Dynegy Announces Third Quarter 2009 Financial Results
http://www.businesswire.com/news/home/20091105005618/en
HOUSTON--(Business Wire)--
Dynegy Inc. (NYSE: DYN):
* Adjusted EBITDA of $388 million up 44 percent period-over-period primarily due
to:
* The sale and assignment of a multi-year power sales contract;
* Higher capacity and tolling revenues; and
* Higher realized energy prices in the Midwest
* Net loss attributable to Dynegy Inc. of $212 million reflects after-tax
charges of $238 million primarily related to asset impairments and $78 million
of after-tax mark-to-market losses; compares to net income of $605 million for
the third quarter 2008, which included $542 million of after-tax mark-to-market
gains
* Production volumes down slightly period-over-period
* Company raises and tightens 2009 guidance estimates and provides details
behind 2010 guidance estimates
Dynegy Inc. (NYSE: DYN) today announced that Adjusted EBITDA for the third
quarter 2009 was $388 million, compared to $269 million for the third quarter
2008. The period-over-period increase in Adjusted EBITDA was primarily related
to the sale and assignment of a multi-year power sales contract, higher capacity
and tolling revenues and higher realized energy prices in the Midwest. The
company also reported a net loss attributable to Dynegy Inc. of $212 million or
($0.25) per diluted share for the third quarter 2009, compared to net income of
$605 million or $0.72 per diluted share for the third quarter 2008. The net loss
in the third quarter 2009 was primarily driven by asset impairment charges and
mark-to-market losses. GAAP results include mark-to-market losses of $128
million ($78 million after tax) for the third quarter 2009, compared to
mark-to-market gains of $889 million ($542 million after tax) for the third
quarter 2008.
"While Dynegy`s third quarter financial results continued to be impacted by the
overall weakness in U.S. energy prices, we again demonstrated the benefits of
having a diverse, well-operated fleet of power generation assets," said Bruce A.
Williamson, Chairman, President and Chief Executive Officer of Dynegy Inc.
"Increased production volumes from our Midwest and Northeast combined-cycle
facilities helped to partially offset reduced run-times from coal-fired
generation. This fleet diversity contributed to third quarter production volumes
that were down only slightly period-over-period. Our operational performance
also included strong reliability levels, with in-market availability of 92
percent for our baseload coal fleet.
"Dynegy`s capital structure currently includes available liquidity of $2.1
billion, with cash-on-hand of $699 million," Williamson added. "Following the
anticipated completion of the sale of assets to LS Power in the fourth quarter,
we will have improved financial strength to address near-term debt maturities
and other obligations as we manage through the current depressed commodity
markets and position the company to deliver long-term value to investors."
A comparison of the company`s third quarter results period-over-period is set
forth in the table below (in millions of dollars, except per share amounts). The
non-GAAP financial measures of EBITDA, Adjusted EBITDA, Adjusted Cash Flow from
Operations and Adjusted Free Cash Flow are used by management to evaluate
Dynegy's business on an ongoing basis. Definitions, purposes and uses of such
non-GAAP measures are included in Item 2.02 to our Current Report on Form 8-K
filed with the SEC on November 5, 2009, which is available on the company`s
website free of charge at www.dynegy.com. Reconciliations of these measures to
the most directly comparable GAAP measures are included in the accompanying
schedules to this news release.
Three Months Three Months
Ended Ended
09/30/2009 09/30/2008
(unaudited)
(unaudited)
Basic Income (Loss) Per Share Attributable to Dynegy Inc. $ (0.25 ) $ 0.72
Diluted Income (Loss) Per Share Attributable to Dynegy Inc. $ (0.25 ) $ 0.72
Net Income (Loss) Attributable to Dynegy Inc. $ (212 ) $ 605
Add Back:
Income Tax Expense (Benefit) (118 ) 414
Interest Expense 115 105
Depreciation and Amortization Expense 87 91
EBITDA (128 ) 1,215
Plus / (Less):
Impairments 383 -
Mark-to-Market Losses (Gains), Net 128 (889 )
Sandy Creek Mark-to-Market Losses 5 -
Gain on Sale of Rolling Hills - (57 )
Adjusted EBITDA $ 388 $ 269
Power Generation
Dynegy`s diversified power generation business includes three business segments:
the Midwest, with approximately 8,400 megawatts of generation capacity; the
West, with approximately 5,500 megawatts of generation capacity; and the
Northeast, with approximately 3,800 megawatts of generation capacity.
Adjusted EBITDA from the power generation segments was $431 million for the
third quarter 2009, compared to $307 million for the third quarter 2008.
Management does not allocate interest expense and income taxes on a segment
level and therefore uses operating income as the most directly comparable GAAP
measure. Operating income from the power generation segments was $40 million for
the third quarter 2009, compared to $1.1 billion for the third quarter 2008.
Operating income from continuing and discontinued operations during the third
quarter 2009 reflected $382 million in impairment charges ($234 million after
tax) that were recorded based on the accounting classification of the eight
power generation facilities anticipated to be sold to LS Power as held for sale.
Operating income from continuing and discontinued operations during the third
quarter 2009 also reflected mark-to-market losses of $128 million. This compares
to mark-to-market gains of $889 million for the third quarter 2008, when forward
market power prices decreased during the period.
The following factors influenced the quarter`s results as compared to the third
quarter 2008. Please read the accompanying schedules to this news release for
additional information.
* Midwest - Adjusted EBITDA benefited from the sale and assignment of a
multi-year power sales contract and higher realized energy prices that were
contracted prior to the market downturn. Midwest production volumes decreased 7
percent period-over-period. This was primarily due to a 12 percent reduction in
coal facility volumes that was largely related to decreased demand attributed to
mild summer weather and increased off-peak wind generation. This decline was
partially offset by a 15 percent increase in volumes related to the company`s
natural gas facilities. Specifically, the company`s natural gas combined-cycle
facilities experienced increased run-times due to coal-to-gas switching in PJM.
* West - Adjusted EBITDA benefited from increased tolling and capacity revenues.
Production volumes decreased 5 percent due to weak spark spreads attributed to
lower demand and mild weather.
* Northeast - Adjusted EBITDA benefited from a 20 percent increase in production
volumes attributed to natural gas combined-cycle facilities, which benefited
from coal-to-gas switching in the region and reduced transmission congestion.
This was partially offset by reduced run-times for coal- and oil-fired units due
to compressed spark spreads.
