DYNEGY INC modeFinance Edificio A AREA Science Park, Padriciano 99 34149 Trieste ITALY Tel: +39 040 3755337 Fax: +39 040 3756741 mail: info@modefinance.com web: www.modefinance.com
Company name Identification number Country ZIP code and city Address Phone Web site Email Legal form NACE 2 Sector Listed mF Credit limit
DYNEGY INC US205653152 United States of America 77002 - HOUSTON Suite 5800 +1 713 507 6400 www.dynegy.com Not available Not available 3511 - Production of electricity Listed 5,500,000 e
Turnover (the)
Creditworthiness scale
CCC
Fundamental Credit Rating:
Rating Probability of default Confidence Level
31/12/2009
31/12/2008
31/12/2007
1,713,175
2,388,447
1,982,203
CCC 16.00% 100%
BB 1.20% 100%
BB 1.20% 100%
Leverage ratio
2.77
2.15
1.93
Total asset/Total liabilties
1.36
1.47
1.52
Current ratio
1.10
1.65
1.66
Quick ratio
1.03
1.54
1.47
Extremely strong(AAA) Very strong(AA)
Solvency ratios
Good(A) Adequate(BBB) Sufficient(BB) Weak(B) High danger(CCC) Pathological(CC)
Liquidity ratios
Extremely pathological(C) Non return(D)
Profitability and economic equilibrium ratios
Not available
Return on investement ROI (%)
-8.58
4.96
4.76
Return on equity ROE (%)
-42.97
3.85
5.86
Asset turnover
0.23
0.23
0.22
Interest paid weight
-0.44
0.61
0.61
Gross Profit/Operating revenue
0.31
0.35
0.36
-2.12
1.74
1.50
Interest Coverage ratios EBIT interest coverage ratio
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Sector Analysis Company
Healthy
Balanced
Vulnerable
Risky
Leverage ratio Total asset/Total liabilties
2.77 1.36
0.52 2.93
1.97 1.51
3.78 1.21
-3.29 0.98
Current ratio Quick ratio
1.10 1.03
2.18 2.03
1.15 1.02
0.60 0.51
0.55 0.43
-8.58 -42.97 0.23 -0.44 0.31
15.43 16.52 0.67 0.02 0.37
6.18 7.99 0.43 0.24 0.27
1.61 -2.12 0.37 0.47 0.16
-4.81 -79.14 0.63 -0.05 -0.01
-2.12
49.58
3.57
0.69
-2.41
21 32 27 26 CCC
11 45 19 34 522 A
14 45 27 30 2,060 BB
16 28 15 24 1,041 B
27 61 52 21 152 CC
Solvency ratios
Liquidity ratios
Profitability and economic equilibrium ratios Return on investement ROI (%) Return on equity ROE (%) Asset turnover Interest paid weight Gross Profit/Operating revenue
Interest Coverage ratios EBIT interest coverage ratio
Cash Conversion Cycle (days) Days Sales Of Inventory (DIO) Days Sales Outstanding (DSO) Days Payable Outstanding (DPO) Cash Conversion Cycle (DIO + DSO - DPO)
Numer of analyzed companies (Average) Rating
The sector has been chosen according to: international companies in the sector NACE 2 3511 with financial data of year 2009.
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Sector Analysis - Graphs
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Balance Sheet BALANCE SHEET (th e) Accounting practice Exchange rate USD - EUR Total assets Fixed assets Intangible fixed assets Tangible fixed assets Other fixed assets Current assets Stocks Debtors Other current assets Cash & cash equivalent Shareholders funds Capital Other shareholders funds Total liabilities Non current liabilities Long term debt Other non-current liabilities Current liabilities Loans Creditors Other current liabilities Total shareh. funds & liab.
