================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            -------------------------

                                    FORM 10-Q
              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                      For the Quarter Ended March 31, 2002
                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition
                   Period from _____to_____

                         MIRANT AMERICAS GENERATION, LLC
             (Exact name of registrant as specified in its charter)

      Delaware                                     51-0390520
----------------------------------     ----------------------------------------
(State or other Jurisdiction of         (I.R.S. Employer Identification No.)
 Incorporation or Organization)

1155 Perimeter Center West, Suite 100, Atlanta, Georgia          30338
-------------------------------------------------------- ----------------------
     (Address of Principal Executive Offices)                  (Zip Code)

                                 (678) 579-5000
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

                                   ----------
     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No___

     Registrant meets the conditions set forth in General Instruction H(i)(a)
and (b) of Form 10-Q and is therefore filing this Form with the permitted
reduced disclosure format.


<PAGE>



                Mirant Americas Generation, LLC and Subsidiaries

                                      INDEX

                  For the Quarterly Period Ended March 31, 2002

                                                                            Page
                                                                          Number
                                                                         ------
DEFINITIONS                                                                  1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION                   2
                         PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements (Unaudited):
         Condensed Consolidated Statements of Income                         3
         Condensed Consolidated Balance Sheets                               4
         Condensed Consolidated Statements of Member's Equity                6
         Condensed Consolidated Statements of Cash Flows                     7
         Notes to the Condensed Consolidated Financial Statements            8
Item 2. Management's Discussion and Analysis of Results of Operations
         and Financial Condition                                            21
Item 3. Quantitative and Qualitative Disclosures about Market Risk          26

                           PART II - OTHER INFORMATION
Item 1. Legal Proceedings                                                   27
Item 2. Changes in Securities and Use of Proceeds                 Inapplicable
Item 3. Defaults Upon Senior Securities                           Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders       Inapplicable
Item 5. Other Information                                         Inapplicable
Item 6. Exhibits and Reports on Form 8-K                                    28
Signatures

                                       i
<PAGE>

<TABLE>
<CAPTION>

                                   DEFINITIONS
<S>                                                 <C>
TERM                                              MEANING
-----------------------------------------------   --------------------------------------------------------------
CAISO                                             California Independent System Operator
Clean Air Act                                     Clean Air Act Amendments of 1990
CPUC                                              California Public Utilities Commission
DWR                                               California Department of Water Resources
ECSA                                              Energy and Capacity Sales Agreement
Energy Act                                        Energy Policy Act of 1992
EPA                                               U. S. Environmental Protection Agency
FASB                                              Financial Accounting Standards Board
FERC                                              Federal Energy Regulatory Commission
Mirant                                            Mirant Corporation and its subsidiaries
Mirant Americas                                   Mirant Americas, Inc.
Mirant Americas Energy Marketing                  Mirant Americas Energy Marketing, L. P.
Mirant Americas Generation or the Company         Mirant Americas Generation, LLC and its subsidiaries
Mirant Delta                                      Mirant Delta, LLC
Mirant Mid-Atlantic                               Mirant Mid-Atlantic, LLC.
Mirant New England                                Mirant New England, LLC.
Mirant New York                                   Mirant New York, Inc. and Mirant New York Investments,
                                                  Inc., collectively
Mirant Peaker                                     Mirant Peaker, LLC
Mirant Potomac River                              Mirant Potomac River, LLC
Mirant Potrero                                    Mirant Potrero, LLC
Moody's                                           Moody's Investors Service
MW                                                Megawatt
OCI                                               Other Comprehensive Income
Pacific Gas and Electric                          Pacific Gas and Electric Co.
PEPCO                                             Potomac Electric Power Company
PJM                                               PJM Interconnection Market
PX                                                California Power Exchange Corporation
RMR                                               Reliability-Must-Run
SCE                                               Southern California Edison
SEC                                               Securities and Exchange Commission
SFAS                                              Statement of Financial Accounting Standards
State Line                                        State Line Energy, LLC

</TABLE>




                                       1
<PAGE>


           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

     The information presented in this quarterly report on Form 10-Q includes
forward-looking statements, in addition to historical information. These
statements involve known and unknown risks and relate to future events, Mirant
Americas Generation's future financial performance or projected business
results. In some cases, forward-looking statements may be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "targets," "potential" or "continue" or the
negative of these terms or other comparable terminology.

    Forward-looking statements are only predictions. Actual events or results
may differ materially from any forward-looking statement as a result of various
factors, which include:

o    legislative and regulatory initiatives regarding  deregulation,  regulation
     or restructuring of the electric utility industry;
o    the extent and timing of the entry of additional competition in the markets
     of our subsidiaries and affiliates;
o    our pursuit of potential  business  strategies,  including  acquisitions or
     dispositions of assets or internal restructuring;
o    state, federal and other rate regulations in the United States;
o    changes in or application of  environmental  and other laws and regulations
     to which we and our subsidiaries and affiliates are subject;
o    political,  legal and economic  conditions and  developments  in the United
     States;
o    financial market conditions and the results of our financing efforts;
o    changes in market conditions, including developments in energy and
     commodity supply, volume and pricing and interest rates;
o    weather and other natural phenomena;
o    performance  of our projects  undertaken  and the success of our efforts to
     invest in and develop new opportunities;
o    developments in the California power markets, including, but not limited
     to, governmental intervention, deterioration in the financial condition of
     our counterparties, default on receivables due and adverse results in
     current or future litigation;
o    the direct or indirect effects on our business, including the availability
     of insurance, resulting from the terrorist actions on September 11, 2001 or
     any other terrorist actions or responses to such actions, including, but
     not limited to, acts of war;
o    the direct or indirect effects on our business resulting from the financial
     difficulties of Enron, or other competitors of Mirant Americas Generation,
     including, but not limited to, their effects on liquidity in the trading
     and power industry, and its effects on the capital markets views of the
     energy or trading industry and our ability to access the capital markets on
     the same favorable terms as in the past;
o    the direct or  indirect  effects on our  business  of the  lowering  of our
     credit rating or the credit ratings of Mirant Mid-Atlantic, Mirant Americas
     Energy  Marketing  and Mirant (or actions  that may be taken in response to
     changing  credit  ratings  criteria),   including,   increased   collateral
     requirements upon Mirant Americas Energy Marketing and Mirant,  demands for
     increased  collateral by current  counterparties  of Mirant Americas Energy
     Marketing  and Mirant,  refusal by current or potential  counterparties  to
     enter into  transactions  with us,  Mirant  Mid-Atlantic,  Mirant  Americas
     Energy  Marketing and Mirant and our respective  inability to obtain credit
     or capital in desired amounts or on favorable terms; and
o    other factors discussed in this Form 10-Q and in other reports (including
     our annual report on Form 10-K filed March 28, 2002) filed from time to
     time with the SEC.

     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance or achievements. We expressly disclaim a duty to update
any of the forward-looking statements contained herein.

                                       2
<PAGE>
                MIRANT AMERICAS GENERATION, LLC AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



                                                    For the Three Months
                                                       Ended March 31,
                                                       2002           2001
                                                   ----------      ---------
                                                        (in millions)
Operating Revenues                                     $ 729        $ 1,427
                                                       ------       -------

Cost of fuel, electricity and other products             386          1,014
                                                       ------       -------
Gross Margin                                             343            413
Other Operating Expenses:
Maintenance                                               23             20
Depreciation and amortization                             30             39
Selling, general and administrative                       34            122
Taxes other than income taxes                             23             19
Restructuring charge (Note F)                              3              -
Other                                                     52             62
                                                       ------       -------
Total other operating expenses                           165            262
                                                       ------       -------
Operating Income                                         178            151
                                                       ------       -------
Other Income (Expense), net:
Interest income                                           14             10
Interest expense                                         (63)           (43)
Other, net                                                 1              1
                                                       ------       -------
Total other expense, net                                 (48)           (32)
                                                       ------       -------
Income From Continuing Operations Before
    Income Taxes                                         130            119
Provision for Income Taxes                                44             48
                                                       ------       -------
Income From Continuing Operations                         86             71
                                                       ------       -------
Income from Discontinued Operations,
    net of tax provision of $2 and $4 in 2002
    and 2001, respectively                                 2              6
                                                       ------       -------
Net Income                                             $  88        $    77
                                                       =====        =======






         The accompanying notes are an integral part of these condensed
                            consolidated statements.

                                        3

<PAGE>
<TABLE>
<CAPTION>

                 MIRANT AMERICAS GENERATION, LLC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                      At March 31,
                                                                          2002      At December 31,
ASSETS:                                                                (Unaudited)       2001
                                                                      ------------  ---------------
Current Assets:                                                              (in millions)
<S>                                                                      <C>              <C>
Cash and cash equivalents                                            $      2         $    15
Receivables:
 Customer accounts                                                         14               9
 Affiliates, less provision for uncollectibles
  of $123 and $123 for 2002 and 2001, respectively                        339             282
 Notes receivable from affiliates                                         627             246
Assets from risk management activities (Note E)                            71             125
Derivative hedging instruments (Notes C and E)                            239             296
Fuel stock                                                                 81              87
Materials and supplies                                                     63              63
Deferred income taxes                                                     111             102
Prepayments                                                               160             200
Assets held for sale (Note H)                                             191             200
Other                                                                      34              62
                                                                     --------        --------
Total current assets                                                    1,932           1,687
                                                                     --------        --------

Property, Plant and Equipment:
Property, plant and equipment                                           2,582           2,581
Less accumulated provision for depreciation                              (196)           (176)
                                                                     --------        --------
                                                                        2,386           2,405
Construction work in progress                                             606             454
                                                                     --------        --------
Total property, plant and equipment, net                                2,992           2,859
                                                                     --------        --------

Noncurrent Assets:
Notes receivable from affiliates                                          223             223
Goodwill, net of accumulated amortization
  of $78 and $57 for 2002 and 2001, respectively (Notes A and B)        1,599           1,377
Other intangible assets, net of accumulated amortization
  of $41 and $59 for 2002 and 2001, respectively (Notes A and B)          470             742
Assets from risk management activities (Note E)                            15               8
Derivative hedging instruments (Notes C and E)                            161              99
Other, less provision for uncollectibles of $50 and
  $43 for 2002 and 2001, respectively                                      40              42
                                                                     --------        --------
Total noncurrent assets                                                 2,508           2,491
                                                                     --------        --------
Total assets                                                         $  7,432        $  7,037
                                                                     ========        ========

</TABLE>




              The accompanying notes are an integral part of these
                     condensed consolidated balance sheets.