Adjusted Cash Flow from Operations for generation was $690 million for the nine
months ended September 30, 2009, while maintenance and environmental capital
expenditures were $103 million and $241 million, respectively. Adjusted Cash
Flow from Operations for generation was $764 million for the nine months ended
September 30, 2008, while maintenance and environmental capital expenditures
were $83 million and $171 million, respectively. Adjusted Free Cash Flow from
the power generation business was $346 million for the nine months ended
September 30, 2009, compared to $510 million for the nine months ended September
30, 2008.
On a GAAP basis, Cash Flow from Operations for generation was $683 million for
the nine months ended September 30, 2009, compared to $757 million for the nine
months ended September 30, 2008. Net cash used in investing activities was $341
million for the nine months ended September 30, 2009, compared to net cash used
in investing activities of $108 million for the nine months ended September 30,
2008. Net cash provided by financing activities was $47 million for the nine
months ended September 30, 2009, compared to net cash provided by financing
activities of $133 million for the nine months ended September 30, 2008.
Other
Other primarily consists of general and administrative expenses, partially
offset by interest income. In Other, the company reported a $43 million Adjusted
loss before interest, taxes and depreciation and amortization ($47 million
operating loss) during the third quarter 2009, compared to an Adjusted loss of
$38 million ($51 million operating loss) during the third quarter 2008. The
higher Adjusted loss during the third quarter 2009 was primarily related to a
decrease in interest income due to lower interest rates.
Consolidated Interest Expense and Taxes
The company`s interest expense totaled $115 million for the third quarter 2009,
compared to $105 million for the third quarter 2008. The increase was primarily
attributable to $14 million of expenses related to the change in value and
settlement of interest rate swaps associated with the Plum Point credit
agreement, partially offset by lower LIBOR rates on the company`s variable-rate
debt.
The third quarter 2009 income tax benefit from continuing operations was $34
million, compared to an income tax expense from continuing operations of $392
million for the third quarter 2008.
Liquidity
As of September 30, 2009, Dynegy`s liquidity was $1.9 billion. This consisted of
$703 million in cash on hand and $1.2 billion in unused availability under the
company`s credit facility.
The company`s previously disclosed transaction with LS Power is expected to be
completed in the fourth quarter 2009, with an anticipated increase in available
cash and liquidity of more than $1 billion.
Cash Flow
Adjusted Cash Flow from Operations totaled an inflow of $336 million for the
nine months ended September 30, 2009. There was a cash inflow of $690 million
from the power generation business, offset by outflows of $354 million in Other
resulting primarily from interest payments and general and administrative
expenses, net of interest income.
For the nine months ended September 30, 2009, Dynegy`s Adjusted Free Cash Flow
was an outflow of $13 million. Capital expenditures included maintenance and
environmental capital expenditures of $108 million and $241 million,
respectively, the latter of which reflects the company`s continuing investment
in environmental upgrades.
For the nine months ended September 30, 2008, Dynegy`s Adjusted Free Cash Flow
was an inflow of $156 million. This consisted of Adjusted Cash Flow from
Operations of $421 million, offset by maintenance and environmental capital
expenditures of $94 million and $171 million, respectively.
On a GAAP basis, Cash Flow from Operations for the nine months ended September
30, 2009, and September 30, 2008, was $304 million and $397 million,
respectively. Net cash used in investing activities for the nine months ended
September 30, 2009, was $341 million, compared to net cash used in investing
activities of $108 million for the nine months ended September 30, 2008. Net
cash provided by financing activities for the nine months ended September 30,
2009, was $47 million, compared to net cash provided by financing activities of
$133 million for the nine months ended September 30, 2008.
2009 Guidance Estimates
Adjusted EBITDA, Adjusted Cash Flow from Operations and Adjusted Free Cash Flow
ranges for 2009 have been raised and tightened from the previous ranges
presented on August 10, 2009.
The new estimates are:
* A range of Adjusted EBITDA of $730 million to $760 million;
* A range of Adjusted Cash Flow from Operations of $75 million to $105 million;
and
* A range of Adjusted Free Cash Flow of $(425) million to $(395) million.
Adjusted EBITDA improved due to the sale and assignment of a power sales
contract, partially offset by the purchase of additional options that provide
downside protection in future periods. Additionally, ranges were tightened
across all of the company`s operating segments. The decline in Adjusted Cash
Flow from Operations and Adjusted Free Cash Flow resulted from increased cash
collateral postings related to 2010 and 2011 contracted positions. This
additional cash outflow is currently the most efficient means of collateralizing
the company`s hedging program due to the favorable economics of posting cash in
lieu of letters of credit for exchange-traded positions. However, the company
could decide to exchange letters of credit for cash, resulting in a significant
cash inflow.
The guidance estimates for the most directly comparable measures on a GAAP basis
include:
* A range of Net Loss of $(1.2) billion to $(1.1) billion;
* A range of Cash Flow from Operations of $45 million to $75 million;
* Net Cash provided by Investing Activities of $260 million; and
* Net Cash used in Financing Activities of $(555) million.
These estimates reflect quoted forward commodity price curves as of October 6,
2009. These estimates also reflect assumptions regarding, among other things,
sales volumes, fuel costs and other operational activities.
2010 Guidance Estimates
On August 10, 2009, the company provided an Adjusted EBITDA range of $425
million to $550 million for 2010. In today`s news release, the company is
reaffirming that range and providing additional 2010 guidance estimate ranges
relating to Adjusted Cash Flow from Operations and Adjusted Free Cash Flow.
These ranges reflect business changes, including the sale of eight power
generation facilities and a power generation project under construction, that
are expected to result from the pending transaction with LS Power. The
transaction is expected to close in the fourth quarter 2009 assuming all
necessary closing conditions are satisfied.
The estimates are:
* A range of Adjusted EBITDA of $425 million to $550 million;
* A range of Adjusted Cash Flow from Operations of $(15) million to $110
million; and
* A range of Adjusted Free Cash Flow of $(360) million to $(235) million. This
primarily reflects the significant investment in environmental capital expense
to reduce emissions.
The guidance estimates for the most directly comparable measures on a GAAP basis
include:
* A range of Net Loss of $(250) million to $(175) million;
* A range of Cash Flow from Operations of $(15) million to $110 million;
* Net Cash used in Investing Activities of $(345) million; and
* Net Cash used in Financing Activities of $(65) million.
These estimates reflect quoted forward commodity price curves as of October 6,
2009. These estimates also reflect assumptions regarding, among other things, a
liability management program, sales volumes, fuel costs and other operational
activities.
Investor Conference Call/Web Cast
Dynegy will discuss its third quarter 2009 financial results during an investor
conference call and web cast today, November 5, 2009, at 9 a.m. ET/8 a.m. CT.