31/12/2009 Local GAAP 0.69416 7,603,080 6,188,392 263,779 4,940,301 984,312 1,414,688 97,876 148,549 1,168,263 333,194 2,014,438 4,165 2,010,273 5,588,642 4,306,538 3,314,590 991,947 1,282,104 560,183 125,642 596,279 7,603,080
31/12/2008 Local GAAP 0.71855 10,212,694 8,198,610 625,135 6,419,490 1,153,985 2,014,084 132,212 245,024 1,636,848 515,916 3,244,235 5,748 3,238,487 6,968,459 5,745,494 4,363,011 1,382,483 1,222,965 45,987 217,719 959,259 10,212,694
31/12/2007 Local GAAP 0.6793 8,981,052 7,851,373 635,147 6,125,266 1,090,959 1,129,679 135,181 290,062 704,436 222,811 3,060,935 5,434 3,055,500 5,920,117 5,241,494 4,034,375 1,207,120 678,623 34,644 198,356 445,622 8,981,052
NET DEBT (th e) Short term debts Long term debt Cash & cash equivalent Net debt
31/12/2009 560,183 3,314,590 333,194 3,541,579
31/12/2008 45,987 4,363,011 515,916 3,893,082
31/12/2007 34,644 4,034,375 222,811 3,846,208
Working capital Net Current Assets
31/12/2009 120,783 132,584
31/12/2008 159,517 791,119
31/12/2007 226,887 451,057
Days Sales Of Inventory (DIO) Days Sales Outstanding (DSO) Days Payable Outstanding (DPO) Cash Conversion Cycle (DIO + DSO - DPO)
31/12/2009 21 32 27 26
31/12/2008 20 37 33 24
31/12/2007 25 53 37 41
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Income Statement INCOME STATEMENT (th e) Accounting practice Exchange rate USD - EUR Sales Revenues growth (%) Other revenues +/- variation in inventories and contract in progress + Fixed assets own construction capitalized Operating revenue / turnover Total operating costs Costs growth (%) Service costs Material costs Costs of employees EBITDA Depreciation EBIT Financial P/L Financial revenue Financial expenses Interest paid P/L before tax Extr. and other P/L Extr. and other revenue Extr. and other expenses P/L before tax + Extr. and other P/L Taxation P/L for period
31/12/2009 Local GAAP 0.69416 1,713,175 -28.3 0
31/12/2008 Local GAAP 0.71855 2,388,447 20.5 0
31/12/2007 Local GAAP 0.6793 1,982,203 0
1,713,175 2,324,031 -12 295,710 906,566 -610,856 -329,724 -49,285 280,439 288,074 -940,580 -143,690 -1,084,270 -218,659 -865,611
2,388,447 1,853,849 16 783,215 248,617 534,598 -334,842 -88,381 246,461 306,819 199,756 -10,060 189,696 64,669 125,027
1,982,203 1,590,925 599,144 207,866 391,278 -224,849 -2,038 222,811 260,852 166,429 108,009 274,438 95,102 179,336
Costs of Good Sold Gross Profit Other Operating Expenses
31/12/2009 1,189,088 524,087 1,134,943
31/12/2008 1,551,341 837,106 302,508
31/12/2007 1,274,371 707,833 316,555
Cash flow Added value
31/12/2009 40,955 -
31/12/2008 373,644 -
31/12/2007 387,202 -
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Evolutions and trends
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Qualitative information
Full overview
Dynegy Inc., with head office in Houston, United States, is engaged in the production and supply of wholesale electric energy, capacity and ancillary services in key United States markets. This company was founded in 1984 as Natural Gas Clearinghouse, a marketer of natural gas. Dynegy provides wholesale power, capacity and ancillary services to utilities, cooperatives, municipalities and other energy companies in approximately 14 states in key U.S regions of the midwest, the northeast and the west coast. Power generation portfolio of this company consists of approximately 19,500 megawatts of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. Dynegy is one of the largest companies in the United States. In 2006, this company was the 28th top performer on the S&P (Standard & Poors) 500 based on fifty percent increase in its share price. Dynegy is a power generation leader focused on delivering value to investors. This company is listed on the New York Stock Exchange.
History
Founded as Natural Gas Clearinghouse, a marketer of natural gas.
Primary business line
Engaged in the production and supply of wholesale electric energy, capacity and ancillary services in key United States markets.
Secondary business line
Not available.
Main activity
Services.
Secondary activity
Not available.
Main products and services
Not available.
Size estimate
One of the largest companies in the United States.
Strategy, organization and policy
Not available.