                                        4


<PAGE>

                 MIRANT AMERICAS GENERATION, LLC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                     At March 31,
                                                                         2002      At December 31,
LIABILITIES AND MEMBER'S EQUITY:                                     (Unaudited)        2001
                                                                    ------------  ----------------
Current Liabilities:                                                        (in millions)
<S>                                                                      <C>             <C>
Accounts payable                                                     $    151        $    122
Payable to affiliates                                                     131             160
Notes payable to affiliates                                               220             253
Liabilities from risk management activities (Note D)                       82             141
Derivative hedging instruments (Notes C and D)                            197             252
Revenues subject to refund (Note G)                                       273             243
Liabilities held for sale (Note H)                                         25             112
Other                                                                     112              50
                                                                     --------        --------
Total current liabilities                                               1,191           1,333
                                                                     --------        --------
Noncurrent Liabilities:
Notes payable                                                           2,567           2,567
Deferred income taxes                                                     168             142
Liabilities from risk management activities (Note D)                       16               9
Derivative hedging instruments (Notes C and D)                            101              54
Other                                                                       7               7
                                                                     --------        --------
Total noncurrent liabilities                                            2,859           2,779
                                                                     --------        --------
Commitments and Contingent Matters (Note G)

Member's Equity:
Member's interest                                                       3,446           2,969
Deferred contract with affiliate                                          (77)            (91)
Retained earnings                                                          62             108
Accumulated other comprehensive loss                                      (49)            (61)
                                                                     --------        --------
Total member's equity                                                   3,382           2,925
                                                                     --------        --------
Total liabilities and member's equity                                 $ 7,432        $  7,037
                                                                      =======        ========

</TABLE>






              The accompanying notes are an integral part of these
                     condensed consolidated balance sheets.

                                        5
<PAGE>
                MIRANT AMERICAS GENERATION, LLC AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                          Accumulated
                                                         Deferred                            Other
                                          Member's       Contract          Retained       Comprehensive     Comprehensive
                                          Interest     With Affiliate      Earnings           Loss             Income
                                        ------------- ---------------- --------------- ----------------- ------------------
                                                                         (in millions)
 <S>                                          <C>            <C>            <C>               <C>               <C>
Balance, December 31, 2001                 $ 2,969         $ (91)          $ 108            $ (61)
   Net income                                    -             -              88                -              $  88
   Other comprehensive income                    -             -               -               12                 12
                                                                                                               -----
   Comprehensive income                                                                                        $ 100
                                                                                                               =====
   Dividends                                     -             -            (134)               -
   Capital contributions                       514             -               -                -
   Deferred tax liability related to
       reclass of trading and marketing
       rights under SFAS No. 142               (37)            -               -                -
   Amortization of deferred contract
       with affiliate                            -            14               -                -
                                           -------         -----           -----            -----
Balance, March 31, 2002                    $ 3,446         $ (77)          $  62            $ (49)
                                           =======         =====           =====            =====


</TABLE>









        The accompanying notes are an integral part of these condensed
consolidated statements.

                                        6

<PAGE>
                MIRANT AMERICAS GENERATION, LLC AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                For the Three Months
                                                                   Ended March 31,
                                                                2002            2001
                                                               -------         -------
                                                                 (in millions)
Cash Flows from Operating Activities:
<S>                                                               <C>             <C>
Net income                                                     $    88         $    77
                                                               -------         -------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization                                       33              41
Risk management activities, net                                     (4)             (9)
Deferred income taxes                                                5            (117)
Deferred contract with affiliate                                    14               -
Restructuring charge                                                 3               -
Changes in certain assets and liabilities, excluding effects
 from acquisitions:
  Accounts receivable and receivables from affiliates, net          22            (256)
  Inventory                                                          4             (14)
  Other current assets                                              39              21
  Accounts payable and accrued liabilites                          (22)            214
  Accrued taxes                                                      8             141
  Other, net                                                         2              16
                                                               -------         -------
Total adjustments                                                  104              37
                                                               -------         -------
Net cash provided by operating activities                          192             114
                                                               -------         -------

Cash Flows from Investing Activities:
Capital expenditures                                               (78)            (99)
Cash from contribution of Mirant New England, LLC                    7               -
Repayments on notes receivable                                     128               -
Notes receivable from affiliates, net                             (246)            (15)
Property insurance proceeds                                          2               9
                                                               -------         -------
Net cash used in investing activities                             (187)           (105)
                                                               -------         -------
Cash Flows from Financing Activities:
Capital contributions                                               20               5
Payment of dividends                                              (134)            (21)
Proceeds from issuance of debt                                     200               -
Repayment of debt                                                 (200)              -
Proceeds from issuance of debt from affiliate                      128               -
Repayment of debt to affiliate                                     (32)              -
                                                               -------         -------
Net cash used in financing activities                              (18)            (16)
                                                               -------         -------
Net Decrease in Cash and Cash Equivalents                          (13)             (7)
Cash and Cash Equivalents, beginning of period                      15              83
                                                               -------         -------
Cash and Cash Equivalents, end of period                       $     2         $    76
                                                               =======         =======
Supplemental Cash Flow Disclosures:
Cash paid for interest, net of amounts capitalized             $     5         $    41
                                                               =======         =======
Cash paid for income taxes, net                                $     -         $    27
                                                               =======         =======
Noncash Financing Activities:
Capital contribution of Mirant New England, LLC                $   275         $     -
                                                               =======         =======

</TABLE>

The accompanying notes are an integral part of these condensed consolidated
statements.

                                        7
<PAGE>



                 MIRANT AMERICAS GENERATION, LLC AND SUBSIDARIES
       NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A.       Accounting and Reporting Policies

      Basis of Accounting. These unaudited condensed consolidated financial
statements should be read in conjunction with the Company's audited 2001
consolidated financial statements and the accompanying footnotes which are
contained in the Company's Form 10-K for the year ended December 31, 2001.
Management believes that the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, consisting of normal recurring
items, necessary for a fair statement of results for the interim periods
presented. Certain prior-year amounts have been reclassified to conform with
current-year financial statement presentation. The results for interim periods
are not necessarily indicative of the results for the entire year.

     Accounting Changes. In July 2001, the FASB issued SFAS No. 141, "Business
Combinations," ("SFAS No. 141") and SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS No. 142"). These pronouncements significantly change the
accounting for business combinations, goodwill and intangible assets. SFAS No.
141 establishes that all business combinations will be accounted for using the
purchase method; use of the pooling-of-interests method is no longer allowed.
The pronouncement further clarifies the criteria to recognize intangible assets
separately from goodwill. The provisions of SFAS No. 141 are effective for all
business combinations initiated after June 30, 2001. SFAS No. 142 addresses
financial accounting and reporting for acquired goodwill and other intangible
assets and, generally, adopts a non-amortization and periodic impairment
analysis approach to goodwill and indefinitely-lived intangibles. SFAS No. 142
is effective for the Company's 2002 fiscal year or for business combinations
initiated after June 30, 2001. Mirant Americas Generation adopted these
statements on January 1, 2002.

    Upon initial application of SFAS No. 141, Mirant Americas Generation
reassessed the classification of its intangible assets and determined that
trading rights resulting from business combinations did not meet the new
criteria for recognition apart from goodwill. On January 1, 2002, trading rights
related to business combinations were reclassified to goodwill as required by
the Statement. The reclassification resulted in increased goodwill of $194
million, net of accumulated amortization of $18 million.

    As a result of the adoption of SFAS No. 142, Mirant Americas Generation
discontinued amortization of goodwill effective January 1, 2002. During the
three months ended March 31, 2002, Mirant Americas Generation completed the
transitional impairment test required by SFAS No. 142 and did not record any
impairments of goodwill. Net income for the three months ended March 31, 2001
has been adjusted below to exclude amortization related to goodwill and trading
rights recognized in business combinations (in millions).

                                                               Net Income
                                                               ----------
        As reported.........................................     $ 77
        Effect of goodwill and trading rights amortization..       10
                                                                 ----
        As adjusted.........................................     $ 87
                                                                 ====

     In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," ("SFAS No. 144") which supersedes
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" and Accounting Principles Board Opinion No.
30 "Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." SFAS No. 144 amends accounting and reporting standards
for the disposal of segments of a business and addresses various issues related
to the accounting for impairments or disposals of long-lived assets. Mirant
Americas Generation adopted SFAS No. 144 January 1, 2002. Prior to SFAS No. 144,
the disposition of State Line would not have been classified as a discontinued

                                       8
<PAGE>

operation. Because SFAS No. 144 expanded the breadth of transactions subject to
discontinued operations classification, the disposition of State Line is now
required to be presented as a discontinued operation (Note H).


     In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS No. 143"). SFAS No. 143 addresses financial
accounting and reporting obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. The provisions of
SFAS No. 143 are effective for the Company's 2003 fiscal year. Mirant Americas
Generation has not yet determined the financial statement impact of this
pronouncement.

     Concentration of Revenues and Credit Risk. Under its agreements with Mirant
Americas Energy Marketing, the Company retains the ultimate credit risk from the
sales that Mirant Americas Energy Marketing engages in on its behalf. During the
three months ended March 31, 2002, approximately 35% of the Company's revenues
were attributable to sales in the California market, as compared to
approximately 65% for the same period in 2001.

