Market Overview

Dynegy Announces 2017 Financial Results

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Dynegy Inc. (NYSE:DYN):

Summary of Fourth Quarter and Full-Year 2017 Financial Results (in
millions):

   

Three Months Ended
December 31,

     

Twelve Months Ended
December 31,

2017     2016 2017     2016
Operating Revenues $ 994 $ 1,107 $ 4,842 $ 4,318
Net Income (loss) $ (95 ) $ (182 ) $ 72 $ (1,244 )
Adjusted EBITDA (1) $ 293 $ 219 $ 1,160 $ 1,007
 
Operating Cash Flow $ 585 $ 645
Adjusted Free Cash Flow (1) $ 374 $ 263
 

2017 Highlights:

  • Announced strategic combination with Vistra Energy on October 30
  • Completed acquisition of ENGIE's U.S. portfolio on February 7;
    acquisition included more than 9,000 megawatts of predominately
    gas-fueled generating capacity in the ERCOT, ISO-NE, and PJM markets
  • Completed sales of five power generation facilities for approximately
    $780 million in cash, which, together with cash on hand, was used to
    repay $900 million in debt
  • Simplified Ohio joint operating unit structure by securing 100%
    ownership of Miami Fort and Zimmer facilities and divesting ownership
    share of Conesville facility
  • Reduced 2019 debt maturity from $2.1 billion to $850 million through a
    combination of repayments and refinancing
  • Completed Genco restructuring on February 2, eliminating $825 million
    of unsecured bonds in exchange for approximately $122 million in cash,
    $188 million of seven-year unsecured notes, and 9 million Dynegy
    common stock warrants
  • Achieved $89 million and $141 million, respectively, in EBITDA and
    balance sheet improvements through employee-driven PRIDE program;
    separately, launched Earnings and Cost Improvement (ECI) initiative
    with a target of more than $100 million in sustainable earnings
    improvements
  • Achieved top decile safety performance across the entire Company for
    the full year, Dynegy's top performance since 2010

__________________________________________

(1) Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial
measures, see "Regulation G Reconciliations" for further details.

Dynegy Inc. (NYSE:DYN) reported net income for 2017 of $72 million,
compared to a net loss of $1.24 billion for 2016. The year-over-year
increase was primarily driven by (i) a $228 million lower operating loss
primarily attributable to lower impairments, (ii) a $590 million
increase related to the extinguishment of debt associated with the Genco
bankruptcy, and (iii) a $565 million increase in tax benefits, partially
offset by a $79 million loss on the early extinguishment of debt.

The Company reported 2017 consolidated Adjusted EBITDA of $1.16 billion,
compared to $1.01 billion for 2016. The $153 million increase was
attributable to contributions from the newly acquired ENGIE plants,
higher capacity revenues across most of Dynegy's business segments, and
lower O&M costs as a result of unit shutdowns and fewer planned outages.
Partially offsetting this were lower energy margins, net of hedges, as a
result of decreased spark spreads at the PJM and NY/NE segments,
decreased dark spreads at the MISO segment, and lower retail
contribution at the PJM and MISO segments, all driven by milder weather.
Full-year results versus guidance reflect an approximately $70 million
unfavorable impact from asset sales and M&A timing during the year.

The Company reported a fourth quarter 2017 net loss of $95 million,
compared to a net loss of $182 million for 2016. The
quarter-over-quarter change was primarily driven by an increase in our
income tax benefit due to the partial release of our valuation allowance
as a result of the ENGIE acquisition and recognition of the benefit of
AMT credits that had previously been subject to a valuation allowance.
This change was partially offset by a loss attributable to the newly
acquired ENGIE plants.

The Company reported fourth quarter 2017 consolidated Adjusted EBITDA of
$293 million, compared to $219 million for the fourth quarter 2016 as
the newly acquired ENGIE plants and higher capacity revenues in the
NY/NE and PJM segments benefited results. Adjusted EBITDA during the
quarter was negatively impacted by weaker than expected commodity prices
in November and the first half of December, as well as higher accruals
related to cash-settled incentive compensation tied to Dynegy's common
stock price, which increased over 20% during the quarter, and
approximately 40% versus the prior year.

"Dynegy has a long list of accomplishments during 2017, including our
best safety performance since 2010. Over the course of the year, we made
substantial and dramatic changes to our portfolio in addition to
announcing our combination with Vistra. In addition to our portfolio
activities, we simultaneously strengthened our balance sheet over the
course of the year by utilizing asset sale proceeds, refinancing debt,
and restructuring our Genco subsidiary. Despite the loss of financial
contributions from the plants that were sold, we finished the year with
Adjusted Free Cash Flow comfortably within the guidance range which was
raised in May 2017 due to our disciplined focus on controlling costs and
agility to adapt to the changing portfolio and market place," said
Dynegy President and Chief Executive Officer Robert C. Flexon.

"In terms of our 2017 operational results, our fleet responded to the
challenging market conditions by operating safely and reliably serving
our customers and communities," Flexon continued. "Further, we advanced
our position of being the most efficient and lowest-cost platform in the
industry. Our PRIDE initiative is on track to exceed our three-year
EBITDA target of $250 million in 2018, with additional contributions
expected to follow through the Company's Earnings and Cost Improvement
initiative, which was launched in October 2017."

