SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3526
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
Mirant Services
Bargaining Unit Employee Savings Plan
c/o Mirant Services
1155 Perimeter Center W
Atlanta, Georgia 30338
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Mirant Corporation
1155 Perimeter Center W
Atlanta, Georgia 30338
Mirant Services
Bargaining Unit Employee Savings Plan
Financial Statements and schedules
December 31, 2001 and 2000
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits--December 31, 2001 and 2000
Statements of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 2001 and for the Period From December 19, 2000(Inception)
Through December 31, 2000
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
--December 31, 2001
Schedule II: Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
--December 31, 2000
Exhibits
A - Consent of Independent Public Accountants
B - Letter from Mirant Corporation regarding Arthur Andersen
i
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
Mirant Services Bargaining Unit
Employee Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Mirant Services Bargaining Unit Employee Savings Plan as of December 31,
2001 and 2000 and the related statements of changes in net assets available for
benefits for the year ended December 31, 2001 and for the period from December
19, 2000 (inception) through December 31, 2000. These financial statements and
schedules are the responsibility of the Plan's administrator. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000 and the changes in its net assets available for
benefits for the year ended December 31, 2001 and for the period from December
19, 2000 (inception) through December 31, 2000 in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules of assets (held at end of
year) are presented for purposes of additional analysis and are not a required
part of the basic financial statements but are supplementary information
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/Arthur Andersen, LLP
-----------------------
Arthur Andersen, LLP
Atlanta, Georgia
April 16, 2002
Mirant Services
Bargaining Unit Employee Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
----------- -------
Investments, at fair value as determined by quoted market prices $33,291,819 $25,737
Investments, at contract value (which approximates fair value), as determined
by the Trustee 20,561,330 45,329
Company Contributions Receivable 9,992 0
Accrued income 144,981 0
----------- -------
Net assets available for benefits $54,008,122 $71,066
=========== =======
The accompanying notes are an integral part of these statements.
2
Mirant Services
Bargaining Unit Employee Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the year ended December 31, 2001 and
For the period from December 19, 2000 (inception)
Through december 31, 2000
2001 2000
------------- -------
INVESTMENT (LOSS) INCOME:
Net (depreciation) appreciation in fair value of investments (Note 3) $(4,926,752) $ 2
Dividends 1,458,962 0
Interest 332,178 0
----------- -------
Total investment (loss) income (3,135,612) 2
----------- -------
CONTRIBUTIONS:
Participants 4,743,551 58,394
Rollovers 645,253 0
Company 1,282,328 12,670
----------- -------
Total contributions 6,671,132 71,064
----------- -------
TRANSFER FROM MERGED PLANS (Note 1) 52,128,933 0
----------- -------
BENEFITS PAID TO PARTICIPANTS OR BENEFICIARIES (1,438,331) 0
----------- -------
NET TRANSFER TO AFFILIATED PLAN (Note 2) (283,035) 0
----------- -------
ADMINISTRATIVE EXPENSES (6,031) 0
----------- -------
NET INCREASE 53,937,056 71,066
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 71,066 0
----------- -------
End of period $54,008,122 $71,066
=========== =======
The accompanying notes are an integral part of these statements.
3
Mirant Services
Bargaining Unit Employee Savings Plan
Notes to Financial Statements and Schedules
December 31, 2001 and 2000
1. Plan Description
The following description of the Mirant Services Bargaining Unit Employee
Savings Plan (the "Plan") provides only general information. Participants should
refer to the summary plan description or the plan document for a more complete
description of the Plan's provisions.
General
The Plan is a stock bonus plan sponsored by Mirant Services, LLC (the "Company")
covering all regular full-time and part-time employees who are covered under a
collective bargaining agreement. The Plan is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended.
On January 19, 2001, Southern Energy, Inc. announced, as part of its separation
from Southern Company, that it was changing its name to Mirant Corporation. They
began doing business as Mirant Corporation on January 22, 2001 and legally
changed the name on February 26, 2001. The Company, noted above, is the
employing company and plan sponsor.