     As of March 31, 2002, the DWR, Mirant, Mirant Americas, Inc. and Mirant
Potomac River, a direct wholly owned subsidiary of Mirant, owed Mirant Americas
Generation $245 million (includes accounts receivable and open contract
positions), $372 million, $255 million and $156 million, respectively, each
representing more than 10% of Mirant Americas Generation's total credit
exposure. The DWR exposure is not currently supported by the state of
California's credit and is subject to the risk that the California State
Legislature will not adequately appropriate funds to support the DWR's
obligations with respect to its contracts with Mirant Americas Generation. The
Company's total credit exposure is computed as total accounts and notes
receivable, adjusted for risk management and derivative hedging activities,
netted where appropriate.

    Capitalization of Interest Cost. Mirant Americas Generation capitalizes
interest on projects during the advanced stages of development and the
construction period, in accordance with SFAS No. 34, "Capitalization of Interest
Cost," as amended by SFAS No. 58, "Capitalization of Interest Cost in Financial
Statements That Include Investments Accounted for by the Equity Method." The
Company determines which debt instruments represent a reasonable measure of the
cost of financing construction assets in terms of interest cost incurred that
otherwise could have been avoided. These debt instruments and associated
interest cost are included in the calculation of the weighted average interest
rate used for determining the capitalization rate. Upon commencement of
commercial operations of the plant or project, capitalized interest, as a
component of the total cost of the plant, is amortized over the estimated useful
life of the plant. For the three months ended March 31, 2002 and 2001, the
Company incurred $71 million and $47 million, respectively, in interest costs,
of which $8 million and $4 million, respectively, were capitalized and included
in construction work in process. The remaining interest was expensed during the
period.

B.       Goodwill and Other Intangible Assets

    For the three months ended March 31, 2002, Mirant Americas Generation
acquired $31 million of goodwill, net of $3 million of accumulated amortization
when Mirant Americas transferred its ownership interest in Mirant New England to
Mirant Americas Generation. No goodwill was impaired or written off in this
period. As of March 31, 2002, Mirant Americas Generation's goodwill was $1.6
billion.

     All of Mirant Americas Generation's other intangible assets are subject to
amortization. The other intangible assets are being amortized on a straight-line
basis over the related useful lives, up to 40 years. On January 1, 2002 trading
rights related to business combinations were reclassified from other intangible
assets to goodwill. The reclassification decreased other intangible assets by
$227 million, net of accumulated amortization of $18 million. Other intangible
asset amortization expense for the three months ended March 31, 2002 was $8
million. The components of other intangible assets acquired as part of a
business combination or an asset acquisition as of March 31, 2002 and December
31, 2001 were as follows (in millions):

                                       9
<PAGE>

<TABLE>
<CAPTION>


                                      March 31, 2002                           December 31, 2001
                          ---------------------------------------    ------------------------------------
                            Gross Carrying       Accumulated          Gross Carrying      Accumulated
                                Amount           Amortization             Amount          Amortization
                          ------------------- -------------------    ------------------ -----------------
<S>                                      <C>                <C>                    <C>              <C>
Trading rights                         $ 207              $ (29)                 $ 453            $ (45)
Development rights                       159                 (6)                   199               (9)
Emissions allowances                     131                 (5)                   131                 -
Other intangibles                         14                 (1)                    18               (5)
                          ------------------- -------------------    ------------------ -----------------
Other intangible assets                $ 511              $ (41)                 $ 801            $ (59)
                          =================== ===================    ================== =================
</TABLE>

C.       Comprehensive Income/(Loss)

     Other comprehensive income/(loss) includes unrealized gains and losses on
certain derivatives that qualify as cash flow hedges. The effect of other
comprehensive income is set forth in the accompanying unaudited condensed
consolidated statement of member's equity.

     Components of accumulated other comprehensive income (loss) consisted of
the following, net of tax (in millions):


    Balance, December 31, 2001.....................................     $  (61)

    Other comprehensive income for the period:
      Change in fair value of derivative instruments, net of tax
            effect of $(12)........................................     50
      Reclassification to earnings, net of tax effect of $11........   (38)
    Other comprehensive income......................................        12
                                                                        ------
    Balance, March 31, 2002.........................................    $  (49)
                                                                        ======

     The $49 million balance of other comprehensive loss at March 31, 2002
includes the impact of $128 million of interest rate swap breakage costs and $79
million of gains on commodity price hedges.

     Mirant Americas Generation estimates that $41 million ($52 million of
commodity hedge gains and $11 million of interest rate hedging losses) of net
derivative after-tax gains included in OCI as of March 31, 2002 will be
reclassified from OCI into earnings or otherwise settled within the next twelve
months as certain forecasted transactions relating to commodity contracts and
interest payments are realized.

D.   Debt

     As of March 31, 2002, Mirant Americas Generation had two credit facilities,
each entered into in October 1999, which consisted of a $250 million 5-year
revolving credit agreement ("Credit Facility B") for capital expenditures and
general corporate purposes and a $50 million 5-year revolving credit facility
("Credit Facility C") for working capital needs. The commitments under Credit
Facility B and Credit Facility C remain available through October 2004. As of
March 31, 2002, the outstanding borrowings under Credit Facility B were $73
million. As of March 31, 2002, there were no borrowings under Credit Facility C.

     In addition to other covenants and terms, each of Mirant Americas
Generation's credit facilities includes minimum debt service coverage, a maximum
leverage covenant and a minimum debt service coverage test for dividends and
distributions. As of March 31, 2002, there were no events of default under such
credit facilities.

E.       Financial Instruments

Derivative Hedging Instruments

     Mirant Americas Generation uses derivative instruments to manage exposures
arising from changes in commodity prices and interest rates. Mirant Americas

                                       10
<PAGE>

Generation's objective for holding derivative instruments are to minimize risks
using the most effective methods to eliminate or reduce the impacts of these
exposures.

     Derivative gains and losses arising from cash flow hedges that are included
in OCI are reclassified into earnings in the same period as the settlement of
the underlying transaction. During the three months ended March 31, 2002, $53
million of net pre-tax derivative gains were reclassified to operating income
and $4 million of pre-tax losses were reclassified to interest expense. The
derivative gains and losses reclassified to earnings, combined with the
settlement of the underlying physical transactions together represent the
Company's net commodity revenues and costs. Under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133"), transactions
may meet the requirements for hedge treatment, but may be less than 100%
effective. For example, a derivative instrument specifying one location may be
used to hedge a risk at a nearby, but different, geographic location. The price
differential between the two locations is considered the ineffective portion of
the hedge. Any changes in the fair value of the ineffective portion must be
recorded currently in earnings. During the three months ended March 31, 2002,
gains or losses arising from hedge ineffectiveness were immaterial. At March 31,
2002, the maximum term over which the Company is hedging exposures to the
variability of cash flows is through 2010.

Commodity Price Hedging

     Mirant Americas Generation enters into commodity financial instruments and
other contracts in order to hedge its exposure to market prices for electricity
expected to be produced by its generation assets. These contracts are primarily
physical forward sales but may also include options and other financial
instruments. Mirant Americas Generation also uses commodity financial
instruments and other contracts to hedge its exposure to market prices for
natural gas, coal and other fuels expected to be utilized by its generation
assets. These contracts primarily include futures, options and swaps. Where
these contracts are derivatives and are designated as cash flow hedges, the
gains and losses are deferred in OCI until the period that they were being used
to hedge. The gains and losses are then recognized in earnings in the same
period as the settlement of the underlying physical transaction.

     At March 31, 2002, Mirant Americas Generation had a net derivative hedging
asset of approximately $102 million. The fair value of the Company's commodity
derivative hedging instruments is determined using various factors, including
closing exchange or over-the-counter market price quotations, time value and
volatility factors underlying options and contractual commitments.

     At March 31, 2002, these contracts related to periods through 2006. The net
notional amount, or net open position, of the commodity price management assets
and liabilities at March 31, 2002 was 2 million equivalent megawatt-hours. The
notional amount is indicative only of the volume of activity and not of the
amount exchanged by the parties to the financial instruments. Consequently,
these amounts are not a measure of market risk.

    Power sales agreements and other contracts that are used to mitigate
exposure to commodity prices but which do not meet the definition of a
derivative under SFAS No. 133 are not included in hedging instruments on the
unaudited condensed consolidated balance sheet.

Interest Rate Hedging

     Mirant Americas Generation's policy is to manage interest expense using a
combination of fixed- and variable-rate debt. To manage this mix in a
cost-efficient manner, Mirant Americas Generation has entered into interest rate
swaps in which it agrees to exchange, at specified intervals, the difference
between fixed and variable interest amounts calculated by reference to
agreed-upon notional amounts. These swaps are designated to hedge underlying

                                       11
<PAGE>

debt obligations. For qualifying hedges, the changes in the fair value of gains
and losses of the swaps are deferred in OCI, net of tax, and the interest rate
differential is reclassified from OCI to interest expense as an adjustment over
the life of the swaps. Gains and losses resulting from the termination of
qualifying hedges prior to their stated maturities are recognized ratably over
the remaining life of the hedged instruments. At March 31, 2002, the Company was
not a party to any interest rate swaps.

Risk Management Activities

     Certain financial instruments that Mirant Americas Generation uses to
manage risk exposure to energy prices do not meet the hedge criteria under SFAS
No. 133. Therefore, the fair values of these financial instruments are included
in risk management assets and liabilities in the accompanying unaudited
condensed consolidated balance sheet.

     At March 31, 2002, the Company had contracts that related to periods
through 2010. The net notional amount, or net open position, of the risk
management assets and liabilities at March 31, 2002 was approximately 1 million
equivalent megawatt-hours. The net notional amount is indicative only of the
volume of activity and not of the amount exchanged by the parties to the
financial instruments. Consequently, these amounts are not a measure of market
risk.

    The fair values of Mirant Americas Generation's risk management assets and
liabilities as of March 31, 2002 are included in the following table (in
millions).