Full-Year Comparative Results

      Year Ended December 31,
2017     2016
(in millions)

Operating
Income (Loss)

    Adjusted EBITDA

Operating
Income (Loss)

    Adjusted EBITDA
PJM $ 192 $ 818 $ 414 $ 757
NY/NE (113 ) 293 (29 ) 171
ERCOT (147 ) 26
MISO (44 ) 152 (832 ) 129
CAISO (45 ) 19 (5 ) 59
Other (255 ) (148 ) (188 ) (109 )
Total $ (412 ) $ 1,160   $ (640 ) $ 1,007  
 

Segment Review of Results Year-over-Year

PJM - Operating income in 2017 totaled $192 million compared to
operating income of $414 million in 2016. Factors that led to the
decrease in operating income included a change in the mark-to-market
value of derivative transactions, lower spark spreads as a result of
higher gas costs and milder weather, the loss on the sale of assets, and
a lower retail contribution as a result of higher supply costs and
milder weather. Partially offsetting this were higher capacity revenues
and income attributable to the newly acquired ENGIE plants.

Adjusted EBITDA totaled $818 million during 2017 compared to $757
million in 2016. The increase was primarily due to the contribution from
the newly acquired ENGIE plants, higher capacity revenues, and lower O&M
costs, partially offset by lower generation volumes due to milder
weather.

NY/NE - The 2017 operating loss was $113 million compared to an
operating loss of $29 million for 2016. Factors that led to the higher
operating loss included a change in the mark-to-market value of
derivative transactions and a loss on the sale of the Dighton and
Milford facilities in Massachusetts, partially offset by higher capacity
revenues, lower depreciation costs, and income from the newly acquired
ENGIE plants.

Adjusted EBITDA totaled $293 million in 2017 compared to $171 million in
2016 primarily due to the contribution from the newly acquired ENGIE
plants.

ERCOT - Dynegy's ERCOT segment was initiated in February 2017
with the acquisition of ENGIE plants in Texas. The 2017 operating loss
of $147 million was primarily driven by mark-to-market losses on
derivative transactions and depreciation expenses.

Adjusted EBITDA totaled $26 million, with energy margin, net of hedges,
partially offset by O&M costs.

MISO - The 2017 operating loss was $44 million compared to an
operating loss of $832 million in 2016. The previous year results were
primarily driven by approximately $790 million in impairment charges.

Adjusted EBITDA totaled $152 million in 2017 compared to $129 million in
2016 due to higher capacity revenues that resulted from favorable
pricing and volumes.

CAISO - The 2017 operating loss was $45 million compared to an
operating loss of $5 million for 2016. The higher operating loss
resulted from lower capacity revenues due to lower contracted volumes
and prices and lower tolling revenue due to the expiration of a tolling
contract, partially offset by higher energy margin, net of hedges, as a
result of warmer weather.

Adjusted EBITDA totaled $19 million in 2017 compared to $59 million in
2016 as lower volumes and prices for capacity and the expiration of
tolling agreements impacted results.

Fourth Quarter Comparative Results

      Quarter Ended December 31,
2017     2016
(in millions)

Operating
Income (Loss)

    Adjusted EBITDA

Operating
Income (Loss)

    Adjusted EBITDA
PJM $

14

$ 216 $ 137 $ 181
NY/NE (41 ) 99 (7 ) 29
ERCOT (139 ) (12 )
MISO 6 28 (42 ) 28
CAISO (12 ) 5 (5 ) 14
Other (67 ) (43 ) (49 ) (33 )
Total $ (239 ) $ 293   $ 34   $ 219  
 

Segment Review of Results Quarter-over-Quarter

PJM - Operating income for the fourth quarter 2017 totaled $14
million compared to $137 million for the fourth quarter 2016. The
decrease was primarily due to a change in the mark-to-market value of
derivative transactions.

Adjusted EBITDA totaled $216 million in 2017 versus $181 million in 2016
as the contribution from the newly acquired ENGIE plants and higher
capacity revenues were partially offset by a lower retail contribution
due to higher supply costs and milder weather.

NY/NE - The fourth quarter 2017 operating loss was $41 million
compared to an operating loss of $7 million for the fourth quarter 2016.
The decrease was primarily due to a change in the mark-to-market value
of derivative transactions.

Adjusted EBITDA totaled $99 million in 2017 compared to $29 million in
2016. The increase was primarily due to the contribution from the newly
acquired ENGIE plants, higher capacity revenues, and lower O&M expenses.

ERCOT- The fourth quarter 2017 operating loss of $139 million was
primarily driven by mark-to-market losses on derivative transactions and
depreciation expenses, which more than offset positive energy margin.

Adjusted EBITDA totaled $(12) million as a result of O&M expenses
associated with plant outages, which more than offset positive energy
margin.

MISO - Operating income for the fourth quarter 2017 totaled $6
million compared to an operating loss of $42 million for the fourth
quarter 2016 as lower O&M and depreciation expenses benefited results.

Adjusted EBITDA remained unchanged at $28 million in 2017 and in 2016.

CAISO - The fourth quarter 2017 operating loss was $12 million
compared to a $5 million operating loss for the fourth quarter 2016 as
lower capacity and tolling revenue impacted results.

Adjusted EBITDA in 2017 was $5 million versus $14 million in 2016
primarily due to lower capacity and tolling revenue in the most recent
period.

Liquidity

Dynegy's total available liquidity is reflected in the table below.

