Dynegy Inc fka DYN

[Enterprising Investor]

DYN Announces Third Quarter 2012 Results and $325 Million Debt Repayment (11/07/12)

Recent Developments:

• On November 6, 2012, Dynegy provided notification to its lenders of its intent to repay $325 million of the Dynegy Power, LLC and Dynegy Midwest Generation, LLC term loans

• Dynegy completed the Baldwin Unit 2 planned outage on November 3, 2012 marking the Company’s completion of the environmental capital compliance obligations under our Consent Decree

• Auction process for the sale of the Dynegy Northeast assets continues; bids were submitted on November 5, 2012

• On September 30, 2012, Dynegy Holdings, LLC (DH) merged with and into Dynegy; the merged company emerged from bankruptcy on October 1, 2012

Third quarter 2012 summary:

• 14% increase in generation volumes compared to the same period in 2011 driven by a 39% increase in our Gas segment generation due to improved spark spreads

• $50 million in Coal and Gas segment Adjusted EBITDA, a decrease of $52 million compared to 2011 due to lower realized prices for the Company’s Coal segment, the settlement of legacy financial positions, and lower capacity and tolling revenues from early terminations of California contracts

• $803 million in enterprise liquidity at November 2, 2012, including $429 million in unrestricted cash

Year-to-date 2012 summary:

• 18% increase in generation volumes compared to the same period in 2011 driven by a 76% increase in our Gas segment generation due to improved spark spreads partially offset by an 11% decrease in Coal segment generation due primarily to higher planned outage hours and lower off-peak generation

• $98 million in Coal and Gas segment Adjusted EBITDA, a decrease of $212 million compared to 2011 as a result of lower realized prices for the Company’s Coal segment, the settlement of legacy financial positions, and lower capacity and tolling revenues due to early terminations of California contracts

• $(37) million in consolidated Cash Flow used in Operations

HOUSTON--(BUSINESS WIRE)--Dynegy Inc. (NYSE:DYN) reported third quarter 2012 Adjusted EBITDA for the Coal and Gas segments of $50 million compared to $102 million for the same period in 2011. Lower realized prices for the Coal segment, lower revenues from the termination of certain California contracts, and the settlement of legacy financial positions reduced Adjusted EBITDA for the Coal and Gas Segment by $89 million. Partially offsetting these items were a $12 million improvement in Coal and Gas segment general and administrative and operating and maintenance expenses, a $14 million benefit related to lower option premium expenses, and a $10 million positive adjustment for non-cash amortization related to the Gas segment’s Independence contract. The operating loss for Dynegy’s Coal and Gas segments was $(1) million for the third quarter of 2012 compared to operating income of $40 million for the same period in 2011. The net loss for Dynegy’s consolidated operations was $(41) million for the third quarter of 2012 compared to a net loss of $(129) million for the same period in 2011.

“Our gas-fired generation fleet continues to benefit from current market conditions and performed exceedingly well operationally, leading to record volumes of generated electricity. While our Illinois-based coal fleet also operated well, lower energy margins continued to impact the profitability of the Coal segment”
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Year-to-date 2012 Adjusted EBITDA for the Coal and Gas segments was $98 million versus $310 million for the same period in 2011. The weaker financial results were primarily driven by lower realized power prices for the Coal segment which decreased energy margins by $123 million and an 11% reduction in generation volumes for our Coal segment which led to an additional $25 million decrease. Lower capacity and tolling revenues in the Gas segment of $38 million, primarily due to the early termination of the California agreements, a $28 million reduction in premium revenue, and unfavorable financial settlements of $49 million related to legacy financial positions further contributed to the decrease in year-over-year Adjusted EBITDA. These factors more than offset an $18 million improvement in general and administrative and operating and maintenance expenditures and a $29 million positive adjustment for non-cash amortization expense associated with the Company’s Independence contract. The 2012 year-to-date operating income for the Coal and Gas segments was $9 million compared to an operating loss of $(56) million for the same period in 2011. The 2012 year-to-date net loss for Dynegy’s consolidated operations totaled $(1,192) million compared to a net loss of $(324) million for the same period in 2011.

“Our gas-fired generation fleet continues to benefit from current market conditions and performed exceedingly well operationally, leading to record volumes of generated electricity. While our Illinois-based coal fleet also operated well, lower energy margins continued to impact the profitability of the Coal segment,” said Robert C. Flexon, Dynegy President and Chief Executive Officer. “In our first major capital allocation action post emergence, we are announcing today the early repayment of $325 million in term loan debt, which will reduce our annualized cash interest costs by approximately $30 million.”

http://www.businesswire.com/news/home/20121107005769/en/Dynegy-Announces-Quarter-2012-Results-325-Million