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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 14, 2002
DYNEGY HOLDINGS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-29311 94-3248415
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1000 Louisiana, Suite 5800
Houston, Texas 77002
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 507-6400
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
This Current Report on Form 8-K is being filed by Dynegy Holdings Inc., a
Delaware corporation ("Dynegy" or the "Company"), in order to correct certain
items in Dynegy's 2001, 2000 and 1999 financial statements as previously
reported in Dynegy's Annual Report on Form 10-K for the year ended December 31,
2001 (the "Form 10-K"). The restated financial statements attached as Exhibit
99.1 hereto reflect all known adjustments that, in the opinion of management,
are necessary for a fair presentation of Dynegy's financial results for the
periods presented. The financial statements have been restated to reflect the
following adjustments:
. Reporting approximately $290 million of cash flow in 2001 associated with
the Project Alpha structured natural gas transaction as a financing
activity rather than an operating activity as originally reported;
. Eliminating from Dynegy's results of operations a $79 million income tax
benefit originally reported in 2001 in connection with Project Alpha;
. Consolidating the assets, liabilities and results of operations of ABG
Gas Supply, LLC, one of the entities formed in connection with Project
Alpha, into Dynegy's financial statements, increasing consolidated
indebtedness as originally reported for 2001 by approximately $280
million;
. Re-allocating a second quarter 2002 pre-tax charge of $124 million ($80
million after-tax) relating principally to Dynegy's natural gas marketing
business back to the periods in which the transactions giving rise to the
charge actually occurred, resulting in net income reductions of $30
million, $17 million and $4 million for 2001, 2000 and 1999,
respectively; and
. Changing the accounting for certain contracts from hedge accounting to
mark-to-market accounting, resulting in a reduction in net income for
2001 as originally reported of approximately $1 million.
The summary set forth above describes the most significant elements of the
adjustments contained in the restated financial statements, but it is not
exhaustive. For a more complete description of these adjustments, please see
"Introductory Note--Restatements and Absence of Report of Independent Public
Accountants" immediately following the unaudited consolidated financial
statements attached hereto.
The preparation of the restated financial statements is the responsibility
of the Company's management. The restated financial statements reflect
adjustments known by management to the Company's 2001, 2000 and 1999 financial
statements. However, the restated financial statements attached hereto remain
unaudited. Dynegy's independent public accountant, PricewaterhouseCoopers LLP,
is currently re-auditing the Company's historical financial statements for each
of the three years in the period ended December 31, 2001, which were previously
audited by Arthur Andersen LLP ("Andersen"), Dynegy's former independent public
accountant. As a result of this three-year re-audit process, it is possible
that additional adjustments to these financial statements may result, some of
which could be material. Dynegy expects that the re-audit of its 1999 through
2001 consolidated financial statements will be completed early in the first
quarter 2003. Dynegy intends to file an amended Form 10-K reflecting the
unaudited restatements described herein as soon as practicable after the date
hereof. Following completion of the re-audit, further amendment of the Form
10-K will be necessary in order to include the audit report of
PricewaterhouseCoopers LLP as well as to reflect other changes resulting from
the re-audit, if any.
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 Consolidated Financial Statements (Unaudited and Restated) for 1999
through 2001.
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SIGNATURE
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 INC.
By: /s/ MICHAEL R. MOTT
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Michael R. Mott
Senior Vice President, Chief
Accounting Officer and
Controller
Dated: November 19, 2002
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