Spin

Despite the positive spin Mirant put on its quarterly earnings report, the numbers show it was a very tough quarter for the energy merchant and power producer. It reported a 9-cent/share ($42 million) net loss after special charges, compared to net income of 53 cents/share ($180 million) in the first quarter of last year. Mirant said its net income from continuing operations exceeded by 10% its prior guidance, but it still fell 35% to 33 cents per share from the 51 cents per share it earned in 1Q2001.

The USX Corp. board of directors has approved a reorganization plan calling for a tax-free spin-off of the steel-related assets into a separate publicly traded company, United States Steel Corp., while the energy business operates as Marathon Oil Corp. Plans for the split came nearly 20 years after USX acquired the Houston-based oil and gas E&P company in 1982.

The news was just too good to keep to themselves. UtiliCorp United bragged last Thursday that its infant spin-off, Aquila Inc. would show second quarter results up 300%, and since the proud parent holds 80% of Aquila, UtiliCorp’s earnings are expected to be up 300% as well.

As expected, Tulsa-based Williams Cos. said Friday it would spinoff its broadband network services provider Williams Communicationsin the form of a dividend by distributing nearly 400 millionshares, about 95% of Williams Communications common stock, toholders of the parent common stock.

To strengthen its capital structure before an anticipated spinoff this year, Tulsa-based Williams Communications exchanged assetsfor shares of stock with its parent company Williams yesterday. Inthe agreement, Williams received 24.3 million common shares ofWilliams Communications, bringing its total ownership to 420million shares, or 86% of the outstanding stock. In return forequity, Williams Communications will purchase its outstandingpromissory note from Williams and acquire the 15-story,750,000-square-foot Williams Technology Center, scheduled forcompletion this summer adjacent to Williams’ headquarters in Tulsa.

Seeking to put a positive spin on the state’s first foray intolong-term bulk electricity contracts, Gov. Gray Davis Tuesdayannounced that the state has reached agreement for the commercialterms on an unspecified number of contracts between the state waterresources department and bulk power suppliers, with volumes phasingupward from 500 to 5,000 MW over several years.

Illinova Corp. of Decatur, IL, parent of Illinois Power Co., could be the first energy company in the country to spin off its generation assets to an unregulated subsidiary.

Illinova Corp. of Decatur, IL, parent of Illinois Power Co.,could be the first energy company in the country to spin off itsgeneration assets to an unregulated subsidiary.

Schlumberger Ltd, one of the largest oil services companies inthe world, decided last week to spin off Sedco Forex Offshore, itsoffshore drilling company, and allow it to enter into a mergeragreement with Transocean Offshore Inc. for $3.2 billion in theresultant company’s stock. If approved by regulators, thecombination will form Transocean Sedco Forex, the largest offshoredrilling company in the world.