                                                          Risk Management
                                                   ----------------------------
                                                      Assets      Liabilities
          Energy commodity instruments:
          Electricity............................           $24       $ 19
          Natural gas............................            55         74
          Oil....................................             6          5
          Other..................................             1         --
                                                   ------------- --------------
          Total..................................           $86      $  98
                                                   ============= ==============

F.    Business Developments and Related Party Transactions

Power Sales, Fuel Supply and Services Arrangements

      During the three months ended March 31, 2002, the Company incurred
approximately $5 million in costs under the arrangements it had with Mirant
Americas Energy Marketing as compared to $4 million for the same period in 2001.
These costs are included in selling, general and administrative expenses in the
accompanying unaudited condensed consolidated statements of income.

Mirant Mid-Atlantic Sales Agreement

      Under the terms of Mirant Mid-Atlantic's fixed rate power purchase
agreement (the ECSA) with Mirant Americas Energy Marketing, Mirant Mid-Atlantic
supplies all capacity and energy of its facilities to Mirant Americas Energy
Marketing for the period from August 1, 2001 through June 30, 2004, extendable
through December 31, 2004 at Mirant Americas Energy Marketing's option. For
2002, Mirant Americas Energy Marketing has elected to keep its committed
capacity and energy purchases at 100% of the total output of the Company's
facilities. For 2003 and 2004, Mirant Americas Energy Marketing has the option
to purchase up to 100% (in blocks of 25%) of the total output of Mirant
Mid-Atlantic's facilities, with no minimum commitment. Mirant Mid-Atlantic's
affiliated companies, Mirant Potomac River and Mirant Peaker, have also entered
into fixed rate power purchase agreements with Mirant Americas Energy Marketing,
on the same terms and effective over the same period as the agreement outlined
above. Through the capital contribution agreement between Mirant Mid-Atlantic
and Mirant, the cash available from these affiliated companies is paid as a
dividend to Mirant, which in turn makes an indirect capital contribution to
Mirant Mid-Atlantic for the same amount.

     At the inception date of the ECSA, the pricing of Mirant Americas Energy
Marketing's minimum committed capacity and energy purchases over the term of the

                                       12
<PAGE>

agreements was favorable to the Company and its affiliates when compared to
projected market rates in the PJM. At inception, the total value to the Company
and its affiliates was approximately $167 million. The amount related
specifically to the Mirant Mid-Atlantic owned or leased facilities amounted to
$120 million and was reflected as both an addition to members' equity and an
offsetting contra equity account on the Company's consolidated balance sheet and
statement of member's equity at the inception of the agreements.

     Mirant Mid-Atlantic will reduce future operating revenue recognized under
these agreements by the remaining favorable pricing variance of $70 million, at
March 31, 2002, through the end of 2002, based on the proportion of volume
delivered to the expected minimum delivery over the remaining period. The total
amount of operating revenue reductions for the three months ended March 31, 2002
was $17 million. The contra equity amount is reduced as cash is received from
Mirant Americas Energy Marketing over the contract term, with cash being
received in the month following the reduction to operating revenue. The total
amount of cash received, attributable to the favorable variance, during the
three months ended March 31, 2002 amounted to $14 million.

Contribution of Mirant New England to Mirant Americas Generation

     Effective, January 1, 2002, Mirant Americas transferred its ownership
interest in Mirant New England (a wholly owned subsidiary of Mirant Americas) to
Mirant Americas Generation. The transfer was accounted for as a non-cash capital
contribution of approximately $275 million to Mirant Americas Generation in
2002. This capital contribution is reflected in the accompanying unaudited
condensed consolidated financial statements.

Capital Contribution of Notes Payable to Affiliate

     During the three months ended March 31, 2002, Mirant Americas made capital
contributions of notes payable by certain operating subsidiaries of the Company
in the aggregate amount of $224 million to the Company and the Company, in turn,
made subsequent capital contributions to the borrowing operating subsidiaries of
respective notes payable by such operating subsidiaries. These capital
contributions are reflected in the accompanying unaudited condensed consolidated
financial statements.

Sale of State Line

     In February 2002, Mirant announced that it had entered into an agreement to
sell its State Line generating facility for $182 million plus an adjustment for
working capital. The sale is expected to close in the second quarter of 2002.

Restructuring Charge

     As a result of changing market conditions including constrained access to
capital markets, the Enron bankruptcy and Moody's downgrade of Mirant's credit
rating, Mirant adopted a plan to restructure its operations by exiting certain
business operations, canceling and suspending planned power plant developments,
closing business development offices and severing employees. In the first
quarter of 2002, the Company recorded a restructuring charge of $3 million
(pre-tax).


G.   Commitments and Contingent Matters

Litigation and Other Contingencies

     With respect to each of the following matters, the Company cannot currently
determine the outcome of the proceedings or the outcome of any potential losses
from such proceedings.

Western Power Markets Investigations: The CPUC, the California Senate, the San
Joaquin District Attorney and the Attorney General's offices of Washington,

                                       13
<PAGE>

Oregon and California have each launched civil and criminal investigations into
the California energy markets that have resulted in the issuance of subpoenas of
several of Mirant Americas Generation's entities. In addition, the CPUC has had
personnel onsite on a periodic basis at Mirant's California generating
facilities since December 2000. Each of these subpoenas, as well as the plant
visits, could impose significant compliance costs on Mirant Americas Generation.
Despite the various measures taken to protect the confidentiality of sensitive
information provided to these agencies, there remains a risk of governmental
disclosure of the confidential, proprietary and trade secret information
obtained by these agencies throughout this process. In January 2002, the
California Attorney General's office reportedly stated that it found no evidence
of criminal wrongdoing in connection with its investigation, but that it was
planning to file civil suits against the energy generators for unfair trade
practices.

California Attorney General Litigation: On March 11, 2002, the California
Attorney General filed a civil suit against Mirant and several of its wholly
owned subsidiaries (including Mirant Americas Generation entities) in San
Francisco Superior Court. The lawsuit alleges that between 1998 and 2001 the
companies effectively double-sold their capacity by selling both ancillary
services and energy from the same generating units, such that if called upon,
the companies would have been unable to perform its contingent obligations under
the ancillary services contracts. The California Attorney general claims that
this alleged behavior violated both the tariff of the California Independent
System Operator and, more importantly, California's unfair trade practices
statutes. The suit seeks both restitution and penalties in unspecified amounts.

     On March 19, 2002, the California Attorney General filed a complaint with
the FERC against certain California generators, including Mirant and several of
its wholly owned subsidiaries (including Mirant Americas Generation entities),
alleging that market-based sales of energy made by such generators were in
violation of the Federal Power Act because such transactions were not
appropriately filed with the FERC. The complaint requests, among other things,
refunds for any prior short-term sales of energy that are found to not be just
and reasonable along with interest of any such refunded amounts.

Defaults by SCE, and Pacific Gas and Electric, and the Bankruptcies of Pacific
Gas and Electric and the PX: On January 16 and 17, 2001, the credit and debt
ratings of SCE and Pacific Gas and Electric were lowered by Moody's and Standard
& Poor's ("S&P") to "junk" status. On January 16, 2001, SCE suspended
indefinitely certain payment obligations to the PX and to the CAISO. Pacific Gas
and Electric similarly suspended payments. The failure of SCE and Pacific Gas
and Electric to make these payments prevented the PX and CAISO from making
payments to Mirant Americas Generation. As of March 31, 2002, the total amount
owed to Mirant Americas Generation by the CAISO and the PX as a result of these
defaults was $305 million. During 2000 and 2001, Mirant Americas Generation took
provisions in relation to these and other uncertainties arising from the
California power markets of $229 million pre-tax.

     On March 9, 2001, as a result of the nonpayments of SCE and Pacific Gas and
Electric, the California PX ceased operation and filed for bankruptcy
protection. Mirant Americas Energy Marketing was appointed as a member of the
official Participants Committee in the PX bankruptcy proceeding. The PX's
ability to repay its debt is directly dependent on the extent to which it
receives payment from Pacific Gas and Electric and SCE and on the outcome of its
litigation with the California State government.

    On April 6, 2001, Pacific Gas and Electric filed a voluntary petition under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of California in San Francisco. It is not known at this time
what effect the bankruptcy filing will have on the ultimate recovery of amounts
owed to Mirant Americas Generation. On September 20, 2001, Pacific Gas and
Electric filed a proposed plan of reorganization. Under the terms of the
proposed plan, unsecured creditors such as Mirant Americas Generation would
receive, through a combination of cash and negotiable debt, 100% of the amounts
owed upon approval of the plan.

    On March 1, 2002, SCE paid approximately $870 million to the California PX
in satisfaction of all claims of or through the California PX and the CAISO

                                       14
<PAGE>

through approximately January 18, 2001. The PX is not expected to make any
payment to Mirant Americas Generation until the bankruptcy judge so orders. The
Company cannot now determine the timing of such payment or the extent to which
such payment would satisfy its claims.

Reliability-Must-Run Agreements: Mirant Americas Generation's subsidiaries
acquired generation assets from Pacific Gas and Electric in April 1999, subject
to reliability-must-run RMR agreements. These agreements allow the CAISO, under
certain conditions, to require certain of Mirant Americas Generation's
subsidiaries to run the acquired generation assets in order to support the
reliability of the California electric transmission system. Mirant Americas
Generation assumed these agreements from Pacific Gas and Electric prior to the
outcome of a FERC proceeding initiated in October 1997 that will determine the
percentage of a $158.8 million annual fixed revenue requirement to be paid to
Mirant Americas Generation by the CAISO under the RMR agreements. This revenue
requirement was negotiated as part of a prior settlement of a FERC rate
proceeding. Mirant Americas Generation contends that the amount paid by the
CAISO should reflect an allocation based on the CAISO's right to call on the
units (as defined by the RMR agreements) and the CAISO's actual calls. This
approach would result in annual payments by the CAISO of approximately $120
million, or 75% of the settled fixed revenue requirement. The decision in this
case will affect the amount the CAISO will pay to Mirant Americas Generation for
the period from June 1, 1999 through the final disposition of the appeal. On
June 7, 2000, the administrative law judge ("ALJ") presiding over the proceeding
issued an initial decision in which responsibility for payment of approximately
3% of the revenue requirement was allocated to the CAISO. On July 7, 2000,
Mirant Americas Generation appealed the ALJ's decision to the FERC.

