With the ink from its refinancing agreement dry, Dynegy Inc. on Friday filed its complete re-audit for 2002 and its amended 2001 financial statements with the Securities and Exchange Commission, which indicate the company overstated its earnings by $242 million in 2001.

The Annual Report on Form 10-K for 2002 and an amended Form 10-K/A for 2001 filings include the company’s audited financial statements for 2002 and reflect all previously reported restatement items for the years 1999, 2000 and 2001 and adjustments since its 2001 Form 10-K/A was filed on Feb. 14, 2003.

In the original 10-K filing for the period ending Dec. 31, 2001, Dynegy had stated that it “realized net income of $648 million, or $1.90 per diluted share. This compares with $501 million, or $1.48 per diluted share, and $152 million, or $0.66 per diluted share, in 2000 and 1999, respectively. Recurring net income was $713 million, or $2.10 per diluted share, in 2001. This compares to $452 million, or $1.43 per diluted share, and $146 million, or $0.63 per diluted share, in 2000 and 1999, respectively.”

In the amended filing on Friday, the restatement indicated that in 2001, Dynegy “realized net income of $406 million, or $1.07 per diluted share. This compares with $436 million, or $1.27 per diluted share, and $137 million, or $0.60 per diluted share, in 2000 and 1999, respectively.” However, when Dynegy filed its amended 10-K in February, the company indicated that there was an $11 million reduction to 2001’s net income and a $13 million increase to 2002 net income (see Daily GPI, Feb. 19). Dynegy said in February that the changes were reflected from its forward power curve methodology. The revised 10-K/A would indicate that 2001’s net income was actually overstated $242 million, rather than $11 million.

The financial statements included in the 2002 Form 10-K and the amended 2001 Form 10-K/A were audited by PricewaterhouseCoopers LLP, the company’s independent auditor, and were certified by Dynegy CEO Bruce A. Williamson,and Nick J. Caruso, CFO.

“These filings provide an accurate picture of our business and operating results for the periods presented,” said Williamson. “Our stakeholders have a benchmark for our future performance and, importantly, an assurance that we have disclosed and properly accounted for past business.”

The 143-page restatement includes financial data for the re-audited period, management’s discussion and analysis of financial conditions and results of operations over the period, quantitative and qualitative disclosures about market risk. The information does not reflect events that have occurred since the date of the original filing. Dynegy will announce first quarter 2003 results on April 29 and will host an analyst conference call to review results.

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