Participants may access the web cast and the related presentation materials in
the "Investor Relations" section of www.dynegy.com.
About Dynegy Inc.
Through its subsidiaries, Dynegy Inc. produces and sells electric energy,
capacity and ancillary services in key U.S. markets. The power generation
portfolio consists of approximately 17,700 megawatts of baseload, intermediate
and peaking power plants fueled by a mix of natural gas, coal and fuel oil. DYNC
Certain statements included in this news release are intended as
"forward-looking statements." These statements include assumptions,
expectations, predictions, intentions or beliefs about future events,
particularly the statements concerning: anticipated earnings or cash flows; the
closing of the LS Power transaction and the timing, terms or success thereof;
Dynegy`s commercial strategy; and Dynegy`s estimated financial results for 2009
and 2010. Historically, Dynegy`s performance has deviated, in some cases
materially, from its cash flow and earnings estimates and Dynegy cautions that
actual future results may vary materially from those expressed or implied in any
forward-looking statements. While Dynegy would expect to update these estimates
on a quarterly basis, it does not intend to update these estimates during any
quarter because definitive information regarding its quarterly financial results
is not available until after the books for the quarter have been closed.
Accordingly, Dynegy expects to provide updates only after it has closed the
books and reported the results for a particular quarter, or otherwise as may be
required by applicable law.
Dynegy cautions that actual future results may vary materially from those
expressed or implied in any forward-looking statements. Specifically, Dynegy
cautions that: the LS Power transaction may not close on the timing and terms
expected, if at all; market fundamentals and trends may not be to Dynegy`s
benefit or as Dynegy anticipates; Dynegy`s capital resources and available
liquidity may be negatively impacted by market forces beyond its control,
reducing capital available for discretionary or other purposes; Dynegy`s asset
base may not perform at the level anticipated; changes in commodity prices for
fuel and power may negatively impact Dynegy and impact its ability to continue
to satisfy its credit agreement financial covenants; and uncertainties exist
regarding environmental regulations, litigation and other legal, legislative or
regulatory developments and their potential impacts on Dynegy`s businesses. More
information about the risks and uncertainties relating to these forward-looking
statements is found in Dynegy`s SEC filings, including its Annual Report on Form
10-K, as supplemented, for the year ended December 31, 2008, its Quarterly
Reports on Forms 10-Q for the quarters ended March 31, 2009, and June 30, 2009,
and its Current Reports, all of which are available free of charge on Dynegy`s
website at www.dynegy.com. Dynegy expressly disclaims any obligation to update
any forward-looking statements contained in this news release to reflect events
or circumstances that may arise after the date of this release, except as
otherwise required by applicable law.
DYNEGY INC.
REPORTED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenues $ 673 $ 1,759 $ 2,027 $ 2,550
Cost of sales (286 ) (498 ) (927 ) (1,326 )
Operating and maintenance expense, exclusive of depreciation and amortization shown separately below (121 ) (122 ) (373 ) (344 )
Depreciation and amortization expense (83 ) (85 ) (258 ) (258 )
Gain on sale of assets - 57 - 83
Goodwill impairments - - (433 ) -
Impairments and other charges, exclusive of goodwill impairments shown separately above (148 ) - (535 ) -
General and administrative expenses (42 ) (48 ) (125 ) (126 )
Operating income (loss) (7 ) 1,063 (624 ) 579
Earnings (losses) from unconsolidated investments (8 ) (5 ) 13 (17 )
Interest expense (115 ) (105 ) (311 ) (322 )
Other income and expense, net 2 11 10 46
Income (loss) from continuing operations before income taxes (128 ) 964 (912 ) 286
Income tax benefit (expense) 34 (392 ) 147 (121 )
Income (loss) from continuing operations (94 ) 572 (765 ) 165
Income (loss) from discontinued operations, net of tax (129 ) 32 (141 ) 13
Net income (loss) (223 ) 604 (906 ) 178
Less: Net loss attributable to the noncontrolling interests (11 ) (1 ) (14 ) (3 )
Net income (loss) attributable to Dynegy Inc. $ (212 ) $ 605 $ (892 ) $ 181
Basic income (loss) per share attributable to Dynegy Inc. common stockholders:
Income (loss) from continuing operations (1) $ (0.10 ) $ 0.68 $ (0.89 ) $ 0.20
Income (loss) from discontinued operations (0.15 ) 0.04 (0.17 ) 0.02
Basic income (loss) per share attributable to Dynegy Inc. common stockholders $ (0.25 ) $ 0.72 $ (1.06 ) $ 0.22
Diluted income (loss) per share attributable to Dynegy Inc. common stockholders:
Income (loss) from continuing operations (1) $ (0.10 ) $ 0.68 $ (0.89 ) $ 0.20
Income (loss) from discontinued operations (0.15 ) 0.04 (0.17 ) 0.02
Diluted income (loss) per share attributable to Dynegy Inc. common stockholders: $ (0.25 ) $ 0.72 $ (1.06 ) $ 0.22
Basic shares outstanding 843 840 842 840
Diluted shares outstanding 846 842 845 842
(1) A reconciliation of basic loss per share from continuing operations attributable to Dynegy Inc. to diluted loss per share from continuing operations attributable to Dynegy Inc. is presented below:
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Income (loss) from continuing operations $ (94 ) $ 572 $ (765 ) $ 165
Less: Net loss attributable to the noncontrolling interests (11 ) (1 ) (14 ) (3 )
Income (loss) from continuing operations attributable to Dynegy Inc. for basic and diluted loss per share $ (83 ) $ 573 $ (751 ) $ 168
Basic weighted-average shares 843 840 842 840
Effect of dilutive securities:
Stock options and restricted stock 3 2 3 2
Diluted weighted-average shares 846 842 845 842
Income (loss) per share from continuing operations attributable to Dynegy Inc.:
Basic $ (0.10 ) $ 0.68 $ (0.89 ) $ 0.20
Diluted (2) $ (0.10 ) $ 0.68 $ (0.89 ) $ 0.20
(2) Entities with a net loss from continuing operations are prohibited from including potential common shares in the computation of diluted per-share amounts. Accordingly, Dynegy Inc. has utilized the basic shares outstanding amount to calculate both basic and diluted loss per share for the three and nine months ended September 30, 2009.
DYNEGY INC.