     If Mirant Americas Generation is unsuccessful in its appeal of the ALJ's
decision, it will be required to refund certain amounts of the revenue
requirement paid by the CAISO for the period from June 1, 1999 until the final
disposition of the appeal. The amount of this refund as of March 31, 2002 would
have been approximately $240 million; however, there would have been no effect
on net income for the periods under review as adequate reserves have been
recorded. This amount does not include interest that may be payable in the event
of a refund. If Mirant Americas Generation is unsuccessful in its appeal, Mirant
Americas Generation plans to pursue other options available under the RMR
agreements to mitigate the impact of the ALJ's decision upon its future
operations.

Western Power Markets Price Mitigation and Refund Proceedings: On June 19, 2001,
the FERC issued an order that provides for price mitigation in all hours in
which power reserves fall below 7%. During these emergency hours, FERC will use
a formula based on the marginal costs of the highest cost generator called on to
run to determine the overall market clearing price. This price mitigation
includes all spot market sales in markets throughout the Western System
Coordinating Council. This price mitigation was implemented on June 20, 2001 and
is currently in place until September 30, 2002. The FERC requires that all
public and non-public utilities which own or control non-hydroelectric
generation in California must offer power in the CAISO's spot markets, to the
extent the output is not scheduled for delivery in the hour.

     On July 25, 2001, the FERC issued an order requiring hearings to determine
the amount of any refunds and amounts owed for sales made to the CAISO/PX from
October 1, 2000 through June 20, 2001. A hearing was held in March 2002 and a
second hearing is scheduled to be held in August 2002. In the July 25 order, the
FERC also ordered that a preliminary evidentiary proceeding be held to develop a
factual record on whether there have been unjust and unreasonable charges for
spot market bilateral sales in the Pacific Northwest from December 25, 2000
through June 20, 2001. In the proceeding, the DWR filed to recover certain
refunds from parties, including one of Mirant Americas Generation's
subsidiaries, for bilateral sales of electricity to the DWR at the
California/Oregon border, claiming that such sales took place in the Pacific
Northwest. A FERC ALJ concluded a preliminary evidentiary hearing related to
possible refunds for power sales in the Pacific Northwest. In a preliminary
ruling issued September 24, 2001, the ALJ indicated that she would order no
refunds because the complainants had failed to prove any exercise of market

                                       15
<PAGE>

power or that any prices were unjust or unreasonable. The FERC may accept or
reject this preliminary ruling and the FERC's decision may itself be appealed.
The Company cannot predict the outcome of this proceeding. If it were required
to refund such amounts, Mirant Americas Generation's subsidiaries would be
required to refund amounts previously received pursuant to sales made on their
behalf. In addition, Mirant Americas Generation's subsidiaries would be owed
amounts for purchases made on their behalf from other sellers in the Pacific
Northwest.

     Additionally, on February 13, 2002, the FERC directed its staff to
undertake a fact-finding investigation into whether any entity manipulated
short-term prices in electric energy or natural gas markets in the West or
otherwise exercised undue influence over wholesale prices in the West, for the
period January 1, 2000 forward. The Company cannot predict the outcome of this
proceeding. Information from this investigation could be used in any existing or
future complaints before the FERC involving long-term power sales contracts
relevant to the matters being investigated.

DWR Power Purchases: On January 17, 2001, the Governor of California issued an
emergency proclamation giving the DWR authority to enter into arrangements to
purchase power in order to mitigate the effects of electrical shortages in the
state. The DWR began purchasing power under that authority the next day. On
February 1, 2001, the Governor of California signed Assembly Bill No. 1X
authorizing the DWR to purchase power in the wholesale markets to supply retail
consumers in California on a long-term basis. The Bill became effective
immediately upon its execution by the Governor. The Bill did not, however,
address the payment of amounts owed for power previously supplied to the CAISO
or PX for purchase by SCE and Pacific Gas and Electric. The CAISO and PX have
not paid the full amounts owed to Mirant Americas Generation's subsidiaries for
power delivered to the CAISO and PX in prior months and are expected to pay less
than the full amount owed on further obligations coming due in the future for
power provided to the CAISO for sales that were not arranged by the DWR. The
ability of the DWR to make future payments is subject to the DWR having a
continued source of funding, whether from legislative or other emergency
appropriations, from a bond issuance or from amounts collected from SCE and
Pacific Gas and Electric for deliveries to their customers. On May 24, 2001,
Mirant entered into a 19-month agreement with the DWR to provide the State of
California with approximately 500 MW of electricity. Mirant Americas Generation
bears the risk of non-payment by the CAISO, the California Power Exchange or the
DWR.

     On February 25, 2002, the CPUC and the California Electricity Oversight
Board ("EOB") filed separate complaints at FERC against certain sellers of
energy under long-term agreements with the California DWR, including Mirant
Americas Generation, alleging that the terms of these contracts are unjust and
unreasonable and that the contracts should be abrogated or the prices under the
contracts should be reduced. In particular, the EOB claims that the contracts
should be voidable at the option of the State of California. The complaints
allege that the DWR was forced to enter into these long-term contracts due to
dysfunctions in the California market and the alleged market power of the
sellers. The Company's contract with the DWR runs through December 31, 2002.

California Rate Payer Litigation: Six lawsuits have been filed and coordinated
in the Superior Court for San Diego County alleging that certain owners of
electric generation facilities in California and energy marketers, including
Mirant, Mirant Americas Energy Marketing, Mirant Delta and Mirant Potrero,
engaged in various unlawful and anti-competitive acts that served to manipulate
wholesale power markets and inflate wholesale electricity prices in California.
Three of the suits seek class action status, while two of the suits are brought
on behalf of all citizens of California. One lawsuit alleges that, as a result
of the defendants' conduct, customers paid approximately $4 billion more for
electricity than they otherwise would have and seeks an award of treble damages
as well as other injunctive and equitable relief. One lawsuit also names certain
of Mirant's officers individually as defendants and alleges that the state had
to spend more than $6 billion purchasing electricity and that if an injunction
is not issued, the state will be required to spend more than $150 million per
day purchasing electricity. The other suits likewise seek treble damages and
equitable relief. One such suit names Mirant Corporation itself as a defendant.

                                       16
<PAGE>

A listing of the cases is as follows:
<TABLE>
<CAPTION>

            <S>                                   <C>                                   <C>
          CAPTION                            DATE FILED                        COURT OF ORIGINAL FILING
     -----------------------------------   -----------------    ----------------------------------------------------
     People of the State of California      January 18, 2001    Superior Court of California - San Francisco County
       v. Dynegy, et al.
     Gordon v. Reliant Energy, Inc., et    November 27, 2000    Superior Court of California - San Diego County
       al.
     Hendricks v. Dynegy Power             November 29, 2000    Superior Court of California - San Diego County
       Marketing, Inc., et al.
     Sweetwater Authority, et al. V.        January 16, 2001    Superior Court of California - San Diego County
       Dynegy, Inc., et al.
     Pier 23 Restaurant v. PG&E Energy      January 24, 2001    Superior Court of California - San Francisco County
       Trading, et al.
     Bustamante, et al. v. Dynegy,            May 2, 2001       Superior Court of California - Los Angeles County
       Inc., et al.
</TABLE>

Enron Bankruptcy Proceedings: On December 2, 2001, Enron, along with several of
its subsidiaries, filed for bankruptcy. As of March 31, 2002, the total amount
owed to Mirant Americas Generation by Enron was approximately $50 million. Based
on a reserve recorded in 2001, the Company does not expect the outcome of the
bankruptcy proceeding to have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.

State Line: On July 28, 1998, an explosion occurred at the Company's State Line
plant causing a fire and substantial damage to the plant. The precise cause of
the explosion and fire has not been determined. Thus far, seven personal injury
lawsuits have been filed against Mirant Americas Generation, five of which were
filed in Cook County, Illinois. Mirant Americas Generation has settled the claim
of one of these plaintiffs, but the settlement agreement still requires court
approval. Mirant Americas Generation filed a motion to dismiss the five Cook
County cases in 1998 for lack of "in personam" jurisdiction and is in the
process of appealing the denial of these motions. The outcome of these
proceedings cannot now be determined and an estimated range of loss cannot be
made; however, the Company has significant insurance coverage for losses
occurring as a result of the explosion.

PEPCO Asbestos Litigation: On December 19, 2000, Mirant, through its
subsidiaries and together with lessors in a lease transaction, purchased from
PEPCO four electric generation facilities in the Washington D.C. area. As a part
of the purchase, and with certain qualifications, Mirant agreed to indemnify
PEPCO for certain liabilities arising in connection with personal injury
lawsuits filed after December 19, 2000, even if PEPCO's exposure arose prior to
that date. Since the acquisition, PEPCO has notified Mirant of approximately 30
asbestos cases, distributed among three Maryland jurisdictions (Prince George's
County, Baltimore City and Baltimore County), as to which it claims a right of
indemnity. In each of these claims, PEPCO's liability is primarily grounded on
the theory of premises liability. Each plaintiff seeks a multi-million dollar
award. It is expected that additional such lawsuits will be filed in the future,
however, the number of such additional lawsuits cannot now be determined. Mirant
Americas Generation believes that substantial defenses to liability exist and
that, even if found liable, plaintiffs' damage claims are greatly exaggerated.
Based on information and relevant circumstances known at this time, the Company
does not believe these suits will have a material adverse effect on its
financial position. An unfavorable decision, however, could have a material
adverse effect on results of operations in the particular year in which a
decision is rendered.