Transferred Accounts and Merged Plans
In December 2000, an affiliate of Southern Energy Resources, Inc. acquired
certain assets of Potomac Electric Power Company ("PEPCO"). Pursuant to the
acquisition, certain former employees of PEPCO who were eligible to participate
in the PEPCO Bargaining Unit Retirement Savings Plan became eligible to
participate in the Plan on December 19, 2000. The accounts of the former PEPCO
employees who elected to a Voluntary Trust-to-Trust transfer were transferred
into the Plan in early 2001 and were mapped to investments under the Plan with
comparable investment objectives. The portions of the participants' accounts,
which were invested in the PEPCO stock fund prior to the transfer, were invested
in PEPCO common stock under the Plan.
Effective May 1, 2001, the assets of the Southern Energy Resources, Inc.
Bargaining Unit Savings Plan and the Southern Energy Resources, Inc. Savings
Plan for Covered Employees were merged into the Plan and were mapped to
investments under the Plan with comparable investment objectives. The portions
of the participants' accounts, which were invested in the Southern Company stock
fund prior to the transfer, were invested in Southern Company common stock under
the Plan.
Plan Administration
The Company appointed T. Rowe Price (the "Trustee") as trustee to execute
investment transactions and provide record-keeping services for the Plan. The
Company serves as plan administrator.
Contributions
Participants may elect to contribute a percentage of their base compensation, on
a pretax or after-tax basis, subject to certain limitations defined by the Plan,
into any of the 12 core investment funds offered by the Plan. Participants may
4
change their contribution percentages at any time. The Plan has distinct
characteristics for the various bargaining units noted above relative to
eligibility and contributions (Note 6).
Profit-Sharing Arrangement
For all collectively bargained full-time and part-time employees who participate
in a defined benefit plan with a 1.0 formula, as defined, the Company may elect
to make a discretionary annual profit-sharing contribution to the Plan of the
participant's eligible compensation to be allocated pro rata. Eligible
compensation is the participant's actual base salary pay plus short-term
incentive pay received during the period. For the year ended December 31, 2001,
the discretionary contribution was $9,992. There were no discretionary
profit-sharing contributions from December 19, 2000 (inception) through December
31, 2000.
Participant Accounts and Vesting
Each participant's account is credited with his/her contribution, the Company's
matching contribution, and plan earnings (losses). Participants are immediately
fully vested in these contributions. Discretionary profit-sharing contributions
are 100% vested after five years of service.
Benefits
Upon termination of service, death, or disability, a participant or his/her
beneficiary (upon the death of the participant) may elect to receive an amount
equal to the value of his/her account in a lump-sum distribution. If account
balances are less than $5,000, participants will automatically receive a
lump-sum payment. If a participant retires, he/she may elect to receive a
lump-sum distribution or annual installments for a period not to exceed 20 years
or life expectancy. Distributions upon termination of service, retirement,
disability, or death are normally made in cash unless shares of common stock are
requested.
Rollovers
Participants may roll over a distribution from a qualified retirement plan of a
previous employer to the Plan.
Investment Options
A participant may direct his/her contributions into any of the investment fund
options offered by the Plan. A participant may change his/her election options
at any time. Company matching and discretionary profit-sharing contributions are
initially invested in the company stock fund until the participant elects to
redirect the contributions to another investment fund.
Participants with investments held in the Southern Company stock fund and PEPCO
stock fund will have five years (until March 31, 2006) to liquidate the stock
and transfer it into other investment options within the Plan. These investments
are considered frozen; therefore, no new contributions may be made into this
option. There are no other restrictions on transferring in or out of any other
investments within the Plan.
Loans to Participants
A participant may borrow the lesser of $50,000, less the highest outstanding
loan balance in the previous 12 months, or 50% of his/her vested account
balance, with a minimum loan amount of $1,000. Loans are repayable through
payroll deductions over the respective term of the loan. The interest rate is
determined by the plan administrator based on the current prime rate at the time
of the loan and is fixed over the life of the note. A participant may have up to
two general-purpose loans and one loan for a residence outstanding at any given
time.
5
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared using the accrual
method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the Plan's management to use
estimates and assumptions that affect the net assets available for benefits and
the changes therein. Actual results could differ from these estimates.
Administrative Expenses
Record-keeping fees are paid by the Plan. All other administrative expenses are
paid by the Company.
Investment Valuation
Investments other than investment contracts are valued at quoted market prices.
Securities traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year; investments traded in
the over-the-counter market and listed securities for which no sale was reported
on the last day of the plan year are valued at the last reported bid price. The
Plan's investment in the T. Rowe Price Stable Value Fund is fully
benefit-responsive and is stated at contract value (which approximates fair
value) in accordance with Statement of Position 94-4, "Reporting of Investment
Contracts Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans."