Strategic alliances
Not available.
Membership of a network
Not available.
Main brand names
Not available.
Main domestic country
United States of America.
Main foreign countries or regions
Not available.
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Main production sites
Houston.
Main distribution sites
Not available.
Main sales representation sites
Not available.
Main customers
Not available.
Auditor/Advisor/Bank type Auditor Transfer Agent
ERNST & YOUNG LLP Mellon Investor Services
Board Mr Bruce A Williamson Mr David W Biegler Mr Howard B Sheppard Mr Steve Moffat Mr Thomas D Clark Mr William L Trubeck Mrs Patricia A Hammick
function Chairman of the Board, President, Chief Executive Officer Director Director Director Director Lead Director
date of birth -
nationality -
Sharehoders (the first twenty shareholders ordered by Direct %) LS POWER EQUITY PARTNERS LP LS Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 20.83 -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
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LS POWER EQUITY PARTNERS PIE I LP Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 12.63 -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/03
CARL ICAHN, HIGH RIVER LIMITED PARTNERSHIP AND ICAHN PARTNERS LP Rating: Country ISO code Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % 9.94 Number of Employees Total % Information date
2010/09
ICAHN ASSOCIATES CORP. via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 9.93
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
40 2010/11
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
4 40 2011/01
CH 8.12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
25,556 1,300,862 65,233 2010/09
US 7.50
Rating: BBB Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
8,612 177,994 8,629 2010/09
SENECA CAPITAL ADVISORS via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 9.29
UBS AG via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total % BLACKROCK, INC. via its funds Country ISO code NACE Rev. 2, Core code Direct % Total % DONALD SMITH & CO., INC. via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 6.96
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
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LS POWER ASSOCIATES, L.P. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 5.81 -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/03
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2,018 1,830 9,500 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/03
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
629 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
8,704 157,946 27,310 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
9 75 2010/09
VANGUARD GROUP, INC. THE via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 3.73
CAPITAL WORLD INVESTORS Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 3.08 -
S.A.C. CAPITAL ADVISORS, L.P. via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 2.68
STATE STREET CORPORATION via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 2.68
LASRY MARC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 2.13
AQR CAPITAL MANAGEMENT LLC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 2.10
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STATE OF PENNSYLVANIA via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 1.71
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/09
HALCYON ASSET MANAGEMENT LLC via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 1.69 Information date
2010/09
BANK OF AMERICA CORPORATION via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 1.51
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
114,119 2,223,299 283,717 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
1,379 113,774 2010/09
WAYZATA INVESTMENT PARTNERS LLC via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 1.47 Information date
2,506 2010/09
AMERIPRISE FINANCIAL INC. via its funds Rating: B Country ISO code NACE Rev. 2, Core code Direct % Total %
US 1.48
Subsidiaries (the first twenty subsidiaries ordered by Direct %) LS POWER GROUP Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 100.00 100.00
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
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2007/04
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DYNEGY EROPE CMMNCTONS HLDINGS Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US WO WO
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/02
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2007/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2007/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2007/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
75 2007/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2009/01
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
300 2007/12
DYNEGY CATLIN MEMBER Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US >50.00 -
DYNEGY FALCON HOLDINGS INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US >50.00 -
DYNEGY NORTHEAST GENERATION INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US >50.00 -
DYNEGY POWER MARKETING, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US >50.00
BLUEGRASSS GENERATION COMPANY LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
CALCASIEU POWER LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
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CASCO BAY ENERGY COMPANY, LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
6 21 2010/04
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
20 2010/07
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
3,888 611 20 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
12 20 2009/08
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
6 15 2010/07
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
32 250 2009/08
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2,468 11 2010/04
DYNEGY DANSKAMMER, L.L.C. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY ENERGY PARTNERS L.P. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY ENERGY SERVICE INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY GENERATION Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY GLOBAL COMMUNICATIONS, INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY HOLDINGS INC. Rating: B Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
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DYNEGY KENDALL ENERGY, LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
20 2010/04
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
600 2010/05
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
185 2010/01
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
1 4 2010/08
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
0 4 2010/07
DYNEGY MARKETING AND TRADE Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY MIDWEST GENERATION, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY MOSS LANDING, LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
DYNEGY ROSETON LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
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MORE rating guide General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk factors. The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial companies by using data included in financial statements. The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the model are obtained by applying newly developed numerical methodologies, drawing together financial theory, data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective algorithm that produces a classification of each company, by taking into account any attributes (such as sector and country) characterizing a firm. The model gives the opportunity to assign a rating to a company even without considering a complete data analysis and allows to process quality information. It induces a better understanding of a company s strength and weakness thanks to sophisticated data mining tools and taking into account the analysts knowledge. The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium between the different aspects, better will be the final rating. This is done studying, evaluating and aggregating the most important sections of the financial and economic behavior of a company as: profitability, liquidity, solvency, interest coverage and efficiency.