Environmental Information Requests: Along with several other electric generators
which own facilities in New York, in October 1999 Mirant New York received an
information request from the state of New York concerning the air quality
control implications of various repairs and maintenance activities of Mirant New
York at its Lovett facility. Mirant New York responded fully to this request and
provided all of the information requested by the state. The state of New York
issued notices of violation to some of the utilities being investigated. The
state issued a notice of violation to the previous owner of the Lovett facility,
Orange and Rockland Utilities, alleging violations associated with the operation
of Lovett facility prior to the acquisition of the plant by Mirant New York. To


                                       17
<PAGE>

date, Mirant New York has not received a notice of violation. Mirant New York
disagrees with the allegations of violations in the notice of violation issued
to the previous owner. The notice of violation does not specify corrective
actions which the state of New York may require. Under the sales agreement with
Orange and Rockland Utilities for Lovett facility, Orange and Rockland Utilities
is responsible for fines and penalties arising from historical operations, but
Mirant New York may be responsible for the cost of purchasing and installing
emission control equipment, the cost of which may be material. Mirant New York
is engaged in discussions with the state to explore a resolution of this matter.

     In January 2001, EPA, Region 3 issued a request for information to Mirant
Mid-Atlantic concerning the air permitting implications of past repair and
maintenance activities at its Chalk Point, Dickerson and Morgantown plants in
Maryland. Mirant Mid-Atlantic has responded fully to this request.

New York Property Tax: On January 29, 2002, Mirant New York won a favorable
judgement against the Town of Haverstraw, New York and the Haverstraw Stoney
Point School District with regards to the Town's and School District's failure
to perform under a previously agreed to property tax agreement. Under the terms
of the judgement, Mirant New York is entitled to receive approximately $32
million from the Town and the School District related to over assessed property
taxes. The judgement has been appealed by both the Town and the School District.
The Company believes it will ultimately prevail in this matter; however, due to
the uncertainty related to the ultimate outcome of this matter, the Company has
not recorded the potential income in the accompanying condensed consolidated
financial statements.

Power Marketing and Fuel Supply Agreements

     The Company, through its subsidiaries, is a party to four separate power
marketing and fuel purchase arrangements with Mirant Americas Energy Marketing.
Mirant Americas Energy Marketing is responsible for marketing and scheduling the
majority of the capacity from the Company's Mid-Atlantic, New York, California
and New England facilities. Mirant Americas Energy Marketing has no minimum
purchase requirements under these agreements. Additionally, the Company has
entered into a fuel supply agreement with an independent third party to provide
a minimum of 90% of the coal burned at one of the New York facilities through
2007. The Company has entered into a related transportation agreement for that
coal through March of 2004. Substantially all of the Company's fuel requirements
are fulfilled through these five agreements.

     This supplier and customer concentration could adversely affect the
Company's financial position or results of operations should these parties
default under the provisions of the agreements.

Construction Related Commitments

     The Company has entered into various turbine and other construction related
commitments related to brownfield developments at its various generation
facility sites. At March 31, 2002, these construction related commitments
totaled approximately $320 million.

Long-Term Service Agreements

     The Company has entered into long-term service agreements for the
maintenance and repair of certain of its combustion-turbines for combine-cycle
generating plants which are in effect through 2016. As of March 31, 2002, the
total estimated commitment under these agreements was approximately $180
million.

Fuel Commitments

     Mirant Americas Generation has commitments under fuel purchase and
transportation agreements totaling $116 million at March 31, 2002. These
agreements will continue to be in effect through 2007.

Operating Leases

     The Company has commitments under operating leases with various terms and
expiration dates. Expenses associated with these commitments totaled
approximately $25 million for each of the three month periods ended March 31,
2002 and 2001.

                                       18
<PAGE>

     On December 19, 2000, in conjunction with the purchase of the PEPCO assets,
Mirant Americas Generation, through Mirant Mid-Atlantic, entered into a
sale/leaseback transaction for $1.5 billion relating to the Dickerson and
Morgantown baseload units and associated property. The term of each operating
lease varies between 28.5 and 33.75 years. The total notional minimum lease
payments for the remaining life of the leases as of March 31, 2002 are
approximately $2.9 billion.

H.  State Line (Discontinued Operations)

     In February 2002, the Company entered into an agreement to sell its State
Line generating facility for $182 million plus an adjustment for working
capital. This asset is expected to be sold at book value based on the value of
the asset at the date of sale. The sale is expected to close in the second
quarter of 2002.

     Mirant Americas Generation's results of operations from State Line for the
three months ended March 31, 2002 and 2001 were as follows (in millions):

                                                          For The Three Months
                                                             Ended March 31,
                                                       -------------------------
                                                               2002         2001
                                                               ----         ----
    Revenue.................................................    $15         $14
    Expense.................................................      9           4
    Impairment loss.........................................      2           0
                                                                ---         ---
    Pre-tax income.........................................       4          10
    Taxes..................................................       2           4
                                                                ---         ---
    Net income.............................................     $ 2         $ 6
                                                                ===         ===

The table below presents the components of State Line's balance sheet accounts
classified as current assets and liabilities held for sale as of March 31, 2002
and December 31, 2001 (in millions):

                                                     March 31,      December 31,
                                                        2002           2001
                                                    -----------     ------------
          Current Assets:
          Accounts and notes receivable........           $ 5           $  12
          Inventory............................             3               4
          Other......................                       1               0
          Property, plant and equipment........           173             175
          Intangibles..........................             9               9
                                                     --------           -----
             Total current assets held for sale      $    191           $ 200
                                                     ========           =====
          Current Liabilities:
          Taxes and other payables.............      $     10           $  17
          Deferred taxes.......................            15              15
          Other long-term debt.................            --              80
                                                     --------           -----
             Total current liabilities held for
             sale..............................      $     25           $ 112
                                                     ========           =====
I.   Subsequent Events

Western United States Power Markets

    On April 9, 2002, the California Attorney General filed a second civil suit
against Mirant and several of its wholly owned subsidiaries (including Mirant
Americas Generation entities) in San Francisco Superior Court. The lawsuit
alleges that the companies violated the California Unfair Competition Act by
failing to properly file its rates, prices, and charges with the Federal Energy
Regulatory Commission as required by the Federal Power Act, and by charging
unjust and unreasonable prices in violation of the Federal Power Act. The
complaint seeks unspecified penalties, costs and attorney fees.

    On April 15, 2002, the California Attorney General filed, in the U.S.
District Court for the Northern District of California, a third civil lawsuit
against Mirant and several of its wholly owned subsidiaries (including Mirant

                                       19
<PAGE>

Americas Generation entities). The lawsuit alleges that the Company's
acquisition and possession of its Potrero and Delta power plants has, and will
continue to, substantially lessen competition, all in violation of the Clayton
Act and state unfair trade statutes. The lawsuit seeks equitable remedies in the
form of divestiture of the plants and injunctive relief, as well as monetary
damages in unspecified amounts to include disgorgement of profits, restitution,
treble damages, statutory civil penalties, and attorney fees.

California Rate Payer Litigation:

     On April 23, 2002, a class action law suit was filed on behalf of all
customers of electricity distributed into California by the defendants (other
than the defendants and their affiliates) by T&E Pastorino Nursery and Pastorino
& Son Nursery against several California generators, including Mirant and
several of its subsidiaries (including Mirant Americas Generation entities), in
the Superior Court for the County of San Mateo, California. The suit is related
to events in the California wholesale electricity market occurring over the last
three years. The suit alleges that the defendants violated the state unfair
trade practices statutes by engaging in unfair, unlawful and deceptive practices
and by acquiring generating plants in California that allowed them to exercise
market power to withhold capacity and raise prices above competitive levels. The
plaintiffs seek restitution, injunctive relief and unspecified compensatory and
general damages.

    With respect to each of these lawsuits, the Company cannot currently
determine the outcome of the proceedings or the amounts of any potential losses
from such proceedings.

New England Guarantee

     In April 2002, Mirant Corporation issued a guarantee in the amount of $188
million for any obligations Mirant New England may incur under its Wholesale
Transition Service Agreement with Cambridge Electric Light Company and
Commonwealth Electric Company. Under the agreement, Mirant New England is
required to sell electricity at fixed prices to Cambridge and Commonwealth in
order for them to meet their supply requirements to certain retail customers.
Both the guarantee and the agreement expire in February 2005.

Fuel Purchase Agreement

    In April 2002, Mirant Mid-Atlantic entered into a long-term fuel purchase
agreement. The fuel supplier will convert coal feedstock received at the
Company's Morgantown facility into a synthetic fuel. Under the terms of the
agreement, Mirant Mid-Atlantic will purchase a minimum of 2.4 million tons of
fuel per annum through December 2007. This minimum purchase commitment will
become effective upon the commencement of the synthetic fuel plant operation at
the Morgantown facility, currently expected to be June 2002. The purchase price
of the fuel will vary with the delivered cost of the coal feedstock. Based on
current coal prices it is expected that the annual purchase commitment will be
approximately $100 million.

Power Sales, Fuel Supply and Services Arrangements

     Effective April 1, 2002, Mirant Americas Generation's operating
subsidiaries, except Mirant Mid-Atlantic, entered into new power sales, fuel
supply and services agreements with Mirant Americas Energy Marketing. The terms
of these new agreements are similar to the terms under the agreements in effect
during 2001 and the first quarter of 2002; however, the new agreements do not
contain any revenue sharing arrangements. Under the new agreements, the various
operating subsidiaries of Mirant Americas Generation, except for Mirant
Mid-Atlantic, will pay Mirant Americas Energy Marketing a fixed administrative
fee of approximately $10 million for the period from April 1, 2002 through
December 31, 2002. The new agreements expire December 31, 2002.

                                       20
<PAGE>


                 MIRANT AMERICAS GENERATION, LLC AND SUBSIDARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION


Overview

     We are an indirect wholly owned subsidiary of Mirant, formed on May 12,
1999, for the purpose of financing, acquiring, owning, operating and maintaining
our electric power generating facilities and any others that we may acquire. We
currently own or control approximately 12,500 MW of electricity generation
capacity, all of which is located in the United States.