REPORTED SEGMENTED RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2009
(UNAUDITED) (IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Net loss attributable to Dynegy Inc. $ (212 )
Plus / (Less):
Income tax benefit (118 )
Interest expense 115
Depreciation and amortization 87
expense
EBITDA (1) $ 73 $ (167 ) $ 9 $ (43 ) $ (128 )
Plus / (Less):
Asset impairments (2) 147 235 1 - 383
Sandy Creek mark-to-market losses - 5 - - 5
(3)
Mark-to-market losses, net 44 39 45 - 128
Adjusted EBITDA (1) $ 264 $ 112 $ 55 $ (43 ) $ 388
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of EBITDA to Operating income (loss) is presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating income (loss) as the most directly comparable GAAP measure.
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Operating income (loss) $ 5 $ 34 $ 1 $ (47 ) $ (7 )
Losses from unconsolidated - (8 ) - - (8 )
investments
Other items, net - 1 - 1 2
Net loss attributable to the 11 - - - 11
noncontrolling interests
Depreciation and amortization 57 15 8 3 83
expense
EBITDA from continuing operations 73 42 9 (43 ) 81
EBITDA from discontinued operations - (209 ) - - (209 )
(4)
EBITDA $ 73 $ (167 ) $ 9 $ (43 ) $ (128 )
(2) On August 9, 2009, we entered into a purchase and sale agreement with LS Power. At that time, the assets included in the agreement met the criteria of held for sale. As a result, we recognized pre-tax charges of approximately $382 million ($234 million after-tax) related to asset impairments. Below is the breakdown of the asset impairment charges by region:
Pre-tax After-tax
GEN-MW
Renaissance $ 65 $ 40
Riverside/Foothills 18 11
Rocky Road 22 14
Tilton 42 26
Total (a) $ 147 $ 91
GEN-WE
Arlington Valley $ 112 $ 68
Griffith 123 75
Total (b) $ 235 $ 143
(a) These charges are included in Impairments and other charges on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
(b) These charges are included in Income (loss) from discontinued operations, net on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
In addition, GEN-NE also included a $1 million ($1 million after-tax) impairment charge related to our Roseton and Danskammer power generation facilities as a result of continued expected cash flow losses related to these assets. This charge is included in Impairments and other charges on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
(3) We recognized pre-tax losses of approximately $5 million ($3 million after-tax) related to the change in fair value of the Sandy Creek Project interest rate swaps. This loss is included in Earnings (losses) from unconsolidated investments on our Reported Unaudited Condensed Consolidated Statements of Operations.
(4) A reconciliation of EBITDA from discontinued operations to Loss from discontinued operations, net of tax, is presented below.
EBITDA from discontinued operations $ (209 )
Depreciation and amortization expense from discontinued operations (4 )
Income tax benefit from discontinued operations 84
Loss from discontinued operations, net of tax $ (129 )
DYNEGY INC.
REPORTED SEGMENTED RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2008
(UNAUDITED) (IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Net income attributable to Dynegy Inc. $ 605
Plus / (Less):
Income tax expense 414
Interest expense 105
Depreciation and amortization expense 91
EBITDA (1) $ 807 $ 229 $ 217 $ (38 ) $ 1,215
Plus / (Less):
Gain on sale of Rolling Hills (2) (57 ) - - - (57 )
Mark-to-market gains, net (568 ) (146 ) (175 ) - (889 )
Adjusted EBITDA (1) $ 182 $ 83 $ 42 $ (38 ) $ 269
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of EBITDA to Operating income (loss) is presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating income (loss) as the most directly comparable GAAP measure.
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Operating income (loss) $ 757 $ 153 $ 204 $ (51 ) $ 1,063
Losses from unconsolidated investments - (5 ) - - (5 )
Other items, net - 1 (1 ) 11 11
Net loss attributable to the noncontrolling interests 1 - - - 1
Add: Depreciation and amortization expense 49 20 14 2 85
EBITDA from continuing operations 807 169 217 (38 ) 1,155
EBITDA from discontinued operations (3) - 60 - - 60
EBITDA $ 807 $ 229 $ 217 $ (38 ) $ 1,215
(2) We recognized a pre-tax gain of approximately $57 million ($32 million after-tax) on the sale of our Rolling Hills power generation facility. This gain is included in Gain on sale of assets on our Reported Unaudited Condensed Consolidated Statements of Operations.
(3) A reconciliation of EBITDA from discontinued operations to Income from discontinued operations, net of tax, is presented below.
EBITDA from discontinued operations $ 60
Depreciation and amortization expense from discontinued operations (6 )
Income tax expense from discontinued operations (22 )
Income from discontinued operations, net of tax $ 32
DYNEGY INC.
REPORTED SEGMENTED RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2009
(UNAUDITED) (IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Net loss attributable to Dynegy Inc. $ (892 )
Plus / (Less):
Income tax benefit (7) (238 )
Interest expense 311
Depreciation and amortization 273
expense
EBITDA (1) $ 302 $ (344 ) $ (385 ) $ (119 ) $ (546 )
Plus / (Less):
Asset impairments (2) 170 235 388 - 793
Goodwill impairment (3) 76 260 97 - 433
Gain on sale of Heard County (4) - (10 ) - - (10 )
Sandy Creek mark-to-market gains - (20 ) - - (20 )
(5)
Mark-to-market losses, net 4 50 8 - 62
Adjusted EBITDA (1) $ 552 $ 171 $ 108 $ (119 ) $ 712
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of EBITDA to Operating income (loss) is presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating income (loss) as the most directly comparable GAAP measure.
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Operating income (loss) $ 143 $ (209 ) $ (424 ) $ (134 ) $ (624 )
Earnings from unconsolidated - 12 - 1 13
investments
Other items, net 2 3 - 5 10
Net loss attributable to the 14 - - - 14
noncontrolling interests
Depreciation and amortization 165 45 39 9 258
expense
EBITDA from continuing operations 324 (149 ) (385 ) (119 ) (329 )
EBITDA from discontinued operations (22 ) (195 ) - - (217 )
(6)
EBITDA $ 302 $ (344 ) $ (385 ) $ (119 ) $ (546 )
(2) During the second quarter 2009, we recognized pre-tax charges of approximately $202 million ($123 million after-tax) related to asset impairments. These impairments were recorded due to management's conclusion that it was more likely than not that these assets would be sold prior to the end of their previously estimated useful lives. On August 9, 2009, we entered into a purchase and sale agreement with LS Power. At that time, the assets included in the agreement met the criteria of held for sale. As a result, we recognized pre-tax charges of approximately $382 million ($234 million after-tax) related to asset impairments. Below is the breakdown of these asset impairment charges by region:
Pre-tax After-tax
GEN-MW
Renaissance (a) $ 65 $ 40
Riverside/Foothills (a) 18 11
Rocky Road (a) 22 14
Tilton (a) 42 26
Blugrass (b) 23 14
Total $ 170 $ 105
GEN-WE
Arlington Valley (b) $ 112 $ 68
Griffith (b) 123 75
Total $ 235 $ 143
GEN-NE
Bridgeport (a) $ 179 $ 109
Total $ 179 $ 109
(a) These charges are included in Impairments and other charges on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
(b) These charges are included in Income (loss) from discontinued operations, net on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
In addition, GEN-NE also included a $209 million ($129 million after-tax) impairment charge related to our Roseton and Danskammer power generation facilities as a result of continued weakening in forward capacity and forward power prices in certain of the markets in which we operate. This charge is included in Impairments and other charges on our Reported Unaudited Condensed Consolidated Statements of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
(3) We recognized pre-tax charges of approximately $433 million ($433 million after-tax) related to the impairment of our goodwill . These charges are included in Goodwill impairments on our Reported Unaudited Condensed Consolidated Statement of Operations and will be further described in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.
