SECOND QUARTER 2017 REVIEW AUGUST 3, 2017
FORWARD-LOOKING STATEMENTS Cautionary S ry Statement R Regard arding ng F Forw rward rd-Looki king ng S Statement nts This presentation contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward looking statements.” You can identify these statements by the fact that they do not relate strictly to historical or current facts. Management cautions that any or all of Dynegy’s forward- looking statements may turn out to be wrong. Please read Dynegy’s annual, quarterly and current reports filed under the Securities Exchange Act of 1934, including its 2016 Form 10-K and first and second quarter 2017 Forms 10-Q, when filed, for additional information about the risks, uncertainties and other factors affecting these forward-looking statements and Dynegy generally. Dynegy’s actual future results may vary materially from those expressed or implied in any forward-looking statements. All of Dynegy’s forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward- looking statements. In addition, Dynegy disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof. No Non-GAAP F Fina nancial M Measure sures This presentation contains non-GAAP financial measures including EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow. Reconciliations of these measures to the most directly comparable GAAP financial measures to the extent available without unreasonable effort are contained herein. To the extent required, statements disclosing the definitions, utility and purposes of these measures are set forth in Item 2.02 to our current report on Form 8-K filed with the SEC on August 3, 2017, which is available on our website free of charge, www.dynegy.com. 2
TABLE OF CONTENTS I. Overview and Outlook II. Operations and Commercial Activities III. Second Quarter 2017 Financial Results IV. Near-Term Priorities 3
OVERVIEW AND OUTLOOK • 2Q 2017 Net Loss of $296 MM versus $803 MM Net Loss for 2Q 2016 2Q 2017 FINANCIAL • 2Q 2017 Adjusted EBITDA of $240 MM versus $187 MM for 2Q 2016 HIGHLIGHTS • Liquidity of $1,384 MM as of June 30, 2017 • Sale of Troy and Armstrong closed on July 11, 2017, generating approximately $480 MM PORTFOLIO • Agreements reached to sell Dighton, Lee, and Milford (MA) for approximately $300 MM UPDATES • Completed 43 MW of uprates at Liberty and Milford (CT) at a cost of ~$175/kW • PJM and ISO-NE have proposed capacity market reforms to stabilize and support proper capacity price formation COMPETITIVE • PJM has also proposed energy market reforms to support proper energy price formation MARKETS • Appeal filed in the Illinois ZEC case • Reaffirming 2017 Adjusted EBITDA guidance range of $1,200 – 1,400 MM REAFFIRMING • Reaffirming 2017 Adjusted Free Cash Flow guidance range of $300 – 500 MM 2017 GUIDANCE • ~$55 MM in 2017 Adjusted EBITDA foregone due to delayed ENGIE closing and mid-year closing of the Troy and Armstrong sale; guidance ranges reaffirmed despite these impacts 4 (1) Note: Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures; reconciliations to GAAP can be found in the Appendix
THE EVOLUTION OF DYNEGY Transformative Steps Positioning for Long Term Success ~20% Built scale to leverage existing • infrastructure Add capacity via low-cost uprates • Repositioned fleet to focus on most Continuously work to lower dispatch • • Generation Fleet constructive markets costs ~80% Increased scale of natural gas-fueled Allocate capital to the most economic • • generation, particularly CCGTs with fuel units ~75% supply advantage ~25% Expand retail business in core markets • Entered the retail business with a • Business Mix through organic growth and/or generation backed retail portfolio acquisitions PRIDE program has generated more • Expand PRIDE program to recently • than $1.8 billion in total cash and acquired ENGIE assets liquidity benefits since 2011 Cost Structure Leverage external expertise to further • $370 MM in synergies captured through • optimize our operating model M&A activity Allocate asset sale proceeds to debt • reduction Balance sheet capacity used for • Balance Sheet transformative M&A Strengthen the balance sheet • Improve leverage profile • 5
