Summary
This 8-K filing from The Southern Company (SO), dated November 12, 2002, addresses potential impacts arising from accounting issues identified at its former subsidiary, Mirant Corporation. Mirant announced accounting errors in its 2001 financial statements, leading to an overstatement of net income and balance sheet adjustments. While these specific adjustments for Mirant's discontinued operations do not directly affect Southern Company's current financial statements, the filing clarifies that a reaudit of Mirant's historical financial statements could potentially impact Southern's reported earnings and net assets related to discontinued operations for periods prior to the spin-off. Importantly, Southern Company's management currently anticipates that these Mirant-related accounting issues will not necessitate a reaudit of Southern's own financial statements for 2000 and 2001. Furthermore, any potential adjustments related to Mirant's discontinued operations would not impact Southern Company's future earnings potential, financial position, liquidity, or cash flows. Investors should note that this information is being furnished under Regulation FD and is not considered filed.
Key Highlights
- 1Mirant Corporation, a former subsidiary of Southern Company, identified accounting errors in its 2001 financial statements, overstating net income by $51 million for the period January 1, 1999, through December 31, 2001.
- 2These accounting errors led Mirant to request its independent auditors to reaudit its 2000 and 2001 financial statements.
- 3Mirant's identified balance sheet adjustments for 2000 and 2001 do not affect Southern Company's financial statements because Mirant is reported as discontinued operations.
- 4A reaudit of Mirant's financials could impact Southern Company's reported earnings from discontinued operations and net assets of discontinued operations for periods prior to Southern's spin-off of Mirant.
- 5Southern Company's management does not currently anticipate needing to reaudit its own 2000 and 2001 financial statements due to Mirant's issues.
- 6Any adjustments related to Mirant's discontinued operations will not affect Southern Company's 2002 earnings, future earnings potential, financial position, liquidity, or cash flows.
- 7The information in this filing is furnished under Regulation FD and is not deemed 'filed' for purposes of Section 18 of the Exchange Act.