        December 31, 2017
(amounts in millions) Dynegy Inc.
Revolving facilities and LC capacity (1) $ 1,650
Less:
Outstanding revolver draws
Outstanding LCs (438 )
Revolving facilities and LC availability 1,212
Cash and cash equivalents 365  
Total available liquidity $ 1,577  

________________________

(1) Includes $1.545 billion in senior secured revolving credit
facilities and $105 million related to letter of credit facilities
("LCs").

Consolidated Cash Flow

Cash provided by operations totaled $585 million for the full year of
2017. During the period, our power generation facilities and retail
operations provided cash of $1.25 billion. Corporate activities,
primarily related to general and administrative, interest, and
acquisition-related expenses, as well as other working capital changes,
used cash of $669 million during the period.

Cash used in investing activities totaled $2.76 billion for the full
year of 2017 as Dynegy used $3.25 billion at the ENGIE acquisition
closing, $70 million, including $20 million in working capital, for the
purchase of interest in Miami Fort and Zimmer from AES, and invested
$224 million in capital expenditures, offset by $773 million in proceeds
received from asset sales, in addition to $12 million in distributions
received from our unconsolidated investments in the Bellingham NEA and
Sayreville facilities.

Cash used in financing activities totaled $1.3 billion for the full year
of 2017 primarily as a result of the remaining payment obligations
relating to the purchase of Energy Capital Partners' (ECP) interest in
Atlas Power, payments related to our Illinois Power Generating Company
subsidiary's (Genco) emergence from bankruptcy, and the repayment of the
outstanding revolving credit facility, as well as various other
financing activities.

Capital Structure

During 2017 numerous steps were taken to streamline and strengthen
Dynegy's capital structure including:

  • Used asset sale proceeds, cash on hand, and proceeds from an $850
    million bond offering to repay/refinance $1.75 billion in debt;
  • Restructuring the Genco subsidiary, eliminated $825 million of Genco
    senior notes in exchange for approximately $122 million in cash, $188
    million of seven-year unsecured notes, and 9 million Dynegy common
    stock warrants; and
  • Added more flexibility and improved the terms of our Credit Agreement
    by executing amendments to increase its capacity, extend its maturity
    date, and reduce the interest rate margin by 125 basis points.

Commodity Pricing and Impact of Hedges

Throughout the fourth quarter of 2017, Dynegy continued to actively
hedge its fleet for 2018 and 2019, taking advantage of a rise in forward
commodity prices experienced in late 2017. In the fourth quarter of
2017, forward pricing for 2018 and 2019 improved in many of Dynegy's key
markets as both spark and dark spreads expanded. This improved outlook
has resulted in an increase in forecasted run times as plants are now
more deeply in the money. Gross margin is expected to increase as
Dynegy's generation facilities are now projected to run more hours at
higher prices.

As of February 8, 2018, Dynegy's 2018 generation volumes hedged in the
key markets of PJM, NY/NE, ERCOT, and MISO stood at 78%, 64%, 74%, and
75%, respectively. In 2019, hedging in the same markets is at 40%, 19%,
26%, and 39%, respectively.

As we move forward, we will continue to look for opportunities to hedge
future generation at advantageous levels.

Recent Developments

Vistra Merger

On October 29, 2017, Dynegy and Vistra Energy Corp. entered into a
Merger Agreement that has been approved by the boards of directors of
both companies. Dynegy will merge with and into Vistra Energy in a
tax-free, all-stock transaction.

We expect the transaction to close in the second quarter of 2018 after
meeting the remaining customary conditions including stockholder
approval and receiving the required regulatory approvals, including the
Federal Energy Regulatory Commission, the Public Utility Commission of
Texas, and the New York Public Service Commission.

Tax Reform Act

The Tax Cuts and Jobs Act (TCJA), enacted on December 22, 2017, reduces
the U.S. federal corporate tax rate from 35% to 21%. This resulted in a
reduction to our net deferred tax assets with a corresponding reduction
to our valuation allowance. The TCJA also repealed the corporate
Alternative Minimum Tax (AMT), which resulted in a $223 million tax
benefit for Dynegy. As prescribed by the TCJA, and unless used to offset
a cash tax liability, Dynegy will receive the cash refunds of our
existing AMT credits beginning in 2019, for the 2018 tax year, through
2022. Estimated cash refunds by year: 2019 - $112 million; 2020 - $56
million; 2021 - $28 million; 2022 - $27 million.

ENGIE Acquisition

On February 7, 2017, Dynegy completed its acquisition of ENGIE's US
portfolio, which included more than 9,000 megawatts of generation
facilities for a base purchase price of approximately $3.3 billion. The
plants acquired included 15 natural gas-fueled facilities in Illinois,
Massachusetts, New Jersey, Ohio, Pennsylvania, Texas, Virginia, and West
Virginia, as well as one coal-fueled facility in Texas and a
waste-coal-fueled facility in Pennsylvania.

Portfolio Changes

During 2017, Dynegy sold its Armstrong (Pennsylvania), Dighton
(Massachusetts), Lee (Illinois), Milford (Massachusetts), and Troy
(Ohio) facilities. In addition, Dynegy sold its 40 percent ownership
interest in the Conesville facility in Ohio and, through separate
transactions with AEP and AES, raised its ownership in the Miami Fort
and Zimmer facilities in Ohio to 100%.

PRIDE Update and Earnings and Cost Improvement Project

Dynegy's PRIDE (Producing Results through Innovation by Dynegy
Employees) program was launched in 2011 with a focus on optimizing our
cost structure, implementing company-wide process and operating
improvements, and improving balance sheet efficiency. In 2017 the
program exceeded its balance sheet target of $100 million by $41 million
and its EBITDA target of $65 million by $24 million.

