Exhibit 99.1
Press Release Source: Dynegy
Dynegy Announces Restructuring, Will Exit Marketing and Trading Business
HOUSTON--(BUSINESS WIRE)--Oct. 16, 2002--Dynegy Inc. (NYSE:DYN - News)
o New structure emphasizes efficiency, accountability and performance
management
o Managed exit from marketing and trading business to reduce capital and
liquidity requirements
o Operating divisions to be supported by leaner corporate center
o President and COO Bergstrom announces decision to resign
Dynegy Inc. (NYSE:DYN - News) today announced that it is implementing a
restructuring plan designed to improve operational efficiencies and performance
across its lines of business. In a marked shift, Dynegy will adopt a
decentralized business structure consisting of a streamlined corporate center
and operating units in power generation, natural gas liquids, regulated energy
delivery and communications.
The company also announced it will exit the marketing and trading business in
the United States, Canada and Europe. In connection with this exit, President
and Chief Operating Officer and Dynegy board member Steve Bergstrom has decided
to resign and withdraw his name as a candidate for chief executive officer.
"The objective of the restructuring is to maximize the potential and
profitability of our existing operating divisions by requiring each business
unit to develop its own strategy while being responsible for its performance and
delivering value to our stakeholders," said Dan Dienstbier, chairman and interim
chief executive officer of Dynegy Inc. "This new structure allows our divisions
to leverage their unique strengths in operations, customer relationships and
leadership, while the corporate center will be responsible for enabling,
monitoring and measuring success and administering the appropriate financial and
regulatory controls," he added.
"In his many years of service, Steve Bergstrom provided outstanding leadership
and made immeasurable contributions to our company and the industry," said
Dienstbier. "His vision and knowledge were driving forces in the development of
the marketing and trading business and the creation of an asset-backed energy
delivery network that has served our customers reliably over the past 17 years."
Steve Bergstrom said, "I fully support the steps leadership is taking to address
current market conditions and position the company for the future. The new
organizational direction is the right course for Dynegy to take to maximize
value to all stakeholders and to capitalize on its talent pool and excellence in
operational performance."
The restructuring is the result of a detailed assessment of the company's
corporate functions and business units. Concurrent with the company's ongoing
capital and liquidity plan, Dynegy's leadership conducted a thorough review of
its corporate strategy, the financial performance of each operating division and
its organizational structure and staffing.
The company's operating divisions are Dynegy Generation, Dynegy Midstream
Services, Illinois Power and Dynegy Global Communications. Each division chief
executive officer will report to Dynegy's new chief executive officer, whom the
company expects to name within the next few weeks. The business units are as
follows:
o Dynegy Generation owns and operates approximately 17,500 gross
megawatts of domestic and international generating capacity. Alec
Dreyer, president of the company's generation business since 2000,
will serve as chief executive officer of this unit. Dynegy Generation
will continue to focus on
optimizing the company's owned and controlled generation assets and on
the production and delivery of wholesale power.
o Dynegy Midstream Services (DMS) ranks as one of North America's
largest natural gas liquids marketers. Steve Furbacher, president of
DMS since 1996, will serve as chief executive officer. DMS will
continue to pursue business opportunities in areas related to its
North American midstream liquids processing and marketing business and
global natural gas liquids marketing and transportation operations.
o Dynegy's regulated utility, Illinois Power (IP), continues its focus
on safe, reliable delivery of electricity and natural gas to its
650,000 customers across a 15,000-square-mile area of Illinois. Larry
Altenbaumer, IP's president since 1999, will serve as chief executive
officer of this unit.
o The company's communications division, Dynegy Global Communications
(DGC), owns and operates a 16,000-route-mile, optically switched mesh
network reaching 44 U.S. cities. Dynegy continues to pursue
opportunities intended to reduce its financial exposure in this
business. DGC continues operations to meet current customer
commitments and obligations. Ken Snyder, DGC's current president, will
serve as chief executive officer.
Dynegy's corporate center will provide governance, policy, reporting and control
support to the operating divisions. Corporate center leadership includes: Dan
Dienstbier, chairman and interim chief executive officer; Ken Randolph,
executive vice president and general counsel; Hugh Tarpley, executive vice
president, corporate development; Mike Mott, senior vice president and chief
accounting officer; and Louis Dorey, executive vice president, finance. Blake
Young has been named executive vice president, technology and administration.
Formerly president of Global Technology, Young will add internal audit, risk
management, corporate communications, human resources and corporate shared
services to his functional areas of responsibility.
Dynegy intends to exit the marketing and trading business over the next several
months. The company will make appropriate arrangements with respect to its
longer-term contractual obligations, including retaining personnel and risk
management capabilities and continuing capacity to support its customer
commitments. Matt Schatzman, currently president of commercial operations, will
manage the exit in the United States and Canada and Mike Flinn, currently
president of Dynegy Europe, will manage the exit in Europe. The decision to exit
this business is expected to reduce the company's collateral requirements and
overall corporate expenses.
As a result of its organizational restructuring and exit from marketing and
trading, the company will undergo a significant work force reduction. The exact
timing, areas affected and number of employees impacted will be announced in the
near future.
Dynegy Inc. owns operating divisions engaged in power generation, natural gas
liquids, regulated energy delivery and communications. Through these business
units, the company serves customers by delivering value-added solutions to meet
their energy and communications needs.
Certain statements included in this news release are intended as
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. These statements include assumptions, expectations, predictions,
intentions or beliefs about future events. Dynegy cautions that actual future
results may vary materially from those expressed or implied in any
forward-looking statements. Some of the key factors that could cause actual
results to vary materially from those expected include changes in energy
commodity prices; Dynegy's ability to successfully execute its strategy to exit
the marketing and trading business; operational factors affecting Dynegy's
operating businesses; the cost of borrowing and other factors affecting Dynegy's
financing activities, including its ability to execute its capital plan, and its
credit ratings; the results of Dynegy's re-audit of its 1999-2001 financial
statements, which could cause material changes to Dynegy's reported financial
results for the applicable periods, to current expectations and estimates and to
financial results for future periods; the demand for and pricing of services
offered by Dynegy's telecommunications business and the effect of general market
conditions in the telecommunications business; and uncertainties regarding
environmental regulations or litigation and other legal or regulatory
developments affecting Dynegy's business, including litigation relating to the
California power market and shareholder claims, as well as the ongoing
regulatory investigations primarily relating to Project Alpha and trading
practices. More information about the risks and uncertainties relating to these
forward-looking statements are found in Dynegy's SEC filings, which are
available free of charge on the SEC's web site at http://www.sec.gov.