(4) We recognized a pre-tax gain of approximately $10 million ($6 million after-tax) on the sale of our Heard County power generation facility. This gain is included in Income (loss) from discontinued operations, net of tax on our Reported Unaudited Condensed Consolidated Statements of Operations.
(5) We recognized pre-tax income of approximately $20 million ($12 million after-tax) related to the change in fair value of the Sandy Creek Project interest rate swaps. This income is included in Earnings (losses) from unconsolidated investments on our Reported Unaudited Condensed Consolidated Statements of Operations.
(6) A reconciliation of EBITDA from discontinued operations to Loss from discontinued operations, net of tax, is presented below.
EBITDA from discontinued operations $ (217 )
Depreciation and amortization (15 )
expense from discontinued
operations
Income tax benefit from 91
discontinued operations
Loss from discontinued operations, $ (141 )
net of tax
(7) Includes additional expenses primarily due to $151 million nondeductible goodwill, $21 million due to a change in state income tax law and $10 million due to revised assumptions around the ability to utilize certain state deferred tax assets.
DYNEGY INC.
REPORTED SEGMENTED RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2008
(UNAUDITED) (IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Net income attributable to Dynegy Inc. $ 181
Plus / (Less):
Income tax expense 131
Interest expense 322
Depreciation and amortization expense 277
EBITDA (1) $ 685 $ 201 $ 87 $ (62 ) $ 911
Plus / (Less):
Gain on sale of Rolling Hills (2) (57 ) - - - (57 )
Release of state franchise tax and sales tax liabilities - - - (16 ) (16 )
(3)
Gain on sale of NYMEX shares (4) - - - (15 ) (15 )
Gain on sale of Sandy Creek ownership interest (5) - (13 ) - - (13 )
Gain on sale of Oyster Creek ownership interest (6) - (11 ) - - (11 )
Mark-to-market losses (gains), net (89 ) (44 ) 9 - (124 )
Adjusted EBITDA (1) $ 539 $ 133 $ 96 $ (93 ) $ 675
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of EBITDA to Operating income (loss) is presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating income (loss) as the most directly comparable GAAP measure.
Power Generation
GEN - MW GEN - WE GEN - NE OTHER Total
Operating income (loss) $ 529 $ 104 $ 41 $ (95 ) $ 579
Losses from unconsolidated investments - (7 ) - (10 ) (17 )
Other items, net - 5 5 36 46
Net loss attributable to the noncontrolling interests 3 - - - 3
Add: Depreciation and amortization expense 153 57 41 7 258
EBITDA from continuing operations 685 159 87 (62 ) 869
EBITDA from discontinued operations (7) - 42 - - 42
EBITDA $ 685 $ 201 $ 87 $ (62 ) $ 911
(2) We recognized a pre-tax gain of approximately $57 million ($32 million after-tax) on the sale of our Rolling Hills power generation facility. This gain is included in Gain on sale of assets on our Reported Unaudited Condensed Consolidated Statements of Operations.
(3) We recognized income related to a release of approximately $16 million ($10 million after-tax) of sales and use tax liability. This income is included in Operating and maintenance expense on our Reported Unaudited Condensed Consolidated Statements of Operations.
(4) We recognized a pre-tax gain of approximately $15 million ($9 million after-tax) on the sale of our NYMEX shares and two membership seats. This gain is included in Gain on sale of assets on our Reported Unaudited Condensed Consolidated Statements of Operations.
(5) We recognized equity earnings of approximately $13 million ($8 million after-tax) on the sale of an approximate 11 percent undivided interest in the Sandy Creek Project. This gain is included in Earnings (losses) from unconsolidated investments on our Reported Unaudited Condensed Consolidated Statements of Operations.
(6) We recognized a pre-tax gain of approximately $11 million ($7 million after-tax) on the sale of our beneficial interest in Oyster Creek. This gain is included in Gain on sale of assets on our Reported Unaudited Condensed Consolidated Statements of Operations.
(7) A reconciliation of EBITDA from discontinued operations to Income from discontinued operations, net of tax, is presented below.
EBITDA from discontinued operations $ 42
Depreciation and amortization expense from discontinued (19 )
operations
Income tax expense from discontinued operations (10 )
Income from discontinued operations, net of tax $ 13
DYNEGY INC.
SUMMARY CASH FLOW INFORMATION (1)
(UNAUDITED) (IN MILLIONS)
Nine Months Ended September 30, 2009 Nine Months Ended September 30, 2008
GEN OTHER Total GEN OTHER Total
Adjusted EBITDA (2) $ 831 $ (119 ) $ 712 $ 768 $ (93 ) $ 675
Interest payments - (231 ) (231 ) - (257 ) (257 )
Cash taxes - (3 ) (3 ) - (12 ) (12 )
Collateral (3) (95 ) - (95 ) (61 ) - (61 )
Working capital / non (46 ) (1 ) (47 ) 57 19 76
-cash adjustments /
other changes
Adjusted Cash Flow from Operations (4) 690 (354 ) 336 764 (343 ) 421
Maintenance capital (103 ) (5 ) (108 ) (83 ) (11 ) (94 )
expenditures
Environmental capital (241 ) - (241 ) (171 ) - (171 )
expenditures
Adjusted Free Cash Flow (4) $ 346 $ (359 ) $ (13 ) $ 510 $ (354 ) $ 156
Net cash used in Investing Activities $ (341 ) $ (108 )
Net cash provided by Financing Activities $ 47 $ 133
(1) This presentation is intended to demonstrate the relationship between the performance measure of Adjusted EBITDA and the liquidity measure of Adjusted Free Cash Flow. We believe it is useful to our analysts and investors to understand this relationship because it demonstrates how the cash generated by our operations is used to satisfy various liquidity requirements. This presentation is not intended to be a reconciliation of non-GAAP measures pursuant to Regulation G. Such reconciliations of these non-GAAP financial measures to GAAP measures can be found below.