Dynegy introduced its Earnings and Cost Improvement (ECI) project in the
fourth quarter 2017 to identify and implement practices that promote
leading practices across key areas of our power generation fleet. The
initiative is driven by employees with assistance from a third-party
consultant. ECI's target is more than $100 million in sustainable
earnings improvements.

Retail Business Expansion

The retail business continued its effort to expand into new markets
during 2017 by serving new municipal aggregation customers in
Massachusetts and through commercial and industrial sales in the
Pennsylvania market for 2018 delivery. Retail now serves customers in
Illinois, Massachusetts, Ohio, and Pennsylvania. Retail delivered
volumes in 2017 were 26,000 gigawatt-hours to its approximately 1.2
million residential and business customers.

Safety

Dynegy's safety performance for the full-year 2017 was in the top decile
for the industry. Both coal and gas facilities are focused on intensive
safety initiatives that help drive safety culture. A total of seven
Dynegy plants have achieved STAR Program status through the Occupational
Safety and Health Administration's Voluntary Protection Program (VPP).
Dynegy is committed to having all of its plants go through the VPP
auditing process in the next several years.

About Dynegy

Throughout the Northeast, Mid-Atlantic, Midwest, Texas and
California, Dynegy operates nearly 28,000 megawatts (MW) of power
generating facilities capable of producing enough energy to supply more
than 23 million American homes. Through our retail business, we serve
1.2 million customers who depend on reliable, affordable energy to grow
and thrive.

Forward-Looking Statement

This news release contains statements reflecting assumptions,
expectations, projections, intentions or beliefs about future events
that are intended as "forward-looking statements," particularly those
statements concerning Dynegy's beliefs and expectations regarding its
platform position in the industry; execution of Dynegy's PRIDE Energized
targets and its Earnings and Cost Improvement initiative in 2018;
anticipated earnings and cash flows; Dynegy's proposed merger into
Vistra Energy, including stockholder and regulatory approvals and timing
of closing; and achievement of OSHAs VPP auditing process of all Dynegy
plants within the next several years. Historically, Dynegy's performance
has deviated, in some cases materially, from its cash flow and earnings
guidance. Discussion of risks and uncertainties that could cause actual
results to differ materially from current projections, forecasts,
estimates and expectations of Dynegy is contained in Dynegy's filings
with the Securities and Exchange Commission (SEC). Specifically, Dynegy
makes reference to, and incorporates herein by reference, the section
entitled "Risk Factors" in its 2017 Form 10-K (when filed). Any or all
of Dynegy's forward-looking statements may turn out to be wrong. They
can be affected by inaccurate assumptions or by known or unknown risks,
uncertainties and other factors, many of which are beyond Dynegy's
control. In addition to the risks and uncertainties set forth in
Dynegy's SEC filings, the forward-looking statements described in this
press release could be affected by, among other things, (i) expectations
regarding the Merger, including beliefs concerning stockholder and
regulatory approvals; (ii) the occurrence of any event that could give
rise to the termination of the Merger Agreement, including a termination
of the Merger Agreement under circumstances that could require us to pay
a termination fee; (iii) expectations regarding anticipated benefits of
the Merger; (iv) beliefs and assumptions about weather and general
economic conditions; (v) beliefs, assumptions, and projections regarding
the demand for power, generation volumes, and commodity pricing,
including natural gas prices and the timing of a recovery in power
market prices, if any; (vi) beliefs and assumptions about market
competition, generation capacity, and regional supply and demand
characteristics of the wholesale and retail power markets, including the
anticipation of plant retirements and higher market pricing over the
longer term; (vii) sufficiency of, access to, and costs associated with
coal, fuel oil, and natural gas inventories and transportation thereof;
(viii) the effects of, or changes to the power and capacity procurement
processes in the markets in which we operate; (ix) expectations
regarding, or impacts of, environmental matters, including costs of
compliance, availability and adequacy of emission credits, and the
impact of ongoing proceedings and potential regulations or changes to
current regulations, including those relating to climate change, air
emissions, cooling water intake structures, coal combustion byproducts,
and other laws and regulations that we are, or could become, subject to,
which could increase our costs, result in an impairment of our assets,
cause us to limit or terminate the operation of certain of our
facilities, or otherwise have a negative financial effect; (x) beliefs
about the outcome of legal, administrative, legislative, and regulatory
matters, including any impacts from the change in administration to
these matters; (xi) projected operating or financial results, including
anticipated cash flows from operations, revenues, and profitability;
(xii) our focus on safety and our ability to operate our assets
efficiently so as to capture revenue generating opportunities and
operating margins; (xiii) our ability to mitigate forced outage risk,
including managing risk associated with CP in PJM and performance
incentives in ISO-NE; (xiv) our ability to optimize our assets through
targeted investment in cost effective technology enhancements; (xv) the
effectiveness of our strategies to capture opportunities presented by
changes in commodity prices and to manage our exposure to energy price
volatility; (xvi) efforts to secure retail sales and the ability to grow
the retail business; (xvii) efforts to identify opportunities to reduce
congestion and improve busbar power prices; (xviii) ability to mitigate
impacts associated with expiring reliability must run "RMR" and/or
capacity contracts; (xix) expectations regarding our compliance with the
Credit Agreement, including collateral demands, interest expense, any
applicable financial ratios, and other payments; (xx) expectations
regarding performance standards and capital and maintenance
expenditures; (xxi) the timing and anticipated benefits to be achieved
through our PRIDE and ECI initiatives; (xxii) expectations regarding
strengthening the balance sheet, managing debt and improving Dynegy's
leverage profile; (xxiii) anticipated timing, outcome, and impact of our
expected retirements; and (xxiv) beliefs about the costs and scope of
ongoing demolition and site remediation efforts. Any or all of Dynegy's
forward-looking statements may turn out to be wrong. They can be
affected by inaccurate assumptions or by known or unknown risks,
uncertainties, and other factors, many of which are beyond Dynegy's
control.

