Summary
This 8-K filing by Southern Company (SO) on August 12, 2002, primarily addresses potential accounting issues at its former subsidiary, Mirant Corporation. Mirant announced a review of its 2001 financial statements concerning potential overstatements in gas inventory, accounts payable, and accounts receivable. These issues have also attracted an informal inquiry from the SEC. While the ultimate impact is undetermined, Southern Company notes that any required adjustments to Mirant's financials that pre-date April 2, 2001, could affect Southern's reported earnings and net assets from discontinued operations. Importantly, Southern states these issues are not expected to impact its 2002 earnings or future earnings potential.
Key Highlights
- 1Mirant Corporation, a former subsidiary, is reviewing its 2001 financial statements for accounting irregularities.
- 2Potential overstatements identified by Mirant include $85 million in gas inventory, $100 million in accounts payable, and $68 million in accounts receivable.
- 3The SEC has initiated an informal inquiry into these accounting issues at Mirant.
- 4Any required adjustments to Mirant's pre-April 2, 2001 financials could impact Southern Company's reported earnings and net assets from discontinued operations.
- 5Southern Company explicitly states these Mirant-related issues will not affect its 2002 earnings or future earnings potential.
- 6Southern Company's CEO and CFO have submitted sworn statements and personal certifications to the SEC, as required by the Sarbanes-Oxley Act of 2002.