Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - DYNEGY HOLDINGS, LLC | d8k.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
On August 13, 2010, Dynegy entered into a Merger Agreement with Parent and Merger Sub, providing for the merger of Parent and Merger Sub with and into Dynegy. Parent and Merger Sub are affiliates of The Blackstone Group L.P. Concurrently with execution of the Merger Agreement, Denali Merger Sub Inc. entered into a Purchase and Sale Agreement with NRG, pursuant to which NRG will purchase four natural gas-fired assets currently owned by Dynegy as further described beginning on page 33 of the Registration Statement. In creating the unaudited pro forma condensed consolidated financial statements, the primary adjustments to the historical financial statements of DHI were the removal of the power generation facilities associated assets, liabilities and historical operations, including depreciation expense, to be sold to NRG. For a description of the Merger and the NRG Sale, see “The Merger and the NRG Sale” in the Registration Statement.
The following unaudited pro forma condensed consolidated financial data has been derived from our historical consolidated financial statements included in the Registration Statement beginning on page F-2. The following unaudited pro forma condensed consolidated balance sheet gives effect to the completion of the NRG Sale as if this transaction had occurred on June 30, 2010.
The following unaudited pro forma condensed consolidated statements of operations gives effect to the completion of the NRG Sale, as if the NRG Sale had occurred on January 1, 2009.
The unaudited pro forma condensed consolidated financial data are presented for illustrative purposes only and are not necessarily indicative of what our operating results or financial position would have been if the transaction described above had been completed as of June 30, 2010 (in the case of the unaudited pro forma condensed consolidated balance sheet) or as of January 1, 2009 (in the case of the unaudited pro forma condensed consolidated statements of operations), nor are they necessarily indicative of what our future operating results or financial position will be if the transaction with NRG described above is completed. The impact of the Merger Agreement is not included in the unaudited pro forma condensed consolidated data.
The following unaudited pro forma condensed consolidated financial data set forth below should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements, including the notes thereto, as of June 30, 2010 and for the six months ended June 30, 2010 and 2009 included in the Registration Statement beginning on page F-2 and our audited consolidated financial statements, including the notes thereto, as of and for the year ended December 31, 2009 included in the Registration Statement beginning on page F-36.
DYNEGY HOLDINGS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2010
(in millions)
| DHI Historical (a) |
Less: Divested Assets (b) |
Adjustments for Sales Transaction |
Pro Forma |
|||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets |
||||||||||||||||
| Cash and cash equivalents |
$ | 244 | $ | — | $ | 1,363 | (c) | $ | 1,607 | |||||||
| Restricted cash and investments |
87 | — | — | 87 | ||||||||||||
| Short-term investments |
204 | — | — | 204 | ||||||||||||
| Accounts receivable, net of allowance for doubtful accounts |
195 | (20 | ) | — | 175 | |||||||||||
| Accounts receivable, affiliates |
1 | — | — | 1 | ||||||||||||
| Inventory |
136 | (14 | ) | — | 122 | |||||||||||
| Assets from risk-management activities |
1,203 | — | — | 1,203 | ||||||||||||
| Deferred income taxes |
6 | — | — | 6 | ||||||||||||
| Broker Margin |
116 | — | — | 116 | ||||||||||||
| Prepayments and other current assets |
110 | (12 | ) | — | 98 | |||||||||||
| Total Current Assets |
2,302 | (46 | ) | 1,363 | 3,619 | |||||||||||
| Property, Plant and Equipment |
8,610 | (1,925 | ) | — | 6,685 | |||||||||||
| Accumulated depreciation |
(2,081 | ) | 228 | — | (1,853 | ) | ||||||||||
| Property, Plant and Equipment, Net |
6,529 | (1,697 | ) | — | 4,832 | |||||||||||
| Other Assets |
||||||||||||||||
| Restricted cash and investments |
859 | — | — | 859 | ||||||||||||
| Assets from risk-management activities |
300 | — | — | 300 | ||||||||||||
| Intangible assets |
165 | — | — | 165 | ||||||||||||
| Other long-term assets |
384 | (3 | ) | — | 381 | |||||||||||
| Total Assets |
$ | 10,539 | $ | (1,746 | ) | $ | 1,363 | $ | 10,156 | |||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||||||||||
| Current Liabilities |
||||||||||||||||
| Accounts payable |
$ | 138 | $ | (22 | ) | $ | — | $ | 116 | |||||||
| Accounts payable, affiliates |
8 | — | — | 8 | ||||||||||||
| Accrued interest |
36 | — | — | 36 | ||||||||||||
| Accrued liabilities and other current liabilities |
102 | (10 | ) | — | 92 | |||||||||||
| Liabilities from risk-management activities |
1,133 | — | — | 1,133 | ||||||||||||
| Notes payable and current portion of long-term debt |
146 | — | — | 146 | ||||||||||||
| Total Current Liabilities |
1,563 | (32 | ) | — | 1,531 | |||||||||||
| Long-term debt |
4,460 | — | — | 4,460 | ||||||||||||
| Long-term debt to affiliates |
200 | — | — | 200 | ||||||||||||
| Long-Term Debt |
4,660 | — | 4,660 | |||||||||||||
| Other Liabilities |
— | |||||||||||||||
| Liabilities from risk-management activities |
362 | — | — | 362 | ||||||||||||
| Deferred income taxes |
685 | — | (128 | )(d) | 557 | |||||||||||
| Other long-term liabilities |
342 | (18 | ) | — | 324 | |||||||||||
| Total Liabilities |
7,612 | (50 | ) | (128 | ) | 7,434 | ||||||||||
| Stockholder’s Equity |
||||||||||||||||
| Capital Stock, $1 par value, 1,000 shares authorized at June 30, 2009 |
— | — | — | — | ||||||||||||
| Additional paid-in capital |
5,135 | — | — | 5,135 | ||||||||||||
| Affiliate Receivable |
(777 | ) | — | — | (777 | ) | ||||||||||
| Accumulated other comprehensive loss, net of tax |
(71 | ) | — | — | (71 | ) | ||||||||||
| Accumulated deficit |
(1,360 | ) | (1,696 | ) | 1,491 | (1,565 | )(e) | |||||||||
| Total Stockholders’ Equity |
2,927 | (1,696 | ) | 1,491 | 2,722 | |||||||||||
| Total Liabilities and Stockholders’ Equity |
$ | 10,539 | $ | (1,746 | ) | $ | 1,363 | $ | 10,156 | |||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET OF
DYNEGY HOLDINGS INC.