     

DYNEGY INC.

REPORTED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA)

 
Twelve Months Ended December 31,
2017       2016
Revenues $ 4,842 $ 4,318
Cost of sales, excluding depreciation expense (2,932 ) (2,281 )
Gross margin 1,910 2,037
Operating and maintenance expense (995 ) (940 )
Depreciation expense (811 ) (689 )
Impairments (148 ) (858 )
Loss on sale of assets, net (122 ) (1 )
General and administrative expense (189 ) (161 )
Acquisition and integration costs (57 ) (11 )
Other   (17 )
Operating loss (412 ) (640 )
Bankruptcy reorganization items 494 (96 )
Earnings from unconsolidated investments 8 7
Interest expense (616 ) (625 )
Loss on early extinguishment of debt (79 )
Other income and expense, net 67   65  
Loss before income taxes (538 ) (1,289 )
Income tax benefit 610   45  
Net income (loss) 72 (1,244 )
Less: Net loss attributable to noncontrolling interest (4 ) (4 )
Net income (loss) attributable to Dynegy Inc. 76 (1,240 )
Less: Dividends on preferred stock 18   22  
Net income (loss) attributable to Dynegy Inc. common stockholders $ 58   $ (1,262 )
 
Earnings (Loss) Per Share:
Basic and diluted earnings (loss) per share attributable to Dynegy
Inc. common stockholders
$ 0.37 $ (9.78 )
Diluted earnings (loss) per share attributable to Dynegy Inc. common
stockholders
$ 0.36 $ (9.78 )
 
Basic shares outstanding 155 129
Diluted shares outstanding 162 129
 

The following table reflects the significant components of our weighted
average shares outstanding used in basic and diluted loss per share
calculations for the twelve months ended December 31, 2017 and 2016:

     
Twelve Months Ended

December 31,

(in millions, except per share amounts) 2017     2016
Shares outstanding at the beginning of the period 140 117
Weighted-average shares during the period of:
Shares issuances 13
Shares converted from preferred stock 2
Prepaid stock purchase contract (TEUs) (1)   12
Basic weighted-average shares 155 129
Dilution from potentially dilutive shares (2) 7  
Diluted weighted-average shares (3) 162   129

___________________________________

  (1)   The minimum settlement amount, or 23.1 million shares, are
considered to be outstanding since June 21, 2016 and are included in
the computation of basic earnings (loss) per share.
(2) Shares included in the computation of diluted earnings per share for
the year ended December 31, 2017 consist of:
  • 5.4 million additional shares upon settlement of the TEUs - which
    reflects the difference between the minimum settlement amount included
    in basic weighted-average shares outstanding and the maximum
    settlement amount (28.5 million shares); and
  • 1.9 million additional shares attributable to restricted stock units
    and performance stock units.
  (3)   Entities with a net loss from continuing operations are prohibited
from including potential common shares in the computation of diluted
per share amounts. Accordingly, we have utilized the basic shares
outstanding amount to calculate both basic and diluted loss per
share for the twelve months ended December 31, 2016.
 

DYNEGY INC.

OPERATING DATA

 

The following table provides summary financial data regarding our
PJM, NY/NE, ERCOT, MISO, and CAISO segment results of operations
for the three and twelve months ended December 31, 2017 and 2016,
respectively.

               

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2017 2016 2017 2016
PJM
Million Megawatt Hours Generated (1) 14.0 13.5 52.8 52.8
IMA (1)(2):
Combined Cycle Facilities 98 % 97 % 95 % 97 %
Coal-Fueled Facilities 73 % 78 % 75 % 80 %
Average Capacity Factor (1)(3):
Combined Cycle Facilities 66 % 73 % 64 % 74 %
Coal-Fueled Facilities 65 % 58 % 56 % 53 %
CDDs (4) 57 40 1,143 1,417
HDDs (4) 1,798 1,663 4,403 4,719
Average Market On-Peak Spark Spreads ($/MWh) (5):
PJM West $ 17.22 $ 19.11 $ 16.90 $ 22.62
AD Hub $ 22.69 $ 20.18 $ 19.22 $ 22.52
Average Market On-Peak Power Prices ($/MWh) (6):
PJM West $ 36.65 $ 34.31 $ 34.38 $ 34.65
AD Hub $ 34.74 $ 33.76 $ 34.00 $ 32.93
Average natural gas price—TetcoM3 ($/MMBtu) (7) $ 2.78 $ 2.17 $ 2.50 $ 1.72
 
