing of these byproducts. Such costs, in turn, may negatively affect our results of operations and financial condition. Our business is subject to complex government regulations. Changes in these regulations, or their administration, by legislatures, state and federal regulatory agencies, or other bodies may affect the costs of operating our generating facilities or our ability to operate our facilities. Such costs, in turn, may negatively affect our results of operations and financial condition. Risks Related to Level of Indebtedness Our consolidated indebtedness and our obligations under the Mirant Mid-Atlantic leveraged leases could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting or refinancing our obligations. Mirant Americas Generation and Mirant North America are holding companies and we may not have access to sufficient cash to meet our obligations if our subsidiaries, in particular, Mirant Mid-Atlantic, are unable to make distributions. We may be unable to generate sufficient liquidity to service our debt and to post required amounts of cash collateral necessary to hedge market risk effectively (Mirant Americas Generation and Mirant North America).

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1138258--2/26/2010--MIRANT_MID_ATLANTIC_LLC