Investment securities, in general, are exposed to various risks, including
credit, interest, and overall market volatility risks. Due to the level of risk
associated with certain investment securities, it is possible that changes in
values of investment securities will occur and that such changes could
materially affect the amount reported in the statements of net assets available
for benefits.
Net Appreciation (Depreciation) in Fair Value of Investments
Net realized gains (losses) and unrealized appreciation (depreciation) are
recorded in the accompanying statements of changes in net assets available for
benefits as net appreciation (depreciation) in fair value of investments.
Transfer to Affiliated Plan
During 2001, due to changes in employment status, the Plan transferred account
balances of certain participants to and from the Mirant Services Employee
Savings Plan.
Forfeitures
A participant will forfeit the value of his/her account if he/she separates from
service prior to becoming vested. Such forfeitures are utilized to reduce future
employer contributions. For the year ended December 31, 2001, $0 was used to
reduce employer contributions. As of December 31, 2001 and 2000, there were no
outstanding forfeiture accounts.
Related-Party Transactions
For the 2001 and 2000 plan years, certain plan investments are managed by T.
Rowe Price; therefore, these transactions qualify as party-in-interest
transactions.
6
3. Investments
Individual assets that represent 5% or more of the Plan's net assets available
for benefits as of December 31, 2001 and 2000 are as follows:
2001 2000
----------- -------
T. Rowe Price Stable Value Fund $16,638,749 $45,329
Mirant Corporation Stock Fund 5,241,274 13,262
Blue Chip Growth Fund 9,950,280 5,027
PEPCO Stock Fund 6,382,751 0
Southern Company Stock Fund 3,818,451 0
The Plan's investments (including gains and losses on investments bought and
sold as well as held during the year) appreciated (depreciated) as follows:
2001 2000
----------- -----
Investments, at fair value:
Mutual funds $(1,625,916) $0
Common stock (3,300,836) 2
----------- --
$(4,926,752) $2
=========== ==
4. Tax Status
The Company has applied for a determination letter with the Internal Revenue
Service. However, the plan administrator believes that the Plan is currently
designed and is being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, the plan administrator believes that the
Plan was qualified and the related trust was tax-exempt as of the financial
statement dates.
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7
6. Key Provisions for Respective Collective Bargaining Units
The following are key provisions of the Plan for each collective bargaining
unit:
Employee Contribution
Unions Eligibility Company Match Percentage
------------------ --------------------------------------- ------------------------------------ ------------------------------
Midwest Union Regular full-time and regular part-time Eligible after one year of service; 1% to 16% of base pay, on a
members of the United Steelworkers of 75% of the first 6% of participant's befor-tax and/or after-tax basis
America Local #12502 compensation contributed to the Plan
California Union Regular full-time and regular part-time Company match is based upon years of 1% to 15% of base pay, on a
members of the International Brotherhood service befor-tax and/or after-tax basis
of Electrical Workers Local #1245
Mid-Atlantic Union Regular full-time and regular part-time 40% of the first 6% of participant's 1% to 19% of base pay, on a
members of the International Brotherhood compensation contributed to the Plan befor-tax and/or after-tax basis
of Electrical Workers Local #1900
New York Union Regular full-time and regular part-time Eligible after one year of service; 1% to 20% of base pay, on a
members of the International Brotherhood 75% of the first 6% of participant's befor-tax and/or after-tax basis
of Electrical Workers Local #503, upon compensation contributed to the Plan
completion of one year of service
New England Union Regular full-time and regular part-time Eligible after one year of service; 1% to 15% of base pay, on a
members of Utility Workers' Union of 100% of the first 4% of participant's befor-tax and/or after-tax basis
America Local #369 and #480 compensation contributed to the Plan
8
Mirant Services
Bargaining Unit Employee Savings Plan
Schedule H, line 4i--Schedule of Assets (held at end of year)
December 31, 2001
Identity of Issuer and Description of Investment Cost Current Value
--------------------------------------------------------------- ---- -------------
Franklin Small Cap Growth Fund, 35,277 shares (a) $ 1,099,697
Scudder International Fund, 7,477 shares (a) 274,105
American New Perspective Fund, 12,236 shares (a) 265,404
* T. Rowe Price Stable Value Fund, 16,638,749 units (a) 16,638,749
* Mirant Corporation Stock Fund, 327,170 shares (a) 5,241,274
PIMCO Total Return Fund, 75,350 shares (a) 788,166
* T. Rowe Price Equity Index Trust Fund, 74,334 shares (a) 2,291,710
* T. Rowe Price Personal Strategy Income Fund, 15,514 shares (a) 198,746
* T. Rowe Price Personal Strategy Balanced Fund, 63,970 shares (a) 965,305
* T. Rowe Price Personal Strategy Growth Fund, 53,521 shares (a) 938,767
* T. Rowe Price Small Cap Stock Fund, 39,178 shares (a) 992,772
* T. Rowe Price Blue Chip Growth Fund, 343,468 shares (a) 9,950,280
PEPCO Stock Fund, 282,798 shares (a) 6,382,751
* Southern Company Stock Fund, 150,629 shares (a) 3,818,451
* T. Rowe Price Tradelink Investments, 84,391 shares (a) 84,391
* Participant loans (interest rates range from 4.75% to 9.5%) (a) 3,922,581
-----------
$53,853,149
===========
* Represents a party in interest.