     Our generating facilities were either recently acquired in competitive
auctions or were developed as greenfield construction projects. Our
geographically diversified portfolio of generating assets utilizes a variety of
technologies, fuel types and fuel sources and sells its output directly or
through Mirant Americas Energy Marketing. Our customers are located near key
metropolitan load centers of the United States.

     Our operating revenues and expenses are primarily driven by the operations
of our controlled subsidiaries, which are consolidated for accounting purposes.
We expect substantially all of our revenues to be derived from sales of
capacity, energy and ancillary services from our generating facilities into spot
and forward markets and through bilateral contracts. The market for wholesale
electric energy and energy services in the United States is largely deregulated.
Our revenues and results of operations will depend, in large part, upon
prevailing market prices for energy, capacity and ancillary services in these
competitive markets.

     Most of our operating subsidiaries have entered into fuel supply, energy
services, risk management and power marketing agreements with our affiliate
Mirant Americas Energy Marketing. As part of the services and risk management
agreements, Mirant Americas Energy Marketing provides fuel and procures
emissions credits necessary for the operation of our generating facilities, the
cost of which is charged to our subsidiaries based upon actual costs incurred by
Mirant Americas Energy Marketing.

     Our expenses are primarily derived from the ongoing operations and
maintenance of our generating facilities, capital expenditures needed to ensure
their continued safe and environmentally compliant operation and financing
costs.

Results of Operations

                    FIRST QUARTER 2002 vs. FIRST QUARTER 2001
Significant income statement items appropriate for discussion include the
following:

                                                          Increase (Decrease)
                                                      --------------------------
                                                      (in millions)

   Operating revenues.................................  $(698)         (49%)
   Cost of fuel, electricity and other products.......   (628)         (62%)
   Other operating expenses
      Depreciation and amortization...................     (9)         (23%)
      Selling, general and administrative.............    (88)         (72%)
      Taxes other than income taxes...................      4           21%
      Other operating.................................    (10)         (16%)
   Interest expense, net..............................     16           48%
   Provision for income taxes.........................     (4)          (8%)
                                       21
<PAGE>

     Operating revenues. Our operating revenues for the three months ended March
31, 2002 were $729 million, a decrease of $698 million from the same period in
2001. This decrease was primarily due to unusually high prices for power in the
first quarter of 2001, as compared to decreased market demand and prices for
power in the western United States in the first quarter of 2002. In addition,
revenues from our Mid-Atlantic operations were higher in 2001 primarily due to
higher volumes and prices. This was partially offset by operating revenues
related to Mirant New England which were contributed to us in January 2002.

     Cost of fuel, electricity and other products. Our cost of fuel, electricity
and other products for the three months ended March 31, 2002 was $386 million,
compared to $1.01 billion for the same period in 2001. This decrease was
primarily attributable to decreased generation demand and lower prices for
natural gas primarily in the western United States in the first quarter of 2002.
This was offset somewhat from costs related to Mirant New England which were
contributed to us in January 2002.

     Other operating expenses. Our other operating expenses for the three months
ended March 31, 2002 were $165 million, a decrease of $97 million from the same
period in 2001. The following factors were responsible for the decrease in
operating expenses:

o    Depreciation and amortization expenses for the three months ended March 31,
     2002, were $30 million, compared to $39 million for the same period in
     2001. This decrease of $9 million was primarily from the elimination of
     goodwill amortization from implementation of SFAS No. 141 and SFAS No. 142.

o    Selling, general and administrative expenses for the three months ended
     March 31, 2002, were $34 million, compared to $122 million for the same
     period in 2001. The majority of the decrease of $88 million resulted from
     provisions taken in the first quarter of 2001 related to uncertainties in
     the California power markets.

o    Taxes other than income taxes for the three months ended March 31, 2002
     were $23 million, compared to $19 million for the same period in 2001. This
     increase of $4 million is primarily due to higher property taxes resulting
     from increases in the assessed property values of our generating
     facilities.

o    Other operating expenses for the three months ended March 31, 2002, were
     $52 million, compared to $62 million for the same period in 2001. This
     decrease of $10 million resulted primarily from lower labor costs at our
     generating facilities.

     Interest Expense, net. Interest expense, net for the three months ended
March 31, 2002, was $49 million, compared to $33 million for the same period in
2001. The increase of $16 million was primarily due to interest expense on the
senior notes which were issued during the second and third quarters of 2001.

     Provision for income taxes. The provision for income taxes for the three
months ended March 31, 2002, was $44 million, compared to a provision of $48
million for the same period in 2001. The primary reason for this decrease is
that effective November 1, 2001, we changed our form of organization from a
corporation to a limited liability company. The effect of this change of
organization is that taxes are no longer paid directly by our holding company,
but rather, will accrue directly to our sole owner, Mirant Americas.
Furthermore, we also changed the form of organization of one of our wholly owned
subsidiaries from a corporation to a limited liability company. Our unaudited
condensed consolidated financial statements will continue to reflect the
accounting and reporting for income taxes for our subsidiaries that continue to
retain their corporate form of organization for income tax purposes.

Liquidity and Capital Resources

     Historically, we have obtained cash from operations, borrowings under
credit facilities, borrowings from issuances of senior debt and borrowings and
capital contributions from Mirant. These funds have been used to finance

                                       22
<PAGE>

operations, service debt obligations, fund acquisitions, develop and construct
generating facilities, finance capital expenditures and meet other cash and
liquidity needs. Some of the cash flows associated with our businesses have been
distributed to Mirant from time to time, and Mirant has provided funds to cover
our disbursements from time to time.

Operating Activities. During the three months ended March 31, 2002, we generated
net cash from operations of approximately $192 million, compared to $114 million
for the same period in 2001. This increase is due to the timing of payments for
interest, taxes and affiliated company receivables and payables.

Investing Activities. During the three months ended March 31, 2002, we used $187
million for investment activities compared to $105 million for the same period
in 2001. During the three months ended March 31, 2002, our investment activities
were primarily attributable to the issuance of loans to affiliates of $246
million, partly offset by repayments of $128 million, and capital expenditures
of $78 million. During the three months ended March 31, 2001, our investment
activities were primarily attributed to $99 million in capital expenditures.

Financing Activities. During the three months ended March 31, 2002, our
financing activities used $18 million in net cash as compared to $16 million
during the same period in 2001. During the three months ended March 31, 2002,
our financing activities included receipt of $200 million in proceeds from the
issuance of debt, $128 million in proceeds from the issuance of debt due from
affiliates and capital contributions of $20 million from Mirant Americas. These
inflows were mostly offset by repayment of debt of $200 million, repayment of
debt to affiliates of $32 million and payment of $134 million in distributions
to Mirant Americas. During the three months ended March 31, 2001, our financing
activities included $21 million in distributions offset by capital contributions
of $5 million from Mirant Americas.

     Our cash flow from operations, asset sales, existing credit facilities and
cash position are expected to provide sufficient liquidity for working capital
and capital expenditures over the next 12 months. Our cash from operations is
expected to be sufficient to fund our debt service on an ongoing basis. Our
liquidity could be impacted by changing prices resulting from abnormal weather,
excess capacity, the inability to complete asset sales, changes in our, Mirant's
or Mirant Americas Energy Marketing's credit ratings and other factors.

     As of March 31, 2002, we had two credit facilities, each entered into in
October 1999, which consisted of a $250 million 5-year revolving credit
agreement ("Credit Facility B") for capital expenditures and general corporate
purposes and a $50 million 5-year revolving credit facility ("Credit Facility
C") for working capital needs. The commitments under Credit Facility B and
Credit Facility C remain available through October 2004. As of March 31, 2002,
the outstanding borrowings under Credit Facility B were $73 million. As of March
31, 2002, there were no borrowings under Credit Facility C.

     In addition to other covenants and terms, each of our credit facilities
includes minimum debt service coverage, a maximum leverage covenant and a
minimum debt service coverage test for dividends and distributions. As of March
31, 2002, there were no events of default under such credit facilities.

Mirant Mid-Atlantic Power Sales Agreement

         At the inception date of the ECSA, the pricing of Mirant Americas
Energy Marketing's minimum committed capacity and energy purchases over the term
of the agreements was favorable to us and our affiliates when compared to
projected market rates in the PJM. At inception, the total value to us and our
affiliates was approximately $167 million. The amount related specifically to
the Mirant Mid-Atlantic owned or leased facilities amounted to $120 million and
was reflected as both an addition to members' equity and an offsetting contra
equity account on our consolidated balance sheet and statement of member's
equity at the inception of the agreements.

     Mirant Mid-Atlantic will reduce operating revenue recognized under these
agreements by the favorable pricing variance of $70 million, at March 31, 2002,
through the end of 2002, based on the proportion of volume delivered to the

                                       23
<PAGE>

expected minimum delivery over the remaining period. The total amount of
operating revenue reductions for the three months ended March 31, 2002 was $17
million. The contra equity amount is reduced as cash is received from Mirant
Americas Energy Marketing over the contract term, with cash being received in
the month following the reduction to operating revenue. The total amount of cash
received, attributable to the favorable variance, during the three months ended
March 31, 2002 amounted to $14 million.

Contractual Obligations and Commitments

Risk Management Activities

    Certain financial instruments that we use to manage risk exposure to energy
prices do not meet the hedge criteria under SFAS No. 133. The fair values of
these instruments are recorded in risk management assets and liabilities on our
unaudited condensed consolidated balance sheet at March 31, 2002. At March 31,
2002, the fair value of these instruments was a net liability of approximately
$12 million.

Construction Related Commitments

     We have entered into various turbine and other construction related
commitments related to brownfield developments at its various generation
facility sites. At March 31, 2002, these construction related commitments
totaled approximately $320 million.

Long-Term Service Agreements

     We have entered into long-term service agreements for the maintenance and
repair for certain of its combustion turbines for combined-cycle generating
plants which are in effect through 2016. At March 31, 2002, the total estimated
commitment under these agreements was approximately $180 million.

