1140761--3/5/2009--MIRANT_MID_ATLANTIC

related topics

{debt, indebtedness, cash}

{operation, natural, condition}

{gas, price, oil}

{condition, economic, financial}

{loss, insurance, financial}

{regulation, change, law}

{cost, contract, operation}

{financial, litigation, operation}

{stock, price, operating}

{competitive, industry, competition}

{cost, regulation, environmental}

Our revenues are unpredictable because most of our 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. The global financial crisis may have an effect on our business and financial condition in ways that we currently cannot predict. Because of the current market design in California our 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). 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. We are exposed to the risk of fuel and fuel transportation cost increases and volatility and interruption in fuel supply because our facilities generally do not have long-term agreements for the supply of natural gas, coal and oil. Our asset management, proprietary trading and fuel oil management activities may increase the volatility of our quarterly and annual financial results (Mirant Americas Generation and Mirant North America). 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. 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. Our business and activities are subject to extensive environmental requirements and could be adversely affected by such requirements, including future changes to them. Major environmental construction projects planned by 2010 at our Mid-Atlantic coal facilities may not meet their anticipated schedule, which would restrict these units from running at their maximum economic levels. If the operating constraints were sufficiently severe, Mirant Mid-Atlantic may not have sufficient cash flow to permit it to make distributions or, if more severe, to meet its obligations. The expected decommissioning and/or site remediation obligations of certain of our generating facilities may negatively affect our cash flows. 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). 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 facilities or our ability to operate our facilities. Such costs, in turn, may negatively affect our results of operations and financial condition. 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.

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1140761--3/5/2009--MIRANT_MID_ATLANTIC_LLC