DYNEGY INC. (NYSE:DYN) Files An 8-K Results of Operations and Financial Condition
Item 2.02 Results of Operations and Financial
Condition.
On February23, 2017, Dynegy Inc. (Dynegy) issued a news release
announcing its fourth quarter and year-end 2016 financial results
and the affirmation of its 2017 guidance estimates. A copy of
Dynegys February23, 2017 news release is furnished herewith as
Exhibit99.1 and is incorporated herein by this reference. Dynegys
earnings presentation and management comments on the earnings
presentation will be available on the Investor Relations section
of Dynegys website (www.dynegy.com) later today. Dynegys
management will hold an investor conference call and webcast
tomorrow, February24, 2017, at 9 a.m.ET/8 a.m.CT, to answer
questions related to its fourth quarter and year-end 2016
financial results and related information. Participants may
access the webcast from the Dynegy website.
to General Instruction B.2 of Form8-K and Securities and Exchange
Commission (the SEC) Release No.33-8176, the information
contained in the news release furnished as an exhibit hereto
shall not be deemed filed for purposes of Section18 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 news release
contains statements intended as forward-looking statements which
are subject to the cautionary statements about forward-looking
statements set forth in such news release.
Non-GAAP Financial Information
In analyzing and planning for Dynegys business, management
supplements Dynegys use of GAAP financial measures with non-GAAP
financial measures, including earnings before interest, taxes,
depreciation and amortization (EBITDA) and Adjusted EBITDA as
performance measures, and Adjusted Free Cash Flow (FCF) as a
liquidity measure. These non-GAAP financial measures reflect an
additional way of viewing aspects of Dynegys business that, when
viewed with its Generally Accepted Accounting Principles (GAAP)
results and the accompanying reconciliations to corresponding
GAAP financial measures, may provide a more complete
understanding of factors and trends affecting its business. In
this Form8-K, Dynegy discusses such non-GAAP financial measures
included in the news release, including definitions of such
non-GAAP financial information, identification of the most
directly comparable GAAP financial measures and the reasons why
management believes these measures provide useful information
regarding Dynegys 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 news release.
EBITDA Measures.
EBITDA is defined as earnings (loss) before interest expense,
income tax expense (benefit) and depreciation and amortization
expense.
Adjusted EBITDA is defined as EBITDA adjusted to exclude (i)gains
or losses on the sale of certain assets, (ii)the impacts of
mark-to-market changes on derivatives related to Dynegys
generation portfolio, as well as warrants, (iii)the impact of
impairment charges and certain other costs such as those
associated with acquisitions, and (iv)other material items.
Beginning in 2016, Adjusted EBITDA also excludes non-cash
compensation expense.
Management believes EBITDA and Adjusted EBITDA provide meaningful
representations of Dynegys operating performance. Management
considers EBITDA as another way to measure financial performance
on an ongoing basis. Adjusted EBITDA is meant to reflect the
operating performance of Dynegys entire power generation fleet
for the period presented; consequently, it excludes the impact of
mark-to-market accounting, impairment charges and other items
that could be considered non-operating or non-core in nature.
Because EBITDA and Adjusted EBITDA are financial measures that
management uses to allocate resources, determine Dynegys ability
to fund capital expenditures, assess performance against Dynegys
peers and evaluate overall financial performance, management
believes they provide useful information for Dynegys investors.
In addition, many analysts, fund managers and other stakeholders
who communicate with Dynegy typically request its financial
results in an EBITDA and Adjusted EBITDA format.
As prescribed by the SEC, when EBITDA or Adjusted EBITDA is
discussed in reference to performance on a consolidated basis,
the most directly comparable GAAP financial measure to EBITDA
and Adjusted EBITDA is Net income (loss). Management does not
analyze interest expense and income taxes on a segment level;
therefore, the most directly comparable GAAP financial measure
to EBITDA or Adjusted EBITDA when performance is discussed on a
segment level is Operating income (loss).
Cash Flow Measure.
Dynegys non-GAAP liquidity measure may not be representative of
the amount of residual cash flow that is available to Dynegy
for discretionary expenditures, since it may not include
deductions for mandatory debt service requirements and other
non-discretionary expenditures. Management believes, however,
that Dynegys non-GAAP liquidity measure is useful to investors
and Dynegy as a liquidity measure because it measures the cash
generating ability of Dynegys operating assets. Dynegy measures
Adjusted FCF on a consolidated basis.
Adjusted Free Cash Flow is defined as cash flow from operating
activities adjusted for non-discretionary maintenance and
environmental capital expenditures and the cash impact of
acquisition-related costs. Adjusted FCF includes receipts or
payments related to interest rate swaps, and excludes the
impact of changes in collateral, working capital and other
receipts and payments.The most directly comparable GAAP
financial measure to such measure is cash flows from operating
activities.
Management believes that the historical non-GAAP measures and
forward-looking non-GAAP measures disclosed in Dynegys filings
are only useful as an additional tool to help management and
investors make informed decisions about Dynegys financial and
operating performance and liquidity. Further there can be no
assurance that the assumptions made in preparing
forward-looking non-GAAP numbers will prove accurate, and
actual results may be materially less or greater 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 comparable GAAP measures. In addition,
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. Dynegy strongly encourages investors to review
its consolidated financial statements and publicly filed
reports in their entirety and not rely on any single financial
measure.
Item 7.01 Regulation FD
Disclosure.
The information set forth in Item 2.02 above is incorporated
herein by reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits:
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ExhibitNo. |
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Document |
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99.1 |
News release dated February23, 2017, announcing results |
DYNEGY INC. (NYSE:DYN) Recent Trading Information
DYNEGY INC. (NYSE:DYN) closed its last trading session down -0.23 at 8.78 with 4,052,863 shares trading hands.