Fuel Commitments

     We have commitments under fuel purchase and transportation agreements
totaling $116 million at March 31, 2002. These agreements will continue to be in
effect through 2007. In addition, in April 2002, Mirant Mid-Atlantic entered
into a long-term fuel purchase agreement. The fuel supplier will convert coal
feedstock received at the Company's Morgantown facility into a synthetic fuel.
Under the terms of the agreement, Mirant Mid-Atlantic will purchase a minimum of
2.4 million tons of fuel per annum through December 2007. This minimum purchase
commitment will become effective upon the commencement of the synthetic fuel
plant operation at the Morgantown facility, currently expected to be June 2002.
The purchase price of the fuel will vary with the delivered cost of the coal
feedstock. Based on current coal prices it is expected that the annual purchase
commitment will be approximately $100 million.

Operating Leases

     We have commitments under operating leases with various terms and
expiration dates. Expenses associated with these commitments totaled
approximately $25 million during each of the three month periods ended March 31,
2002 and 2001.

     On December 19, 2000, in conjunction with the purchase of the PEPCO assets,
we, through Mirant Mid-Atlantic, entered into a lease transaction for $1.5
billion relating to the Dickerson and Morgantown baseload units and associated
property. The term of each operating lease varies between 28.5 and 33.75 years.
The total notional minimum lease payments for the life of the leases are
approximately $2.9 billion.


                                       24
<PAGE>

Litigation and Other Contingencies

     Reference is made to Note G to the financial statements filed as part of
this quarterly report on Form 10-Q relating to the following litigation matters
and other contingencies:

Litigation:

o        California Attorney General Litigation
o        Defaults by SCE and Pacific Gas and Electric and the Bankruptcy of
          Pacific Gas and Electric and the PX
o        Reliability-Must-Run Agreements
o        Western Power Markets Price Mitigation and Refund Proceedings
o        California Rate Payer Litigation
o        Enron Bankruptcy Proceedings
o        State Line
o        PEPCO Asbestos Litigation
o        Environmental Information Requests

Other Contingencies:
o        Western Power Market Investigations
o        DWR Power Purchases

     Additionally, for recent events occurring after March 31, 2002 reference is
made to Note I to the financial statements filed as part of this quarterly
report on Form 10-Q.

     In addition to the proceedings described above, we experience routine
litigation from time to time in the normal course of our business, which is not
expected to have a material adverse effect on our consolidated financial
condition, cash flows or results of operations.

                                       25
<PAGE>

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk is the potential loss that we may incur as a result of changes
in the fair value of a particular instrument or commodity. All financial and
commodities-related instruments, including derivatives, are subject to market
risk. We are exposed to market risks, including changes in commodity prices and
interest rates. Through various hedging mechanisms, including contractual
arrangements with Mirant Americas Energy Marketing, we attempt to mitigate some
of the impact of changes in commodity prices and interest rates on our results
of operations.

     We engage in commodity-related marketing and price risk management
activities, through Mirant Americas Energy Marketing, in order to hedge market
risk and exposure to electricity and to natural gas, coal and other fuels
utilized by our generation assets. These financial instruments primarily include
fixed rate power sale agreements, forwards, futures and swaps. Subsequent to the
adoption of SFAS No. 133 on January 1, 2001, these derivative instruments are
recorded in the consolidated balance sheet as either assets or liabilities
measured at fair value, and changes in the fair value are recognized currently
in earnings, unless specific hedge accounting criteria are met. If the criteria
for hedge accounting are met, changes in the fair value are recognized in other
comprehensive income until such time as the underlying physical transaction is
settled and the gains and losses related to these derivatives are recognized in
earnings.

     We maintain clear policies for undertaking risk-mitigating actions that may
become necessary when measured risks temporarily exceed limits as a result of
market conditions. To the extent an open position exists, fluctuating commodity
prices can impact financial results and financial position, either favorably or
unfavorably. As a result, we cannot predict with precision the impact that our
risk management decisions may have on our businesses, operating results or
financial position. Mirant Americas Energy Marketing manages market price risk
for us through formal oversight groups, which include senior management,
mechanisms that independently verify transactions and measure risk and the use
of a Value-at-Risk ("VaR") methodology on a daily basis. We bear all gains and
losses of the market price risk mitigation activities conducted by Mirant
Americas Energy Marketing on our behalf.

     For those commodity contracts for which hedge accounting criteria are met,
any changes in the fair value of these contracts reflect essentially offsets to
changes in the value of the underlying physical asset positions. Therefore, we
have minimal exposure to market risk on the portion of our portfolio of
commodity contracts in which we are effectively hedging the exposure of our
physical assets to changes in market prices.

     For those derivative instruments in which hedge criteria are not met, we
employ a systematic approach to the evaluation and management of risk associated
with these commodity contracts, including VaR. VaR is defined as the maximum
loss that is not expected to be exceeded with a given degree of confidence and
over a specified holding period. We use a 95% confidence interval and holding
periods that vary by commodity and tenor to evaluate our VaR exposure. Based on
a 95% confidence interval and employing a one-day holding period for all
positions, our portfolio of positions had a VaR of $4 million at March 31, 2002.
During the three months ended March 31, 2002, the actual daily change in fair
value exceeded the corresponding daily VaR calculation three times, which falls
well within our 95% confidence interval. We also utilize additional risk control
mechanisms such as commodity position limits and stress testing of the total
portfolio and its components.

Credit Risk

     For all derivative financial instruments, we are exposed to losses in the
event of nonperformance by counterparties to these derivative financial
instruments. Through Mirant Americas Energy Marketing, we have established
controls to determine and monitor the creditworthiness of counterparties to
mitigate our exposure to counterparty credit risk. Concentrations of credit risk
from financial instruments, including contractual commitments, exist when groups
of counterparties have similar business characteristics or are engaged in like

                                       26
<PAGE>

activities that would cause their ability to meet their contractual commitments
to be adversely affected, in a similar manner, by changes in the economy or
other market conditions. Mirant Americas Energy Marketing monitors credit risk
for us on both an individual basis and a group counterparty basis. Our overall
exposure to credit risk may be impacted, either positively or negatively,
because our counterparties may be similarly affected by changes in economic,
regulatory or other conditions.

     Under Mirant's cash management program, our available cash is loaned to
Mirant on a daily basis and kept in a Mirant account. Our participation in
Mirant's cash management program exposes us to Mirant credit risk as unsecured
creditors in the full amount of cash held by Mirant pursuant to the cash
management loan agreements. The repayments by Mirant of any advances is
subordinated to the repayment of the senior obligations of Mirant. Furthermore,
Mirant Americas Energy Marketing makes substantially all of our sales on our
behalf and collects all cash receipts from sales made on our behalf. As such, we
are also subject to the risk of collection from Mirant Americas Energy Marketing
of substantially all of our outstanding accounts receivables at any point in
time.

PART II     OTHER INFORMATION

Item 1.       Legal Proceedings

     The following information updates previously reported litigation or sets
forth information concerning litigation that has begun subsequent to the filing
of our Form 10-K on March 28, 2002. A background for the updates can be found in
Notes G and I to the financial statements herein or in our annual report on Form
10-K filed March 28, 2002. With respect to each of the following matters, the
Company cannot currently determine the outcome of the proceedings or the outcome
of any potential losses from such proceedings.

California Attorney General Litigation: On April 9, 2002, the California
Attorney General filed a second civil suit against Mirant and several of its
wholly owned subsidiaries (including Mirant Americas Generation entities) in San
Francisco Superior Court. The lawsuit alleges that the companies violated the
California Unfair Competition Act by failing properly to file its rates, prices,
and charges with the Federal Energy Regulatory Commission as required by the
Federal Power Act, and by charging unjust and unreasonable prices in violation
of the Federal Power Act. The complaint seeks unspecified penalties, costs and
attorney fees.

     On April 15, 2002, the California Attorney General filed in the U.S.
District Court for the Northern District of California a third civil lawsuit
against Mirant and several of its wholly owned subsidiaries (including Mirant
Americas Generation entities). The lawsuit alleges that the Company's
acquisition and possession of its Potrero and Delta power plants has, and will
continue to, substantially lessen competition, all in violation of the Clayton
Act and state unfair trade practices statutes. The lawsuit seeks equitable
remedies in the form of divestiture of the plants and injunctive relief, as well
as monetary damages in unspecified amounts to include disgorgement of profits,
restitution, treble damages, statutory civil penalties, and attorney fees.

California Rate Payer Litigation: On April 23, 2002, a class action law suit was
filed on behalf of all customers of electricity distributed into California by
the defendants (other than the defendants and their affiliates) by T&E Pastorino
Nursery and Pastorino & Son Nursery against several California generators,
including Mirant and several of its subsidiaries (including Mirant Americas
Generation entities), in the Superior Court for the County of San Mateo,
California. The suit is related to events in the California wholesale
electricity market occurring over the last three years. The suit alleges that
the defendants violated the state unfair trade practices statutes by engaging in
unfair, unlawful and deceptive practices and by acquiring generating plants in
California that allowed them to exercise market power to withhold capacity and
raise prices above competitive levels. The plaintiffs seek restitution,
injunctive relief and unspecified compensatory and general damages.


                                       27
<PAGE>

Item 6.       Exhibits and Reports on Form 8-K

(a)      Exhibits.

                 None.


(b)      Reports on Form 8-K.


          During the quarter ended March 31, 2002, we filed a Current Report on
     Form 8-K dated March 11, 2002. Items 5 and 7 were reported and financial
     statements were filed.




                                       28
<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The signature of the undersigned company
shall be deemed to relate only to matters having reference to such company and
any subsidiaries thereof.

    MIRANT AMERICAS GENERATION, LLC




    By  /s/ Stephen G. Gillis
        ----------------------------------------
          Vice President and Controller
         (Principal Accounting Officer)

                                                       Date: May 13, 2002