(a) Participant-directed.
The accompanying notes are an integral part of this schedule.
9
Mirant Services
Bargaining Unit Employee Savings Plan
Schedule H, line 4i--Schedule of Assets (held at end of year)
December 31, 2000
Identity of Issuer and Description of Investment Cost Current Value
--------------------------------------------------------- ---- -------------
Franklin Small Cap Growth Fund, 58 shares (a) $ 2,282
Scudder International Fund, 8 shares (a) 417
American New Perspective Fund, 36 shares (a) 877
T. Rowe Price Stable Value Fund, 45,329 units (a) 45,329
* Mirant Corporation Stock Fund, 468 shares (a) 13,262
PIMCO Total Return Fund, 36 shares (a) 377
* T. Rowe Price Equity Index Trust Fund, 28 shares (a) 978
* T. Rowe Price Personal Strategy Income Fund, 21 shares (a) 273
* T. Rowe Price Personal Strategy Balanced Fund, 33 shares (a) 528
* T. Rowe Price Personal Strategy Growth Fund, 47 shares (a) 905
* T. Rowe Price Small Cap Stock Fund, 34 shares (a) 811
* T. Rowe Price Blue Chip Growth Fund, 148 shares (a) 5,027
-------
$71,066
=======
* Represents a party in interest.
(a) Participant-directed.
The accompanying notes are an integral part of this schedule.
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed by the undersigned thereunto duly
authorized.
MIRANT SERVICES, LLC
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
/s/Vance Booker
-----------------------------
Vance Booker
Senior Vice President
Administration and Technical
May 1, 2002
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into Mirant Corporation's previously filed
Registration Statement File No. 333-56574.
/s/Arthur Andersen, LLP
-----------------------
Arthur Andersen, LLP
Atlanta, Georgia
April 25, 2002
Exhibit B
Mirant Corporation
1155 Perimeter Center West
Atlanta, Georgia 30338
May 1, 2002
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Re: Report of Independent Audit by Arthur Andersen
Ladies and Gentlemen:
In connection with the delivery of the report of independent public accountants
relating to the audit of the statements of net assets available for benefits of
the Mirant Services Bargaining Unit Employee Savings Plan (the "Plan") as of
December 31, 2001 and 2000, and the related statements of changes in net assets
available for benefits for the year ended December 31, 2001 and for the period
from December 19, 2000 (inception) through December 31, 2000 by Arthur Andersen
LLP ("Arthur Andersen") which has been included by Mirant Corporation ("Mirant")
in its Annual Report for the Plan on Form 11-K for the fiscal year ended
December 31, 2001, Arthur Andersen has represented to Mirant that the audit was
subject to Arthur Andersen's quality control system for the US accounting and
auditing practice to provide reasonable assurance that the engagement was
conducted in compliance with professional standards, that there was appropriate
continuity of Arthur Andersen personnel working on the audit, availability of
national office consultation, and availability of personnel at foreign
affiliates of Arthur Andersen to conduct the relevant portions of the audit.
Very truly yours,
Mirant Corporation
By:/ s/ Vance Booker
-----------------------------------
Vance Booker
Senior Vice President
Administration and Technical