dngsavingsplan.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM
11-K
_________________
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended December 31, 2008
Commission
file number: 001-33443
__________________
Dynegy
Northeast Generation, Inc. Savings Incentive Plan
(Full
title of the plan)
___________________
Dynegy
Inc.
1000
Louisiana
Suite
5800
Houston,
Texas 77002
(Name of
issuer of the securities held
pursuant
to the plan and the address
of its
principal executive office)
TABLE
OF CONTENTS
Page No.
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNITNG FIRM 1
FINANCIAL
STATEMENTS:
Statements
of Net Assets Available for
Benefits 2
Statement
of Changes in Net Assets Available for Benefits 3
NOTES TO
FINANCIAL
STATEMENTS 4
SUPPLEMENTAL
SCHEDULE
Schedule
H Line 4(i) - Schedule of Assets (Held at End of
Year) 15
|
|
Note:
Other schedules required by 29 CFR 2520.103-10 of the
Department
|
|
|
of
Labor’s Rules and Regulations for reporting and disclosure
under
|
|
|
ERISA
have been omitted because they are not
applicable.
|
SIGNATURE 16
EXHIBIT
23.1 CONSENT OF INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING
FIRM
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Participants and Administrator of
the
Dynegy Northeast Generation, Inc. Savings Incentive Plan
We have
audited the accompanying statements of net assets available for benefits of the
Dynegy Northeast Generation, Inc. Savings Incentive Plan (the “Plan”) as of
December 31, 2008 and 2007, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2008. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan as of
December 31, 2008 and 2007, and the changes in net assets available for benefits
for the year ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
table of contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplementary information is the responsibility of the Plan's
management. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/
McConnell & Jones LLP
Houston,
Texas
June 18,
2009
DYNEGY
NORTHEAST GENERATION, INC. SAVINGS INCENTIVE PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER
31, 2008 AND 2007
|
|
|
2008
|
|
|
2007
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Investments at fair
value:
|
|
|
|
|
|
|
|
|
Plan interest in Dynegy Inc.
Master Trust
|
|
$ |
14,659,853 |
|
|
$ |
18,760,109 |
|
|
Participant loans
|
|
|
533,517 |
|
|
|
507,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
15,193,370 |
|
|
|
19,267,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
|
$ |
15,193,370 |
|
|
$ |
19,267,150 |
|
The
accompanying notes are an integral part of the financial
statements.
DYNEGY
NORTHEAST GENERATION, INC. SAVINGS INCENTIVE PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR
THE YEAR ENDED DECEMBER 31, 2008
|
INVESTMENT
INCOME (LOSS), NET:
|
|
|
|
|
|
|
|
|
|
Plan interest in net loss of
Dynegy Inc. Master Trust
|
|
$ |
(4,970,086 |
) |
|
Interest on participant
loans
|
|
|
41,706 |
|
|
Total investment
loss
|
|
|
(4,928,380 |
) |
|
CONTRIBUTIONS:
|
|
|
|
|
|
|
|
|
|
|
|
Employee
|
|
$ |
1,445,011 |
|
|
Employer
|
|
|
396,523 |
|
|
Total
contributions
|
|
|
1,841,534 |
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Benefit payments
|
|
$ |
975,948 |
|
|
Administrative
expenses
|
|
|
10,986 |
|
|
Total expenses
|
|
|
986,934 |
|
|
|
|
|
|
|
|
NET
DECREASE
|
|
|
(4,073,780 |
) |
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
19,267,150 |
|
|
|
|
|
|
|
|
End of year
|
|
$ |
15,193,370 |
|
The
accompanying notes are an integral part of the financial
statements.
DYNEGY
NORTHEAST GENERATION, INC. SAVINGS INCENTIVE PLAN
NOTES
TO FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Explanatory
Note
On April
2, 2007, Dynegy Illinois Inc. (formerly Dynegy Inc.), an Illinois corporation
(“Dynegy Illinois”), consummated a transaction (the “Merger”) in which it became
a wholly owned subsidiary of a newly created entity, Dynegy Inc., a Delaware
corporation (“Dynegy”).