(2) Adjusted EBITDA is a non-GAAP financial measure. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009 for definitions, utility and uses of such non-GAAP financial measures. Please see Reported Segmented Results of Operations for the nine months ended September 30, 2009 and September 30, 2008 for a reconciliation of Adjusted EBITDA to Net income (loss) attributable to Dynegy Inc.
(3) Collateral, including initial margin, includes the effect of cash inflows and outflows arising from the daily settlements of our exchange-traded or brokered commodity futures positions held with our futures clearing manager.
(4) Adjusted Cash Flow from Operations and Adjusted Free Cash Flow are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009 for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of Adjusted Cash Flow from Operations and Adjusted Free Cash Flow to Cash Flow from Operations is presented below.
Nine Months Ended September 30, 2009 Nine Months Ended September 30, 2008
GEN OTHER Total GEN OTHER Total
Cash Flow from $ 683 $ (379 ) $ 304 $ 757 $ (360 ) $ 397
Operations
Legal and regulatory 7 6 13 7 17 24
payments
Payment for JV - 19 19 - - -
Dissolution
Adjusted Cash Flow from 690 (354 ) 336 764 (343 ) 421
Operations
Maintenance capital (103 ) (5 ) (108 ) (83 ) (11 ) (94 )
expenditures
Environmental capital (241 ) - (241 ) (171 ) - (171 )
expenditures
Adjusted Free Cash Flow $ 346 $ (359 ) $ (13 ) $ 510 $ (354 ) $ 156
DYNEGY INC.
OPERATING DATA
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GEN - MW
Million Megawatt Hours Generated 6.7 7.2 19.2 18.5
In Market Availability for Coal Fired Facilities (1) 92 % 95 % 89 % 89 %
Average Capacity Factor for Combined Cycle Facilities (2) 38 % 28 % 32 % 17 %
Average Quoted On-Peak Market Power Prices ($/MWh) (3):
Cinergy (Cin Hub) $ 31 $ 74 $ 35 $ 73
Commonwealth Edison (NI Hub) $ 31 $ 73 $ 34 $ 72
PJM West $ 40 $ 95 $ 45 $ 91
Average On-Peak Market Spark Spreads ($/MWh) (4):
PJM West $ 16 $ 27 $ 13 $ 17
GEN - WE
Million Megawatt Hours Generated (5) 4.0 4.2 6.8 8.9
Average Capacity Factor for Combined Cycle Facilities (2) 60 % 66 % 36 % 47 %
Average Quoted On-Peak Market Power Prices ($/MWh) (3):
North Path 15 (NP 15) $ 38 $ 86 $ 36 $ 88
Average On-Peak Market Spark Spreads ($/MWh) (4):
North Path 15 (NP 15) $ 12 $ 25 $ 8 $ 20
GEN - NE
Million Megawatt Hours Generated 2.6 2.2 7.8 5.7
In Market Availability for Coal Fired Facilities (1) 95 % 93 % 94 % 92 %
Average Capacity Factor for Combined Cycle Facilities (2) 44 % 29 % 44 % 25 %
Average Quoted On-Peak Market Power Prices ($/MWh) (3):
New York - Zone G $ 44 $ 113 $ 50 $ 111
New York - Zone A $ 29 $ 76 $ 36 $ 73
Mass Hub $ 37 $ 95 $ 45 $ 100
Average On-Peak Market Spark Spreads ($/MWh) (4):
New York - Zone A $ 4 $ 10 $ 5 $ 2
Mass Hub $ 13 $ 28 $ 11 $ 25
Fuel Oil $ (72 ) $ (60 ) $ (45 ) $ (45 )
Average Natural Gas Price - Henry Hub ($/MMBtu) (6) $ 3.15 $ 9.10 $ 3.80 $ 9.67
(1) Reflects the percentage of generation available during periods when market prices are such that these units could be profitably dispatched.
(2) Reflects actual production as a percentage of available capacity.
(3) Reflects the average of day-ahead quoted prices for the periods presented and does not necessarily reflect prices realized by the Company.
(4) Reflects the simple average of the spark spread available to a 7.0MMBtu / MWh heat rate generator selling power at day-ahead prices and buying delivered natural gas or fuel oil at a daily cash market price and does not reflect spark spreads available to us.
(5) Includes our ownership percentage in the MWh generated by our GEN-WE investment in the Black Mountain power generation facility for the three and nine months ended September 30, 2009 and 2008, respectively.
(6) Reflects the average of daily quoted prices for the periods presented and does not reflect costs incurred by the Company.
DYNEGY INC.
2009 EARNINGS ESTIMATES(1)
(IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Adjusted Gross Margin (2) $ 845 $ 860 $ 260 $ 270 $ 290 $ 300 $ 1,395 $ 1,430 $ - $ - $ 1,395 $ 1,430
Operating Expenses (215 ) (225 ) (125 ) (125 ) (185 ) (180 ) (525 ) (530 ) - - (525 ) (530 )
General and Administrative Expense - - - - - - - - (175 ) (175 ) (175 ) (175 )
Adjusted EBITDA from discontinued operations - - 25 25 - - 25 25 - - 25 25
Losses From Unconsolidated Investments - - (10 ) (10 ) - - (10 ) (10 ) - - (10 ) (10 )
Other Items, Net - - - - - - - - 20 20 20 20
Adjusted EBITDA (2) $ 630 $ 635 $ 150 $ 160 $ 105 $ 120 $ 885 $ 915 $ (155 ) $ (155 ) $ 730 $ 760
2009 CASH FLOW ESTIMATES (1) (3)
(IN MILLIONS)
GEN OTHER Total
Adjusted EBITDA (2) $ 885 $ 915 $ (155 ) $ (155 ) $ 730 $ 760
Cash Interest Payments - - (430 ) (430 ) (430 ) (430 )
Cash Tax Payments - - (5 ) (5 ) (5 ) (5 )
Collateral (185 ) (185 ) - - (185 ) (185 )
Working Capital / Other Changes (40 ) (40 ) 5 5 (35 ) (35 )
Adjusted Cash Flow from Operations (4) 660 690 (585 ) (585 ) 75 105
Maintenance Capital Expenditures (185 ) (185 ) (10 ) (10 ) (195 ) (195 )
Environmental Capital Expenditures (280 ) (280 ) - - (280 ) (280 )
Capitalized Interest (25 ) (25 ) - - (25 ) (25 )
Adjusted Free Cash Flow (4) $ 170 $ 200 $ (595 ) $ (595 ) $ (425 ) $ (395 )
Net Cash Provided by Investing Activities $ 260 $ 260
Net Cash Used in Financing Activities $ (555 ) $ (555 )
(1) 2009 estimates are based on quoted forward commodity price curves using a $3.97/MMBtu gas price as of October 6, 2009. Actual results may vary materially from these
estimates based on changes in commodity prices, among other things, including operational activities, legal settlements, financing or investing activities and other
uncertain or unplanned items. Reduced 2009 and forward adjusted EBITDA or free cash flow could result from potential divestitures of (a) non-core assets where the
earnings potential is limited, or (b) assets where the value that can be captured through a divestiture is believed to outweigh the benefits of continuing to own or
operate such assets. Divestitures could also result in impairment charges.