NY/NE
Million Megawatt Hours Generated (1) 4.6 3.8 19.2 16.9
IMA for Combined Cycle Facilities (1)(2) 96 % 97 % 96 % 96 %
Average Capacity Factor for Combined Cycle Facilities (1)(3) 45 % 43 % 43 % 48 %
CDDs (4) 35 10 721 884
HDDs (4) 1,951 1,935 5,495 5,593
Average Market On-Peak Spark Spreads ($/MWh) (5):
New York—Zone C $ 19.18 $ 13.74 $ 14.78 $ 16.46
Mass Hub $ 13.49 $ 11.72 $ 12.09 $ 13.80
Average Market On-Peak Power Prices ($/MWh) (6):
New York—Zone C $ 31.22 $ 27.32 $ 29.56 $ 26.88
Mass Hub $ 49.41 $ 38.74 $ 37.83 $ 35.52
Average natural gas price—Algonquin Citygates ($/MMBtu) (7) $ 5.13 $ 3.86 $ 3.68 $ 3.10
 
ERCOT
Million Megawatt Hours Generated (1) 2.2 11.0
IMA (1)(2):
Combined-Cycle Facilities 96 % % 94 % %
Coal-Fired Facility 100 % % 96 % %
Average Capacity Factor (1)(3):
Combined-Cycle Facilities 11 % % 25 % %
Coal-Fired Facility 77 % % 67 % %
CDDs (4) 364 446 3,390 3,355
HDDs (4) 581 435 1,090 1,222
Average Market On-Peak Spark Spreads ($/MWh) (5):
ERCOT North $ 6.65 $ 7.38 $ 7.79 $ 9.79
Average Market On-Peak Power Prices ($/MWh) (6):
ERCOT North $ 24.28 $ 26.91 $ 26.45 $ 26.02
Average natural gas price—Waha Hub ($/MMBtu) (7) $ 2.52 $ 2.79 $ 2.67 $ 2.32
 
MISO
Million Megawatt Hours Generated 7.7 7.0 29.1 29.8
IMA for Coal-Fueled Facilities (2) 90 % 88 % 89 % 89 %
Average Capacity Factor for Coal-Fueled Facilities (3) 66 % 60 % 63 % 53 %
CDDs (4) 105 123 1,272 1,652
HDDs (4) 1,924 1,656 4,534 4,662
Average Market On-Peak Power Prices ($/MWh) (6):
Indiana (Indy Hub) $ 32.71 $ 37.89 $ 34.36 $ 33.71
Commonwealth Edison (NI Hub) $ 31.65 $ 33.28 $ 32.28 $ 31.98
 
CAISO
Million Megawatt Hours Generated 0.8 0.6 2.3 2.6
IMA for Combined Cycle Facilities (2) 93 % 95 % 92 % 96 %
Average Capacity Factor for Combined Cycle Facilities (3) 37 % 26 % 26 % 27 %
CDDs (4) 211 160 1,337 1,211
HDDs (4) 400 481 1,233 1,218
Average Market On-Peak Spark Spreads ($/MWh) (5):
North of Path 15 (NP 15) $ 19.82 $ 13.71 $ 15.38 $ 12.67
Average Market On-Peak Spark Spreads ($/MWh) (6):
North of Path 15 (NP 15) $ 41.22 $ 36.61 $ 38.02 $ 31.60
Average natural gas price—PG&E Citygate ($/MMBtu) (7) $ 3.06 $ 3.27 $ 3.23 $ 2.70

__________________________________________

  (1)   Includes the activity of the assets acquired in the ENGIE
Acquisition for our period of ownership. Million Megawatt Hours
Generated and Average Capacity Factor include such activity for the
full month of February. IMA excludes such activity for our period of
ownership in February.
(2) IMA is an internal measurement calculation that reflects the
percentage of generation available during periods when market prices
are such that these units could be profitably dispatched. The
calculation excludes certain events outside of management control
such as weather-related issues. The calculation excludes Brayton
Point and CTs.
(3) Reflects actual production as a percentage of available capacity.
The calculation excludes Brayton Point and CTs.
(4) Reflects CDDs or HDDs for the PJM, ISO-NE, ERCOT, MISO, and CAISO
Regions based on NOAA data.
(5) Reflects the average of the on-peak spark spreads available to a 7.0
MMBtu/MWh heat rate generator selling power at day-ahead prices and
buying delivered natural gas at a daily cash market price and does
not reflect spark spreads available to us.
(6) Reflects the average of day-ahead quoted prices for the periods
presented and does not necessarily reflect prices we realized.
(7) Reflects the average of daily quoted prices for the periods
presented and does not reflect costs incurred by us.
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED EBITDA

TWELVE MONTHS ENDED DECEMBER 31, 2017

(UNAUDITED) (IN MILLIONS)

 

The following table provides summary financial data regarding our
Adjusted EBITDA by segment for the twelve months ended
December 31, 2017:

 

   
Twelve Months Ended December 31, 2017
PJM     NY/NE     ERCOT     MISO     CAISO     Other     Total
Net income $ 72
Plus / (Less):
Income tax benefit (610 )
Other income and expense, net (67 )
Loss on early extinguishment of debt 79
Interest expense 616
Earnings from unconsolidated investments (8 )
Bankruptcy reorganization items (494 )
Operating income (loss) $ 192 $ (113 ) $ (147 ) $ (44 ) $ (45 ) $ (255 ) $ (412 )
Depreciation and amortization expense 390 232 74 91 57 7 851
Bankruptcy reorganization items 494 494
Earnings from unconsolidated investments 3 5 8
Loss on early extinguishment of debt (79 ) (79 )
Other income and expense, net 16       26     25   67  
EBITDA (1) 601 124 (73 ) 567 12 (302 ) 929
Plus / (Less):
Adjustments to reflect Adjusted EBITDA from unconsolidated
investments and exclude noncontrolling interest
5 2 2 9
Acquisition, integration and restructuring costs 74 74
Bankruptcy reorganization items (494 ) (494 )
Mark-to-market adjustments, including warrants 125 75 99 (21 ) 7 (16 ) 269
Impairments 49 99 148
Loss (gain) on sale of assets, net 36 90 (1 ) 125
Loss on early extinguishment of debt 79 79
Non-cash compensation expense 1 20 21
Other 2   2     (1 )   (3 )  
Adjusted EBITDA (1) $ 818 $ 293 $ 26 $ 152 $ 19 $ (148 ) $ 1,160
_________________________________________

