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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): JANUARY 31, 2002
DYNEGY HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-29311 94-3248415
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1000 LOUISIANA, SUITE 5800, HOUSTON, TEXAS 77002
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(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (713) 507-6400
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ITEM 5. OTHER EVENTS.
On January 31, 2002, Dynegy Holdings Inc., a Delaware corporation ("Dynegy
Holdings") and wholly owned subsidiary of Dynegy Inc., an Illinois corporation
("Dynegy"), closed on its option (the "Option") to purchase from CGNN Holding
Company, Inc., a Delaware corporation ("CGNN"), all of the membership interests
of MCTJ Holding Co. LLC, a Delaware limited liability company ("MCTJ"). MCTJ
indirectly owns all of the common stock of Northern Natural Gas Company, a
Delaware corporation ("Northern Natural"). Dynegy Holdings paid to CGNN a $23
million Option exercise price plus a working capital adjustment in connection
with the closing.
Dynegy Holdings acquired the Option pursuant to an Option Agreement dated
as of November 9, 2001, as amended by the Amendment to Option Agreement dated as
of November 19, 2001 and further modified by the Settlement Agreement dated as
of January 3, 2002 (as amended, the "Option Agreement") among CGNN, Dynegy
Holdings and MCTJ. The Option Agreement was entered into in connection with the
terminated merger agreement among Dynegy, Enron Corp., an Oregon corporation
("Enron"), and the other parties thereto. Also in connection with the
terminated merger agreement, Dynegy purchased 1,000 shares of Series A Preferred
Stock, par value $.01 per share, of Northern Natural for $1.5 billion in cash.
CGNN, an indirect wholly owned subsidiary of Enron, retained an option to
repurchase the membership interests of MCTJ and Dynegy's preferred stock in
Northern Natural through June 30, 2002.
Northern Natural provides transportation and storage services to its
customers and provides cross-haul and grid transportation between other
interstate and intrastate pipelines in the Permian, Anadarko, Hugoton and
Midwest areas. Northern Natural's 16,600 miles of pipeline extend from the
Permian Basin in Texas to the Upper Midwest, providing extensive access to major
utilities and industrial customers. Northern Natural's storage capacity is 59
billion cubic feet and its market area capacity is approximately 4.3 billion
cubic feet per day.
A copy of Dynegy's January 31, 2002 press release relating to the Option
exercise is attached hereto as exhibit 99.1 and is incorporated herein by this
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired - Not applicable.
(b) Pro Forma Financial Information - Not applicable.
(c) Exhibits:
99.1 Press release of Dynegy Inc. dated January 31, 2002.
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ITEM 9. REGULATION FD DISCLOSURE
In accordance with General Instruction B.2. of Form 8-K, the following
information shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, except as shall be
expressly set forth by specific reference in such a filing.
Concurrently with the filing of this Form 8-K, Dynegy Holdings is filing a
preliminary prospectus supplement under Rule 424(b) under the Securities Act of
1933 relating to a potential public debt issuance pursuant to an effective
Registration Statement on Form S-3 (Registration No. 333-66090). Dynegy Holdings
files herewith the preliminary prospectus supplement, which contains incremental
new information, as exhibit 99.2.
UNCERTAINTY OF FORWARD-LOOKING STATEMENTS AND INFORMATION.
Dynegy Holdings' reports, filings and other public announcements often
include statements reflecting assumptions, expectations, projections, intentions
or beliefs about future events. These statements are intended as "forward-
looking statements" under the Private Securities Litigation Reform Act of 1995.
You can identify these statements by the fact that they do not relate strictly
to historical or current facts. They use words such as "anticipate," "estimate,"
"project," "forecast," "may," "will," "should," "expect" and other words of
similar meaning. In particular, these include, but are not limited to,
statements relating to the following:
. Projected operating or financial results;
. Expectations regarding capital expenditures, dividends and other matters;
. Pending or recent acquisitions such as the acquisitions of Northern
Natural and BG Storage Limited, including the anticipated closing date,
expected cost savings or synergies and the accretive or dilutive impact of
an acquisition on earnings;
. Expectations regarding transaction volume and liquidity in wholesale
energy markets in North America and Europe;
. Beliefs or assumptions about the outlook for deregulation of retail and
wholesale energy markets in North America and Europe and anticipated
business developments in such markets;
. Dynegy Holdings' ability to effectively compete for market share with
industry participants;
. Beliefs about the outcome of Dynegy Holdings' or Dynegy Inc.'s legal and
administrative proceedings, including matters involving Enron; and
. The expected commencement date for commercial operations for new power
plants.
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Any or all of Dynegy Holdings' forward-looking statements may turn out to be
wrong. They can be affected by inaccurate assumptions or by known or unknown
risks and uncertainties, including the following:
. The timing and extent of changes in commodity prices for energy,
particularly natural gas, electricity and natural gas liquids;
. The timing and extent of deregulation of energy markets in North America
and Europe and the rules and regulations adopted on a transitional basis in
such markets;
. The condition of the capital markets generally, which will be affected by
interest rates, foreign currency fluctuations and general economic
conditions, as well as Dynegy Holdings' and Dynegy Inc.'s ability to
maintain its investment grade credit ratings;
. The effectiveness of Dynegy Holdings' risk-management policies and
procedures and the ability of Dynegy Holdings' trading counterparties to
satisfy their financial commitments;
. The liquidity and competitiveness of wholesale trading markets for energy
commodities, including the impact of electronic or online trading in these
markets;
. Operational factors affecting the start up or ongoing commercial
operations of Dynegy Holdings' power generation or midstream natural gas
facilities, including catastrophic weather related damage, unscheduled
outages or repairs, unanticipated changes in fuel costs or availability,
the unavailability of gas transportation, the unavailability of electric
transmission service or workforce issues;
. Cost and other effects of legal and administrative proceedings,
settlements, investigations and claims, including legal proceedings related
to the terminated merger with Enron and environmental liabilities that may
not be covered by indemnity or insurance;
. Other North American or European regulatory or legislative developments
that affect the demand for energy generally, increase the environmental
compliance cost for Dynegy Holdings' power generation or midstream gas
facilities or impose liabilities on the owners of such facilities; and
. General political conditions, including any extended period of war or
conflict involving North America or Europe.
Many of these factors will be important in determining Dynegy Holdings' actual
future results. Consequently, no forward-looking statement can be guaranteed.
Dynegy Holdings' actual future results may vary materially from those expressed
or implied in any forward-looking statements.
All of Dynegy Holdings' forward-looking statements, whether written or
oral, are expressly qualified by these cautionary statements and any other
cautionary statements that may
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accompany such forward-looking statements. In addition, Dynegy Holdings
disclaims any obligation to update any forward-looking statements to reflect
events or circumstances after the date of this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DYNEGY HOLDINGS INC.
/s/ Keith R. Fullenweider
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Keith R. Fullenweider
Senior Vice President and
Deputy General Counsel
Dated: February 14, 2002
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INDEX TO EXHIBITS
99.1 Press release of Dynegy Inc. dated January 31, 2002.
99.2 Dynegy Holdings Inc. preliminary prospectus supplement (excluding
accompanying base prospectus and filed for informational purposes only).
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