(2) EBITDA, Adjusted EBITDA and Adjusted Gross Margin are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions,
utility and uses of such non-GAAP financial measures. Reconciliations of consolidated EBITDA and Adjusted EBITDA to NetLoss attributable to Dynegy Inc. and Adjusted Gross
Margin to Operating Income (loss)are presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating
Income (loss) as the most directly comparable GAAP measure. Accordingly, a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (loss) on a segment level is
also presented below.
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Operating Income (Loss) $ 75 $ 80 $ (320 ) $ (310 ) $ (470 ) $ (455 ) $ (715 ) $ (685 ) $ (185 ) $ (185 ) $ (900 ) $ (870 )
Earnings From Unconsolidated Investments - - 10 10 - - 10 10 - - 10 10
Other Items, Net - - - - - - - - 20 20 20 20
Add: Depreciation and Amortization Expense from continuing operations 230 230 60 60 50 50 340 340 10 10 350 350
EBITDA from continuing operations 305 310 (250 ) (240 ) (420 ) (405 ) (365 ) (335 ) (155 ) (155 ) (520 ) (490 )
EBITDA from discontinued operations (25 ) (25 ) (200 ) (200 ) - - (225 ) (225 ) - - (225 ) (225 )
EBITDA $ 280 $ 285 $ (450 ) $ (440 ) $ (420 ) $ (405 ) $ (590 ) $ (560 ) $ (155 ) $ (155 ) $ (745 ) $ (715 )
Plus / (Less):
Impairments from continuing operations $ 220 $ 220 $ 260 $ 260 $ 485 $ 485 $ 965 $ 965 $ - $ - $ 965 $ 965
Impairments from discontinued operations 25 25 235 235 - - 260 260 - - 260 260
Sandy Creek Mark-to-Market Gains - - (20 ) (20 ) - - (20 ) (20 ) - - (20 ) (20 )
Loss on Sale of Assets from continuing operations 75 75 85 85 - - 160 160 - - 160 160
Gain on Sale of Assets from discontinued operations - - (10 ) (10 ) - - (10 ) (10 ) - - (10 ) (10 )
Mark-to-Market Losses 30 30 50 50 40 40 120 120 - - 120 120
Adjusted EBITDA $ 630 $ 635 $ 150 $ 160 $ 105 $ 120 $ 885 $ 915 $ (155 ) $ (155 ) $ 730 $ 760
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Adjusted Gross Margin $ 845 $ 860 $ 260 $ 270 $ 290 $ 300 $ 1,395 $ 1,430 $ - $ - $ 1,395 $ 1,430
Impairments from continuing operations (220 ) (220 ) (260 ) (260 ) (485 ) (485 ) (965 ) (965 ) - - (965 ) (965 )
Loss on Sale of Assets from continuing operations (75 ) (75 ) (85 ) (85 ) - - (160 ) (160 ) - - (160 ) (160 )
Mark-to-Market Losses (30 ) (30 ) (50 ) (50 ) (40 ) (40 ) (120 ) (120 ) - - (120 ) (120 )
Operating Expenses (215 ) (225 ) (125 ) (125 ) (185 ) (180 ) (525 ) (530 ) - - (525 ) (530 )
Depreciation and Amortization Expense from continuing operations (230 ) (230 ) (60 ) (60 ) (50 ) (50 ) (340 ) (340 ) (10 ) (10 ) (350 ) (350 )
General and Administrative Expenses - - - - - - - - (175 ) (175 ) (175 ) (175 )
Operating Income (Loss) $ 75 $ 80 $ (320 ) $ (310 ) $ (470 ) $ (455 ) $ (715 ) $ (685 ) $ (185 ) $ (185 ) $ (900 ) $ (870 )
Total
Net loss attributable to Dynegy Inc. $ (1,155 ) $ (1,135 )
Add Back:
Income Tax Benefit (435 ) (425 )
Interest Expense and Debt Conversion Cost 480 480
Depreciation and Amortization Expense from continuing operations 350 350
Depreciation and Amortization Expense from discontinued operations 15 15
EBITDA $ (745 ) $ (715 )
Plus / (Less):
Impairments from continuing operations 965 965
Impairments from discontinued operations 260 260
Sandy Creek Mark-to-Market Gains (20 ) (20 )
Loss on Sale of Assets from continuing operations 160 160
Gain on Sale of Assets from discontinued operations (10 ) (10 )
Mark-to-Market Losses 120 120
Adjusted EBITDA $ 730 $ 760
(3) This presentation is not intended to be a reconciliation of non-GAAP measures pursuant to Regulation G.
(4) Adjusted Cash Flow from Operations and Adjusted Free Cash Flow are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of Adjusted Cash Flow from Operations and Adjusted Free Cash Flow to Cash Flow from Operations is presented below.
GEN OTHER Total
Cash Flow From Operations $ 650 $ 680 $ (605 ) $ (605 ) $ 45 $ 75
Legal and Regulatory Payments 10 10 - - 10 10
Payment for JV Dissolution - - 20 20 20 20
Adjusted Cash Flow From Operations 660 690 (585 ) (585 ) 75 105
Maintenance Capital Expenditures (185 ) (185 ) (10 ) (10 ) (195 ) (195 )
Environmental Capital Expenditures (280 ) (280 ) - - (280 ) (280 )
Capitalized Interest (25 ) (25 ) - - (25 ) (25 )
Adjusted Free Cash Flow $ 170 $ 200 $ (595 ) $ (595 ) $ (425 ) $ (395 )
DYNEGY INC.
