THIRD QUARTER 2017 REVIEW NOVEMBER 1, 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, second and third 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 November 1, 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. Third Quarter 2017 Financial Results IV. Summary 3
OVERVIEW AND OUTLOOK • 3Q 2017 Net Loss of $133 MM versus $249 MM Net Loss for 3Q 2016 FINANCIAL • 3Q 2017 Adjusted EBITDA of $397 MM versus $350 MM for 3Q 2016 HIGHLIGHTS • Repaid / refinanced $1.25 billion of 2019 bonds, $200 million of Term Loan C and $300 million of revolver borrowings • Dighton and Milford (MA) sale closed in September, generating proceeds of ~$125 MM ($119 MM purchase price plus working capital adjustment) PORTFOLIO • Lee sale closed in October, generating proceeds of ~$180 MM UPDATES • Awaiting final approval for purchase of AES’ ownership interests in Miami Fort and Zimmer, expected by year-end • Top decile safety performance for second quarter in a row OPERATIONAL • Generated 34.2 MM MWh in 3Q 2017, Dynegy record for quarterly generation HIGHLIGHTS • PJM CCGT fleet continues its outstanding performance with a 1.2% Equivalent Unplanned Outage Factor for 3Q 2017 • 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 • M&A timing and asset sales have impacted 2017 Adjusted EBITDA by ~$70 million 4 (1) Note: Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures; reconciliations to GAAP can be found in the Appendix
OPERATIONS AND COMMERCIAL OVERVIEW
OPERATIONS SUMMARY Rac achel C Cas asey Safety Performance - Total Recordable Incident Rate (TRIR) Generation Volumes (MM MWh) IPH MISO PJM NY/NE CAISO ERCOT 3Q16 3Q17 34.2 30.2 5.0 0.5 1.0 5.4 1.97 5.7 20.1 2016 EEI 15.2 14.1 15.0 3.9 top-decile 15.1 1.34 1.0 14.5 0.5 0.4 TRIR (1.09) 1.1 5.7 5.0 5.4 1.05 5.0 0.98 0.85 4.2 4.2 0.78 3.4 3.4 9.7 9.5 5.0 4.6 5.0 4.6 3Q16 3Q17 3Q16 3Q17 3Q16 3Q17 (1) (1) Gas Coal Total Gas Coal Consolidated Net Capacity Factors Operations Update Total D Dynegy Saf Safety ty P Performance i in th the Top De Decil ile f for 3Q16 3Q17 Se Second Str Strai aight Q t Quar arter Generation V n Volum umes 70% 67% 66% Gas fleet increased primarily due to the addition of the • 56% ENGIE assets Coal fleet decreased primarily due to the shutdown of • Brayton Point, Baldwin unit 3 and sale of Conesville Net t Cap apac acity F Fac acto tors Gas fleet decreased primarily due to lower spark spreads • as a result of a decline in cooling degree days (4) driven by milder weather (3) (2) Gas (CCGT) Coal Coal fleet relatively flat quarter over quarter • 6 (1) Excludes corporate and retail personnel; (2) 3Q16 excludes Casco Bay (Facility was under a tolling arrangement which expired 12/31/16); (3) Excludes Brayton Point; (4) Cooling Degree Days based on National Oceanic and Atmospheric Association (NOAA) data
PRIDE ENERGIZED (2016-2018) PRIDE Energized EBITDA ($ MM) 2017 2018 2016 $150 $135 $70 $65 $50 $50 Goal Actual Goal Expected Goal Identified PRIDE Energized Balance Sheet ($ MM) 2016 2017 2018 $422 $200 $150 $100 $100 $15 Goal Expected Goal Actual Goal Identified Dynegy’s PRIDE program continues to deliver results 7
COMMERCIAL SUMMARY 2017 2018 umes Hedged (1 (1) umes Hedged Generati tion Volum Generati tion Volum PJM NY/NE ERCOT MISO PJM NY/NE ERCOT MISO 91% 100% 100% 84% 87% 79% 79% 78% 73% 61% 71% 63% 60% 54% 59% 41% Financial/Physical Hedges Retail and Wholesale Contracts Financial/Physical Hedges Retail and Wholesale Contracts 30/2017 (2) 2) 30/2017 Fu Fuel Suppl pply Hedged a as o of 9/30 Fu Fuel Suppl pply Hedged a as o of 9/30 3% 1% 97% 88% 68% 66% Gas Coal Gas Coal Volume Contracted and Priced Volume Contracted but Not Priced Volume Contracted and Priced Volume Contracted but Not Priced Impact o t of H Hedges Impact o t of H Hedges Hedge position and hedge value for balance of the year Hedge position and hedge value for full year 2018 • • Hedge value represents value which should be added to a 9/30/17 open Hedge value represents value which should be added to a 9/30/17 open • • valuation for modeling purposes to properly incorporate existing contracts valuation for modeling purposes to properly incorporate existing contracts Gross margin distribution for full year 2017 Gross margin distribution for full year 2018 • • ~5% Hedge ge P Position ion Hedge ge P Position ion ~25% Unhedged Energy Margin Unhedged Energy Margin ~50% 21.6 MM MWh 79.1 MM MWh ~25% Hedged Energy Margin Hedged Energy Margin Hed edge Va e Value Hed edge Va e Value Capacity/Retail/Tolls Capacity/Retail/Tolls ~50% ~45% $1.46/MWh $(0.10)/MWh Gross Margin Distribution Gross Margin Distribution 8 (1) Hedge percentages for the balance of the year (June 30, 2017= 7/1/17 through 12/31/17 & Sep 30, 2017 = 10/1/17 through 12/31/2017 ); (2) Hedge percentages for the balance of the year 10/1/17 through 12/31/17; Note: Hedge percentages take into account the announced retirements of Stuart and Killen as of their expected retirement dates
3Q 2017 FINANCIAL RESULTS
FINANCIAL SUMMARY Net Loss ($ MM) Liquidity ($ MM) 9/30/17 10/26/17 3Q16 3Q17 Revolving facilities and LC capacity $1,650 $1,650 Less: Outstanding revolver draws (300) - $(249) $(133) Outstanding LCs (405) (419) Revolving facilities and LC availability 945 1,231 Cash and cash equivalents 613 600 To Total L Liqu quidi dity $1,558 558 $1,831 831 Financial Update Adjusted EBITDA Results ($ MM) Net et Lo Loss • Decrease in net loss primarily due to the contribution from ENGIE assets and lower impairment charges, partially offset by $397 $350 a loss on sale of assets and a loss on the early extinguishment of debt Adju Ad justed E EBI BITDA DA 3Q16 3Q17 • Increase primarily due to a $108 MM contribution from the ENGIE assets, partially offset by lower spark spreads net of Guidance ($ MM) higher capacity revenues and lower O&M costs $1,400 Gui uidanc nce $1,200 • Reaffirming 2017 Adjusted EBITDA and Free Cash Flow guidance; Adjusted EBITDA expected to be near the bottom of the range $500 Liquid idit ity $300 Liquidity as of 9/30/2017 excludes $180 MM in cash proceeds • from the Lee sale received in October 2017 Repaid the outstanding revolving credit facility balance of • 2017 Adj EBITDA 2017 Adj FCF $300 MM in October 2017 10 (1) Note: Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures; reconciliations to GAAP can be found in the Appendix
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