| (a) | DHI Historical—represents DHI’s historical unaudited condensed consolidated balance sheet derived from the unaudited condensed consolidated financial statements, including the notes thereto, included in the Registration Statement beginning on page F-2, for the period ended June 30, 2010. |
| (b) | Divested Assets—represents the elimination of historical amounts of assets, liabilities and equity of the divested assets to reflect the pro forma effect of the sale of these assets to NRG. |
| (c) | Cash and Cash Equivalents—represents the net cash proceeds from the sale of the divested assets to NRG. |
| (d) | Deferred Income Taxes—represents the adjustments required to record the estimated difference between the tax basis and the book basis of current assets and liabilities subsequent to the sale to NRG at our effective rate of 38%. The tax adjustment also includes the impact of a taxable gain related to the sale of the divested assets to NRG. |
| (e) | Accumulated Deficit—includes the expected loss, net of income taxes, related to the sale of the divested assets to NRG, as the pro forma balance sheet does not give effect to any purchase accounting adjustments that would be pushed down to DHI if the Merger Agreement is completed. |
DYNEGY HOLDINGS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2009
(in millions)
| DHI Historical (a) |
Less: Divested Assets (b) |
Pro Forma |
||||||||||
| Revenues |
$ | 2,468 | $ | (448 | ) | $ | 2,020 | |||||
| Cost of sales |
(1,194 | ) | 236 | (958 | ) | |||||||
| Operating and maintenance expense, exclusive of depreciation shown separately below |
(521 | ) | 97 | (424 | ) | |||||||
| Depreciation and amortization expense |
(335 | ) | 74 | (261 | ) | |||||||
| Goodwill impairments |
(433 | ) | — | (433 | ) | |||||||
| Impairment and other charges, exclusive of goodwill impairments |
(538 | ) | — | (538 | ) | |||||||
| Loss on sale of assets, net |
(124 | ) | — | (124 | ) | |||||||
| General and administrative expenses |
(159 | ) | — | (159 | ) | |||||||
| Operating loss |
(836 | ) | (41 | ) | (877 | ) | ||||||
| Loss from unconsolidated investments |
(72 | ) | — | (72 | ) | |||||||
| Interest expense |
(415 | ) | — | (415 | ) | |||||||
| Debt extinguishment costs |
(46 | ) | — | (46 | ) | |||||||
| Other income and expense, net |
10 | (1 | ) | 9 | ||||||||
| Loss from continuing operations before income taxes |
(1,359 | ) | (42 | ) | (1,401 | ) | ||||||
| Income tax benefit (c) |
313 | 13 | 326 | |||||||||
| Loss from continuing operations |
$ | (1,046 | ) | $ | (29 | ) | $ | (1,075 | ) | |||
DYNEGY HOLDINGS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010
(in millions)
| DHI Historical (a) |
Less: Divested assets (b) |
Pro Forma |
||||||||||
| Revenues |
$ | 1,097 | $ | (269 | ) | $ | 828 | |||||
| Cost of sales |
(539 | ) | 142 | (397 | ) | |||||||
| Operating and maintenance expense, exclusive of depreciation shown separately below |
(231 | ) | 43 | (188 | ) | |||||||
| Depreciation and amortization expense |
(165 | ) | 41 | (124 | ) | |||||||
| Impairment and other charges |
(1 | ) | — | (1 | ) | |||||||
| General and administrative expenses |
(59 | ) | — | (59 | ) | |||||||
| Operating income (loss) |
102 | (43 | ) | 59 | ||||||||
| Loss from unconsolidated investments |
(34 | ) | — | (34 | ) | |||||||
| Interest expense |
(180 | ) | — | (180 | ) | |||||||
| Other income and expense, net |
2 | — | 2 | |||||||||
| Loss from continuing operations before income taxes |
(110 | ) | (43 | ) | (153 | ) | ||||||
| Income tax benefit (c) |
56 | 16 | 72 | |||||||||
| Loss from continuing operations |
$ | (54 | ) | $ | (27 | ) | $ | (81 | ) | |||
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
OF
DYNEGY HOLDINGS INC.
| (a) | DHI Historical—represents DHI’s historical audited consolidated statement of operations derived from the audited consolidated financial statements, including the notes thereto, included in the Registration Statement beginning on page F-36, for the fiscal year ended December 31, 2009, and from the unaudited condensed consolidated financial statements, including the notes thereto, included in the Registration Statement beginning on page F-2 for the period ended June 30, 2010 and 2009. |
| (b) | Divested Assets—represents the elimination of historical operations of the divested assets to reflect the pro forma effect of the sale of these assets to NRG. |
| (c) | Income Tax Benefit—represents the pro forma tax effect of the above adjustments based on an estimated prospective statutory rate of approximately 37% and 31% for the six months ended June 30, 2010 and twelve months ended December 31, 2009, respectively. |