 

  (1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please
refer to Item 2.02 of our Form 8-K filed on February 21, 2018, for
definitions, utility and uses of such non-GAAP financial measures. A
reconciliation of EBITDA to Operating income (loss) is presented
above. Management does not allocate G&A, interest expense and income
taxes on a segment level and therefore uses Operating income (loss)
as the most directly comparable GAAP measure.
 
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED EBITDA

TWELVE MONTHS ENDED DECEMBER 31, 2016

(UNAUDITED) (IN MILLIONS)

 

The following table provides summary financial data regarding our
Adjusted EBITDA by segment for the twelve months ended
December 31, 2016:

                                   
PJM     NY/NE     MISO     CAISO     Other     Total
Net loss $ (1,244 )
Plus / (Less):
Income tax benefit (45 )
Other income and expense, net (65 )
Interest expense 625
Earnings from unconsolidated investments (7 )
Bankruptcy reorganization items 96  
Operating income (loss) $ 414 $ (29 ) $ (832 ) $ (5 ) $ (188 ) $ (640 )
Depreciation and amortization expense 349 243 87 53 5 737
Bankruptcy reorganization items (96 ) (96 )
Earnings from unconsolidated investments 7 7
Other income and expense, net 9   1   15   12   28   65  
EBITDA (1) 779 215 (826 ) 60 (155 ) 73
Plus / (Less):
Adjustments to reflect Adjusted EBITDA from unconsolidated
investment and exclude noncontrolling interest
2

 

2
Acquisition, integration and restructuring costs (8 ) 29 21
Bankruptcy reorganization items 96 96
Mark-to-market adjustments, including warrants (92 ) (44 ) 47 (6 ) (95 )
Impairments 65 793 858
Loss (gain) on sale of assets, net (1 ) 2 1
Non-cash compensation expense 6 22 28
Other (2) 5     20   (1 ) (1 ) 23  
Adjusted EBITDA (1) $ 757   $ 171   $ 129   $ 59   $ (109 ) $ 1,007  

__________________________________________

  (1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please
refer to Item 2.02 of our Form 8-K filed on February 21, 2018, for
definitions, utility and uses of such non-GAAP financial measures. A
reconciliation of EBITDA to Operating income (loss) is presented
above. Management does not allocate G&A, interest expense and income
taxes on a segment level and therefore uses Operating income (loss)
as the most directly comparable GAAP measure.
(2) Other includes an adjustment to exclude Wood River's energy margin
and O&M costs of $23 million.
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED EBITDA

THREE MONTHS ENDED DECEMBER 31, 2017

(UNAUDITED) (IN MILLIONS)

 

The following table provides summary financial data regarding our
Adjusted EBITDA by segment for the three months ended December 31,
2017:

   
Three Months Ended December 31, 2017
PJM     NY/NE     ERCOT     MISO     CAISO     Other     Total
Net loss $ (95 )
Plus / (Less):
Income tax benefit (280 )
Loss on early extinguishment of debt 4
Other income and expense, net (2 )
Interest expense 138
Earnings from unconsolidated investments (4 )
Operating income (loss) $ 14 $ (41 ) $ (139 ) $ 6 $ (12 ) $ (67 ) $ (239 )
Depreciation and amortization expense 97 53 19 19 13 1 202
Earnings from unconsolidated investments 1 3 4
Loss on early extinguishment of debt (4 ) (4 )
Other income and expense, net           2   2  
EBITDA (1) 112 15 (120 ) 25 1 (68 ) (35 )
Plus / (Less):
Adjustments to reflect Adjusted EBITDA from unconsolidated
investments and exclude noncontrolling interest
1 3 4
Acquisition, integration and restructuring costs 19 19
Mark-to-market adjustments, including warrants 97 69 108 (1 ) 4 277
Loss on sale of assets, net 5 13 18
Loss on early extinguishment of debt 4 4
Non-cash compensation expense 1 4 5
Other 1   2         (2 ) 1  
Adjusted EBITDA (1) $ 216   $ 99   $ (12 ) $ 28   $ 5   $ (43 ) $ 293  

__________________________________________

  (1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please
refer to Item 2.02 of our Form 8-K filed on February 21, 2018, for
definitions, utility and uses of such non-GAAP financial measures. A
reconciliation of EBITDA to Operating income (loss) is presented
above. Management does not allocate G&A, interest expense and income
taxes on a segment level and therefore uses Operating income (loss)
as the most directly comparable GAAP measure.
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED EBITDA

THREE MONTHS ENDED DECEMBER 31, 2016

(UNAUDITED) (IN MILLIONS)

   

The following table provides summary financial data regarding our
Adjusted EBITDA by segment for the three months ended December 31,
2016:

