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    Stock Report for Dynegy Inc. (DYN)

    Dynegy Inc. (DYN), through its subsidiaries, engages in the production and sale of electric energy, capacity and ancillary services in key U.S. markets. The Dynegy Power LLC power generation portfolio consists of approximately 6,771 megawatts of primarily natural gas-fired intermediate and peaking power generation facilities, the Dynegy Midwest Generation LLC portfolio consists of approximately 3,132 megawatts of primarily coal-fired baseload power plants, and a separate portfolio consists of approximately 1,693 megawatts from two power plants which are primarily natural gas-fired peaking and baseload coal generation facilities.

    Share Statistics (15-Mar-12)   FY












    Symbol DYN Revenue, $Mn 2,323.00 1,585.00 -31.8% 451.00 238.00 -47.2%
    Current price $0.63 Gross marg. 49.2% 39.2% -20.3% 31.7% 31.9% 0.6%
    52wk Range: $0.42-$6.92 Oper. margin -120.8% -732.4%
    Avg Vol (3m): 1,954,800 Net margin 5.2% -103.8% -2096.2% 36.4% -578.6% -1689.6%
    Market Cap. 76.93M              
    Shares Outstanding 122.89M EPS, $ 0.80 -4.30 -637.5% -1.05 -2.44 132.4%

    Source:, SEC Filings.

    Investment Highlights

    Shares in Dynegy Inc. (DYN) rose as much as 21% Thursday, recovering from last week’s plunge when a court-appointed examiner said a DYN subsidiary’s transfer of coal assets was fraudulent. The stock saw trading volume hit over 8 million shares yesterday, versus the 10-day average of over over 7  million. Shares closed the session at $0.63, below the 50-day and 200-day moving averages of $1.45 and $2.94, respectively.

    DYN shares have dropped 47.0% in the last five days; 58.3% in the last week; and 88.8% year-to-date.

    As reported by Reuters, court-appointed examiner Susheel Kirpalani said DYN harmed creditors by fraudulently transferring some coal-powered plant assets to itself before putting its Dynegy Holdings LLC unit into bankruptcy. The transfer occurred two months before Dynegy Holdings filed for bankruptcy protection last November 7.

    Reuters quoted Kirpalani’s statement saying, “Throughout the planning and execution of the prepetition restructuring, the Dynegy Inc. board favored paths that benefited Dynegy Inc. and its stockholders to the detriment of Dynegy Holdings and its creditors.”

    While Kirpalani said the independent power producer’s unit can win court approval of a Chapter 11 plan, his findings could undermine support for or derail its planned restructuring of more than $4 billion of debt, the report said.

    The Houston-based Company on Friday released a brief statement saying it is reviewing the report.


    Financial Summary

    DYN reported an operating loss of $86 million for the fourth quarter of 2011, compared to an operating loss of $163 million during the fourth quarter 2010. The results include pre-tax, unrealized, net mark-to-market losses of $35 million ($21 million after-tax) and mark-to-market losses of $105 million ($64 million after-tax) in the fourth quarter of 2011 and 2010, respectively. Adjusted EBITDA for the fourth quarter of 2011 totaled $(14) million, a decrease of $117 million compared to the fourth quarter 2010. Of the decrease, $37 million is attributable to compressed energy margins and lower generation volumes, arising from lower market prices and outages – both planned and unplanned. An additional $80 million of the decrease is associated with hedging, broker fees and the natural gas loss.

    The Company realized a net loss of $1.38 billion for latest quarter, compared to a net loss of $164 million during the same period in 2010 with the difference primarily attributable to the $1.66 billion non-cash loss on deconsolidation.

    For the full year 2011, the Company reported an operating loss of $236 million, up from the previous year’s operating loss of $11 million.  The results include pre-tax, unrealized, net mark-to-market losses of $175 million ($107 million after-tax) and mark-to-market gains of $18 million ($11 million after-tax) during the years ended December 31, 2011 and 2010, respectively. 2011 Adjusted EBITDA was $281 million compared to $539 million for 2010. The reduced operating results can be attributed to a $31 million decrease in energy margins, $50 million in lower capacity revenues in all markets, a $123 million decrease in premium revenue due to fewer options sold, and a $34 million loss related to natural gas during the fourth quarter. These results were partially offset by $58 million in lower fixed operating costs.

    Full-year net loss came in at $1.65 billion, compared to a net loss of $234 million for 2010, primarily attributable to a $1.66 billion non-cash loss on deconsolidation.

    As of March 2, 2012, DYN’s available liquidity, including the liquidity of DH and its subsidiaries which were deconsolidated effective November 7, 2011, was about $1.08 billion which included $835 million in unrestricted cash and cash equivalents, $25 million in letter of credit availability and $224 million in restricted cash available for collateral posting purposes.


    Financial Strength (15-Mar-2012)




    Quick Ratio (MRQ) 3.87 0.42 0.43
    Current Ratio (MRQ) 4.23 0.52 0.53
    LT Debt to Equity (MRQ) 164.93 73.60 67.46
    Total Debt to Equity (MRQ) 165.29 83.58 77.02
    Interest Coverage (TTM) -0.03 0.05 0.08

    Source:, SEC Filings.

    Technical Analysis


    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Mar15-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    NRG Energy Inc. NRG 16.41 3.74B 20.01 n/a 0.36 0.35
    Genon Energy Inc. GEN 2.59 2.00B n/a n/a 0.74 0.67
    Calpine Corp. CPN 17.11 8.24B 85.55 30.55 1.25 1.14
    Sempra Energy SRE 59.16 14.19B 14.09 12.81 1.43 1.36
    Electric Utilities Median       15.52 n/a 1.49 n/a
    Dynegy Inc. DYN 0.63 76.93M n/a n/a 0.04 0.04

    Source: Thomson Financial

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