2010 EARNINGS ESTIMATES (1)
(IN MILLIONS)
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Adjusted Gross Margin (2) $ 585 $ 680 $ 245 $ 255 $ 225 $ 245 $ 1,055 $ 1,180 $ - $ - $ 1,055 $ 1,180
Operating Expenses (215 ) (215 ) (115 ) (115 ) (165 ) (165 ) (495 ) (495 ) - - (495 ) (495 )
General and Administrative Expense - - - - - - - - (150 ) (150 ) (150 ) (150 )
Other Items, Net - - - - - - - - 15 15 15 15
Adjusted EBITDA (2) $ 370 $ 465 $ 130 $ 140 $ 60 $ 80 $ 560 $ 685 $ (135 ) $ (135 ) $ 425 $ 550
2010 CASH FLOW ESTIMATES (1) (3)
(IN MILLIONS)
GEN OTHER Total
Adjusted EBITDA (2) $ 560 $ 685 $ (135 ) $ (135 ) $ 425 $ 550
Cash Interest Payments - - (380 ) (380 ) (380 ) (380 )
Cash Tax Payments - - (5 ) (5 ) (5 ) (5 )
Working Capital / Other Changes (60 ) (60 ) 5 5 (55 ) (55 )
Adjusted Cash Flow from Operations (4) 500 625 (515 ) (515 ) (15 ) 110
Maintenance Capital Expenditures (110 ) (110 ) (10 ) (10 ) (120 ) (120 )
Environmental Capital Expenditures (200 ) (200 ) - - (200 ) (200 )
Capitalized Interest (25 ) (25 ) - - (25 ) (25 )
Adjusted Free Cash Flow (4) $ 165 $ 290 $ (525 ) $ (525 ) $ (360 ) $ (235 )
Net Cash Used in Investing Activities $ (345 ) $ (345 )
Net Cash Used in Financing Activities $ (65 ) $ (65 )
(1) 2010 estimates are based on quoted forward commodity price curves using a $6.15/MMBtu gas price as of October 6, 2009. Actual results may vary materially from these
estimates based on changes in commodity prices, among other things, including operational activities, legal settlements, financing or investing activities and other
uncertain or unplanned items. Reduced 2010 and forward adjusted EBITDA or free cash flow could result from potential divestitures of (a) non-core assets where the
earnings potential is limited, or (b) assets where the value that can be captured through a divestiture is believed to outweigh the benefits of continuing to own or
operate such assets. Divestitures could also result in impairment charges.
(2) EBITDA, Adjusted EBITDA and Adjusted Gross Margin are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions,
utility and uses of such non-GAAP financial measures. Reconciliations of consolidated EBITDA and Adjusted EBITDA to NetLoss attributable to Dynegy Inc. and Adjusted Gross
Margin to Operating Income (loss)are presented below. Management does not allocate interest expenses and income taxes on a segment level and therefore uses Operating
Income (loss) as the most directly comparable GAAP measure. Accordingly, a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (loss) on a segment level is
also presented below.
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Operating Income (Loss) $ 30 $ 125 $ 70 $ 80 $ 20 $ 40 $ 120 $ 245 $ (165 ) $ (165 ) $ (45 ) $ 80
Other Items, Net - - - - - - - - 15 15 15 15
Add: Depreciation and Amortization Expense 245 245 65 65 35 35 345 345 15 15 360 360
EBITDA from continuing operations 275 370 135 145 55 75 465 590 (135 ) (135 ) 330 455
EBITDA from discontinued operations - - - - - - - - - - - -
EBITDA $ 275 $ 370 $ 135 $ 145 $ 55 $ 75 $ 465 $ 590 $ (135 ) $ (135 ) $ 330 $ 455
Plus / (Less):
Mark-to-Market Losses 95 95 (5 ) (5 ) 5 5 95 95 - - 95 95
Adjusted EBITDA $ 370 $ 465 $ 130 $ 140 $ 60 $ 80 $ 560 $ 685 $ (135 ) $ (135 ) $ 425 $ 550
Power Generation
GEN - MW GEN - WE GEN - NE Total GEN OTHER Total
Adjusted Gross Margin $ 585 $ 680 $ 245 $ 255 $ 225 $ 245 $ 1,055 $ 1,180 $ - $ - $ 1,055 $ 1,180
Mark-to-Market Losses (95 ) (95 ) 5 5 (5 ) (5 ) (95 ) (95 ) - - (95 ) (95 )
Operating Expenses (215 ) (215 ) (115 ) (115 ) (165 ) (165 ) (495 ) (495 ) - - (495 ) (495 )
Depreciation and Amortization Expense (245 ) (245 ) (65 ) (65 ) (35 ) (35 ) (345 ) (345 ) (15 ) (15 ) (360 ) (360 )
General and Administrative Expenses - - - - - - - - (150 ) (150 ) (150 ) (150 )
Operating Income (Loss) $ 30 $ 125 $ 70 $ 80 $ 20 $ 40 $ 120 $ 245 $ (165 ) $ (165 ) $ (45 ) $ 80
Total
Net loss attributable to Dynegy Inc. $ (250 ) $ (175 )
Add Back:
Income Tax Benefit (155 ) (105 )
Interest Expense 375 375
Depreciation and Amortization Expense 360 360
EBITDA $ 330 $ 455
Plus / (Less):
Mark-to-Market Losses 95 95
Adjusted EBITDA $ 425 $ 550
(3) This presentation is not intended to be a reconciliation of non-GAAP measures pursuant to Regulation G.
(4) Adjusted Cash Flow from Operations and Adjusted Free Cash Flow are non-GAAP financial measures. Please refer to Item 2.02 of our Form 8-K filed on November 5, 2009, for definitions, utility and uses of such non-GAAP financial measures. A reconciliation of Adjusted Cash Flow from Operations and Adjusted Free Cash Flow to Cash Flow from Operations is presented below.
GEN OTHER Total
Cash Flow and Adjusted Cash Flow From Operations $ 500 $ 625 $ (515 ) $ (515 ) $ (15 ) $ 110
Maintenance Capital Expenditures (110 ) (110 ) (10 ) (10 ) (120 ) (120 )
Environmental Capital Expenditures (200 ) (200 ) - - (200 ) (200 )
Capitalized Interest (25 ) (25 ) - - (25 ) (25 )
Adjusted Free Cash Flow $ 165 $ 290 $ (525 ) $ (525 ) $ (360 ) $ (235 )
Dynegy Inc., Houston
Media: David Byford, 713-767-5800
or
Analysts: Laura Hrehor, 713-507-6466
Copyright Business Wire 2009