 
Three Months Ended December 31, 2016
PJM     NY/NE     MISO     CAISO     Other     Total
Net loss $ (182 )
Plus / (Less):
Income tax benefit (51 )
Other income and expense, net (5 )
Interest expense 176
Earnings from unconsolidated investments
Bankruptcy reorganization items 96  
Operating income (loss) $ 137 $ (7 ) $ (42 ) $ (5 ) $ (49 ) $ 34
Depreciation and amortization expense 90 53 44 19 2 208
Bankruptcy reorganization items (96 ) (96 )
Earnings from unconsolidated investments
Other income and expense, net   1       4   5  
EBITDA (1) 227 47 (94 ) 14 (43 ) 151
Plus / (Less):
Adjustment to reflect Adjusted EBITDA from unconsolidated investment
and exclude noncontrolling interest
2 2
Acquisition and integration costs 8 8
Bankruptcy reorganization items 96 96
Mark-to-market adjustments, including warrants (49 ) (17 ) 17 1 (1 ) (49 )
Impairments 1 1
Loss on sale of assets, net 2 2
Non-cash compensation expense 6 4 10
Other (2) 2   (1 ) 1   (1 ) (3 ) (2 )
Adjusted EBITDA (1) $ 181   $ 29   $ 28   $ 14   $ (33 ) $ 219  

__________________________________________

  (1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please
refer to Item 2.02 of our Form 8-K filed on February 21, 2018, for
definitions, utility and uses of such non-GAAP financial measures. A
reconciliation of EBITDA to Operating income (loss) is presented
above. Management does not allocate G&A, interest expense and income
taxes on a segment level and therefore uses Operating income (loss)
as the most directly comparable GAAP measure.
(2) Other includes an adjustment to exclude Wood River's energy margin
and O&M costs of $2 million.
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED FREE CASH FLOW (1)

TWELVE MONTHS ENDED DECEMBER 31, 2017

(UNAUDITED) (IN MILLIONS)

     
Adjusted EBITDA (2) $ 1,160
Interest payments (567 )
Acquisition and integration payments (55 )
Adjustment related to acquired derivatives (42 )
Collateral, working capital and other 89  
Net cash provided by operating activities 585
Capital expenditures (249 )
Acquisition and integration payments 55
Adjustment related to acquired derivatives 42
Interest rate swap settlement payments (20 )
Collateral, working capital and other (39 )
Adjusted Free Cash Flow (2) $ 374  
 
Capital expenditures $ (224 )
Acquisitions, net of cash acquired (3,319 )
Distributions from unconsolidated investments 12
Proceeds from asset sales, net 772  
Net cash used in investing activities $ (2,759 )
 
Proceeds from long-term borrowings, net of debt issuance costs $ 1,743
Repayments of borrowings (2,589 )
Proceeds from issuance of equity, net of issuance costs 150
Payments of debt extinguishment costs (50 )
Preferred stock dividends paid (22 )
Interest rate swap settlement payments (20 )
Acquisition of noncontrolling interest (375 )
Payments related to bankruptcy settlement (133 )
Other financing (3 )
Net cash used in financing activities $ (1,299 )

__________________________________________

  (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. A reconciliation of Adjusted
Free Cash Flow from Net cash provided by operating activities is
presented above. Please refer to Item 2.02 of our Form 8-K filed on
February 21, 2018, for definitions, utility and uses of such
non-GAAP financial measures.
(2) Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial
measures. Please refer to Item 2.02 of our Form 8-K filed on
February 21, 2018, for definitions, utility and uses of such
non-GAAP financial measures. See Regulation G Reconciliations -
Adjusted EBITDA for the twelve months ended December 31, 2017 for a
reconciliation of Adjusted EBITDA to Net income.
 

DYNEGY INC.

REG G RECONCILIATIONS - ADJUSTED FREE CASH FLOW (1)

TWELVE MONTHS ENDED DECEMBER 31, 2016

(UNAUDITED) (IN MILLIONS)

     
Adjusted EBITDA (2) $ 1,007
Interest payments (558 )
Acquisition and integration payments (19 )
Adjustment related to acquired derivatives (47 )
Collateral, working capital and other 262  
Net cash provided by operating activities 645
Capital expenditures (228 )
Acquisition related payments 73
Adjustment related to acquired derivatives 47
Interest rate swap settlement payments (17 )
Collateral, working capital and other (257 )
Adjusted Free Cash Flow (2) $ 263  
 
Capital expenditures $ (293 )
Distributions from unconsolidated affiliates 14
Proceeds from asset sales, net 176
Other investing 10  
Net cash used in investing activities $ (93 )
 
Proceeds from long-term borrowings, net of debt issuance costs $ 3,014
Repayments of borrowings (589 )
Proceeds from issuance of equity, net of issuance costs 359
Preferred stock dividends paid (22 )
Interest rate swap settlement payments (17 )
Other financing (3 )
Net cash provided by financing activities $ 2,742  

__________________________________________

  (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. A reconciliation of Adjusted
Free Cash Flow from Net cash provided by operating activities is
presented above. Please refer to Item 2.02 of our Form 8-K filed on
February 21, 2018, for definitions, utility and uses of such
non-GAAP financial measures.
(2) Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial
measures. Please refer to Item 2.02 of our Form 8-K filed on
February 21, 2018, for definitions, utility and uses of such
non-GAAP financial measures. See Regulation G Reconciliations -
Adjusted EBITDA for the twelve months ended December 31, 2016 for a
reconciliation of Adjusted EBITDA to Net loss.

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