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Rating scale Rating class
Rating Macro class
The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent economic and financial flow and fund equilibrium.
AAA
AA
Healthy
A
BBB Balanced BB
B Vulnerable CCC
D
The company has very strong creditworthiness. It also has a good capital structure and economic and financial equilibrium. Difference from ’AAA’ is slight. The company has a high solvency. The company is however more susceptible to the adverse effects of changes in circumstances and economic conditions than companies in higher rated categories. Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial commitments could be affected by serious unfavourable events. A company rated ’BB’ is more vulnerable than companies rated ’BBB’. Furthermore the company faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions. The company presents vulnerable signals with regard to its fundamentals. Adverse business, financial, or economic conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments. A company rated ’CCC’ has a dangerous disequilibrium on the capital structure and on its economic and financial fundamentals. Adverse market events and an inadequate management could affect with high probability the company’s solvency. The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the company’s strong disequilibrium could increase.
CC
C
Assessment
Risky
The company shows considerable pathological situations. The company’s capacity to meet its financial commitments is very low. The company has not any longer the capacity to meet its financial commitments.
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Fundamental Credit Rating Ratios Solvency ratios Leverage ratio Assets to debt Financial ratios Fixed Assets coverage ratio Liquidity ratios Current ratio Quick ratio
Measures the level of total liabilities of the company in comparison with equity. Indicates company s solvency. The company shows a level of deficit when the value of this ratio is under one unit. Only for holdings. It measures the capital structure i.e. whether a company covers the fixed assets with long term capital. The current ratio measures whether a company has sufficient short-term assets to cover its short-term liabilities. The quick ratio compares current liabilities only to those assets that can be readily turned into cash.
Profitability and economic ratios Return on Investement(ROI) It measures the profitability of company investments without regard to the way the Return on Equity(ROE) Asset turnover Profit margin Interest coverage ratio Interest Paid coverage
investment is financed. It measures the profitability of the equity. It indicates the investments turnover with regard to sales. The level assumed from the ratio depends on the sector in which the company operates. It indicates the profitability of the sales. Indicate the ability of the company to cover interest expenses through the economic margins (Gross profit and EBIT) and through the cash flow from operating activities.
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mF Credit Limit mF Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with the analyzed company with an outlook of one year. modeFinance used the following values associated with the company analyzed while computing the credit limit: • Size; • Years in Business; • Average number of suppliers; • Liquidity of the company and the comparison with its sector;; • The funds dedicated to be paid to suppliers; • The likelihood that a company may pay its debts in the next 12 months (MORE Ratings). The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual public data. This value should be reviewed by paying attention at the Confidence Level value and by using other information such as other business information, news... etc; and private information such as the relationship with client, history of payments, guarantees and the knowledge of the sector.
Probability of default and Confidence Level In addition to the MORE rating, modeFinance also estimates the probability of default and provides a level of confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go into default. As the probability of default is strongly affected by the economic climate the company is operating in, companies in the same MORE class will not necessarily have the same probability of default. The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level: P Available Inf ormation Conf idence = P T otal Inf ormation The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the MORE rating is able to take into account for each company. For companies with fully populated records a confidence level of 100% would be applied: companies where no financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.
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NOTES The present analysis was based on the company available financial statements as provided by Bureau Van Dijk Electronic Publishing - ORBIS database (lack of both Notes to financial statements and Report on operations).
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