PORTFOLIO OPTIMIZATION – ASSET SALES Dighton, Lee and Milford (MA) Transaction Summary Lee ee • Dynegy to sell Dighton and Milford (MA) for $119 MM Milfo ford rd − Fulfills the mitigation plan agreed upon with FERC to satisfy Dynegy’s purchase of ENGIE • Dynegy to sell Lee for $180 MM Dig ighton on − Eliminates up to $75 MM of capital expenditures needed for CP readiness Dig Dighton Milf ilford Lee Lee (1) Capacity (MW) 161 149 625 • Combined with the sale of Troy and Armstrong, a total of approximately $780 MM in asset sale ISO/Zone NE/SENE NE/SENE PJM/COMED proceeds expected to be generated Primary Fuel Natural Gas Natural Gas Natural Gas Dispatch Type Intermediate Intermediate Peaking Heat Rate 7,700 8,300 11,000 (btu/kWH) Operation Year 1999 1993 2001 ~$780 MM in asset sale proceeds to be allocated to debt reduction 6 (1) Summer capacity ratings
SUPPORTING COMPETITIVE MARKETS Defending competitive markets to deliver the lowest cost power to consumers Multiple Pathways PJM/ISO-NE FERC Federal Court • PJM and ISO-NE capacity • MOPR complaints pending at • Appeal filed in Illinois market improvements include FERC MOPR and/or two-tier pricing to mitigate subsidies • Court decisions point to FERC’s • Seventh circuit (IL) has set an ability to address problems expedited schedule to hear the • PJM energy market price created by ZEC programs; we case formation improvements will press FERC to do so include: • No other court has held that − Valuing units needed for • PJM IMM supports application the Federal Power Act could reliability by allowing them of MOPR not be enforced by private to set the marginal price actions − Eliminating negative pricing − Procuring additional • Case will be heard without resources to secure the consideration of prior decision system for natural gas contingencies FERC and the ISOs must protect the markets or states need to assume full responsibility for resource adequacy 7
OPERATIONS AND COMMERCIAL OVERVIEW
OPERATIONS SUMMARY Rac achel C Cas asey Safety Performance - Total Recordable Incident Rate (TRIR) Generation Volumes (MM MWh) IPH MISO PJM NY/NE CAISO ERCOT 2Q16 2Q17 25.4 22.7 3.2 0.8 0.2 3.8 4.2 2.24 13.3 12.1 11.7 11.0 1.62 10.9 2.1 11.2 0.8 1.1 1.41 0.2 0.3 0.1 3.5 4.1 4.0 3.8 1.03 2016 EEI 2.7 2.7 3.6 3.6 0.61 top-decile 7.4 6.9 TRIR (1.09) 4.2 4.2 3.3 3.3 0.00 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 (1) (1) Gas Coal Total Gas Coal Consolidated Net Capacity Factors Operations Update Total Dy Dynegy S Safety P Performance in in the Top De Decil ile 2Q16 2Q17 Generation V n Volum umes Gas fleet increased primarily due to the addition of the • ENGIE assets, offset by lower spark spreads and more 58% outages 56% Coal fleet increased primarily due to favorable power 46% • pricing and the addition of Coleto Creek, offset by 38% retirements Net t Cap apac acity F Fac acto tors Gas fleet declined primarily due to increased outages and • lower spark spreads (3) (2) Gas (CCGT) Coal Coal fleet increased primarily due to favorable power • pricing 9 (1) Excludes corporate and retail personnel; (2) 2Q16 excludes Casco Bay (Facility was under a tolling arrangement which expired 12/31/16); (3) Excludes Brayton Point
PRIDE ENERGIZED (2016-2018) PRIDE Energized EBITDA ($ MM) 2017 Progress $65 $65 MM in n 2017 E 2017 EBITDA i ini nitiatives i ident ntified t to date: 2016 results Coal and transportation contract reductions • achieved of $150 MM Gas transport rate reduction • $50 Chemical usage optimization and price improvements • $65 Over $100 $100 MM i MM in 2017 b 2017 balanc nce s sheet i ini nitiatives ident ntified $250 to to d date ate: $135 Term loan repricing • Supply chain optimization • Return of collateral • 2016 2017 2018 Total AMT credit monetization • PRIDE Energized Balance Sheet ($ MM) Enhancing PRIDE 2016 results Increasing PRID IDE t to dr drive a e addi dditional ben benefits: achieved of $422 MM • Rollout of PRIDE program to ENGIE plants with new initiatives identified $100 • Leveraging external expertise to further optimize our $100 internal operating model $400 $200 2016 2017 2018 Total Dynegy’s PRIDE program continues to evolve and deliver results 10
Recommend
More recommend
