q3-2009earnings.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported)
November
5, 2009
(Exact
name of registrant as specified in its charter)
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Delaware
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001-33443
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20-5653152
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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1000
Louisiana, Suite 5800, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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(713)
507-6400
(Registrant’s
telephone number, including area code)
N.A.
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition.
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On
November 5, 2009, Dynegy Inc. (“Dynegy”) issued a press release announcing its
third quarter 2009 financial results and updating its 2009 cash flow and
earnings estimates as well as its 2010 financial estimates. A copy of
Dynegy’s November 5, 2009 press release is furnished herewith as Exhibit 99.1
and is incorporated herein by this reference. Dynegy management will
hold an investor call at 9 a.m. ET on Thursday, November 5, 2009 to review its
third quarter 2009 financial results and related information and update its2009
cash flow and earnings estimates and 2010 financial estimates. A live
simulcast of the conference call, together with the related presentation
materials, will be available in the Investor Relations section of Dynegy’s
website (www.dynegy.com) and
will remain accessible until the date Dynegy’s year-end financial results are
available.
Pursuant
to General Instruction B.2 of Form 8-K and Securities and Exchange Commission
Release No. 33-8176, the information contained in the press release furnished as
an exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, is not subject to the liabilities
of that section and is not deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in such a filing. In addition, the press
release contains statements intended as “forward-looking statements” which are
subject to the cautionary statements about forward-looking statements set forth
in such press release.
Non-GAAP
Financial Information
In this
Form 8-K, we discuss the non-GAAP financial measures included in the press
release, including definitions of such non-GAAP financial information,
identification of the most directly comparable GAAP financial measures and the
reasons why we believe these measures provide useful information regarding our
financial condition, results of operations and cash flows, as
applicable, and, to the extent material, the additional purposes, if any, for
which these measures are used. Reconciliations of non-GAAP financial
measures to the most directly comparable GAAP financial measures, to the extent
available without unreasonable effort, are contained in the schedules attached
to the press release.
Gross Margin
Measures. We define “Adjusted Gross Margin” as revenues less
cost of sales excluding the impacts of mark-to-market
changes. Adjusted Gross Margin is meant to reflect the true
commercial performance of our power generation fleet. We believe that
Adjusted Gross Margin provides a meaningful representation of our current period
commercial performance; consequently, it excludes the impact of mark-to-market
changes, which reflect future periods. This adjustment aligns the
impacts of forward commercial sales transactions with the underlying generation
value in the same reporting period. Because Adjusted Gross Margin is
one of the financial measures that management uses to allocate resources,
determine Dynegy’s ability to fund capital expenditures, assess performance
against its peers and evaluate overall financial performance, we believe it
provides useful information for our investors. The most directly
comparable GAAP financial measure to Adjusted Gross Margin is operating
income.
EBITDA Measures. We
believe that EBITDA and Adjusted EBITDA provide a meaningful representation of
our operating performance. We consider EBITDA as a way to measure
financial performance on an ongoing basis. Adjusted EBITDA is meant
to reflect the true operating performance of our power generation fleet;
consequently, it excludes the impact of mark-to-market accounting and other
items that could be considered “non-operating” or “non-core” in nature, and
includes the contributions of those plants classified as discontinued
operations. Because EBITDA and Adjusted EBITDA are two of the
financial measures that management uses to allocate resources, determine
Dynegy’s ability to fund capital expenditures, assess performance against its
peers and evaluate overall financial performance, we believe they provide useful
information for our investors. In addition, many analysts, fund
managers and other stakeholders that communicate with us typically request our
financial results in an EBITDA and Adjusted EBITDA format.
“EBITDA”
– We define “EBITDA” as earnings (loss) before interest, taxes, depreciation and
amortization.
“Adjusted
EBITDA” – We define “Adjusted EBITDA” as EBITDA adjusted to
exclude (1) gains or losses on the sale of assets, (2) the impacts of
mark-to-market changes and (3) impairment charges.
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When
EBITDA is discussed in reference to performance on a consolidated basis,
the most directly comparable GAAP financial measure to EBITDA is net
income (loss) attributable to Dynegy Inc. It can be reconciled
using the following calculation: Net income (loss) plus Income tax
(benefit) expense, Interest expense and Depreciation and amortization
expense.
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Further,
because management does not allocate interest expense and income taxes on
a segment level, the most directly comparable GAAP financial measure to
EBITDA when performance is discussed on a segment level or plant level is
Operating income (loss).
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Cash Flow
Measures. Our non-GAAP Cash Flow measures may not be
representative of the amount of residual cash flow that is available to us for
discretionary expenditures, since they may not include deductions for mandatory
debt service requirements and other non-discretionary
expenditures. We believe, however, that our non-GAAP Cash Flow
measures are useful because they measure the cash generating ability of our
operating asset-based energy business relative to our capital expenditure
obligations and financial performance. However, these non-GAAP Cash
Flow measures do not have standardized definitions; therefore, it may not be
possible to compare these financial measures with other companies’ cash flow
measures having the same or similar names. The most directly
comparable GAAP financial measure to the below measures is cash flow from
operations.
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“Adjusted
Cash Flow from Operations” - We define “Adjusted Cash Flow from
Operations” as cash flow from operations excluding cash payments on
significant items, such as legal and regulatory payments.
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“Adjusted
Free Cash Flow” – We define “Adjusted Free Cash Flow” as cash flow from
operations excluding cash payments on significant items less maintenance
and environmental capital
expenditures.
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We
believe that the non-GAAP and forward-looking non-GAAP measures disclosed in our
filings are only useful as an additional tool to help management and investors
make informed decisions about Dynegy’s financial and operating
performance. Further, there can be no assurance that the assumptions
made in preparing the forward-looking non-GAAP numbers will prove accurate, and
actual results may be materially greater or less than those contained in the
forward-looking non-GAAP numbers. By definition, non-GAAP measures do
not give a full understanding of Dynegy; therefore, to be truly valuable, they
must be used in conjunction with the GAAP measures. Non-GAAP
financial measures are not standardized; therefore, it may not be possible to
compare these financial measures with other companies’ non-GAAP financial
measures having the same or similar names. We strongly encourage
investors to review our consolidated financial statements and publicly filed
reports in their entirety and not rely on any single financial
measure.
We use
these non-GAAP financial measures in addition to, and in conjunction with,
results presented in accordance with GAAP. These non-GAAP financial
measures reflect an additional way of viewing aspects of our business that, when
viewed with our GAAP results and the accompanying reconciliations to
corresponding GAAP financial measures included in our earnings release and
schedules attached thereto, may provide a more complete understanding of factors
and trends affecting our business. These non-GAAP financial measures
should not be relied upon to the exclusion of GAAP financial measures and are by
definition an incomplete understanding of Dynegy, and must be considered in
conjunction with GAAP measures.
Item
7.01 Regulation
FD Disclosure.
On
November 5, 2009, Dynegy issued a press release announcing its results of
operations for the third quarter of 2009 and providing 2010 financial estimates,
a copy of which is being furnished as Exhibit 99.1 and is herein incorporated by
reference. The information set forth in Item 2.02 above is
incorporated herein by reference.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits:
Exhibit No. Document
99.1 Press release dated
November 5, 2009, announcing results of operations for the third quarter of
2009.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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DYNEGY
INC.
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(Registrant)
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Dated:
November 5, 2009
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By:
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Name:
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Kent
R. Stephenson
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Title:
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Senior
Vice President, Deputy General Counsel
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EXHIBIT
INDEX
Exhibit No. Document
99.1 Press release dated
November 5, 2009, announcing results of operations for the third quarter of
2009.