Following the Merger, Dynegy replaced
Dynegy Illinois as the sponsor of the Dynegy Northeast Generation, Inc. Savings
Incentive Plan (the “Plan”). In addition, all shares of Dynegy
Illinois common stock in the Dynegy Stock Fund were converted into shares of the
Class A common stock of Dynegy, par value $.01 per share (“Dynegy Class A common
stock”), based on a formula established in connection with the
Merger. As a result, future investments in the Dynegy Stock Fund will
be represented by units of Dynegy Class A common stock, rather than units of
Dynegy Illinois common stock. The Plan was amended on April 2, 2007
to reflect such changes.
The
following description of the Plan provides only general
information. Participants should refer to the Plan documents, which
are the governing documents, for a more complete description of the Plan’s
provisions.
General
Effective
January 31, 2001, Dynegy Inc. (“Dynegy”) established the Plan for the exclusive
benefit of the eligible employees of Dynegy Northeast Generation, Inc. (“DNE,”
or the “Employer”). Although it is the Plan sponsor, Dynegy does not
participate in the Plan. The Plan is a defined contribution profit
sharing plan that qualifies under Section 401(a) of the Internal Revenue Code of
1986, as amended (the “Code”), and is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). The
Dynegy Inc. Benefit Plans Committee serves as the “Plan Administrator” for the
Plan. Vanguard Fiduciary Trust Company (“Vanguard” or the “Trustee”)
is the trustee for the Plan.
The Plan
was established in accordance with the Asset Purchase and Sale Agreement dated
August 7, 2000 between, among others, Central Hudson Gas & Electric
Corporation and Dynegy Power Corporation (the “Agreement”). Further,
also in accordance with the Agreement, certain assets and liabilities of the
Central Hudson Gas & Electric Corporation Savings Incentive Plan (the “Prior
Plan”) were spun off and transferred to the Plan effective as of January 31,
2001.
Eligibility
All
employees of the Employer are eligible to participate in the Plan except (a)
employees covered by a collective bargaining agreement (unless such agreement
provides for coverage under the Plan), (b) leased employees, independent
contractors or individuals who are designated, compensated or otherwise
classified by the Employer as independent contractors, leased employees or other
non-common law employees, (c) nonresident aliens, and (d) individuals who are
deemed to be employees under certain Treasury
regulations. Additionally, effective April 3, 2008, individuals hired
by an Employer on or after April 3, 2008 and who are covered by that certain
Memorandum of Agreement between Dynegy Northeast Generation, Inc. and Local
Union 320 of the International Brotherhood of Electrical Workers, dated March
26, 2008, as ratified on April 3, 2008, are not employees eligible to
participate in the Plan. Each eligible employee becomes eligible to
participate in the Plan as soon as administratively feasible following his or
her date of hire.
Contributions
Participants
may make before-tax contributions (including catch-up contributions if age 50 or
older before the close of the particular Plan year) in 1% increments of their
“Compensation” (as defined by the Plan) up to the IRS limit. Further,
participants may make after-tax contributions of 1%-5% of their
Compensation. A participant may “roll-over” into the Plan amounts
distributed from another eligible retirement plan.
The
Employer contributes to the Plan matching contributions on behalf of each
non-union participant at a rate of 50% of such participant’s before-tax
contributions up to 8% of such participant’s “Compensation” (as defined by the
Plan) per payroll period. The Employer contributes to the Plan
matching contributions on behalf of each union participant at a rate of 36% of
such participant’s before-tax contributions up to 6% of such participant’s
Compensation per payroll period. Effective May 4, 2008, the Employer
matching contribution made on behalf of union participants changed to a rate of
50% of such a participant’s before-tax contributions up to 6% of such
participant’s Compensation per payroll period. In addition, the
Employer may make contributions in order to meet nondiscrimination requirements
as prescribed in the Plan document.
Investment of
Funds
Each
participant has the right upon enrollment to select the investment fund(s) into
which the balance in the participant’s account will be invested in accordance
with the procedures established by the Plan Administrator. A
participant may change the allocation of contributions made to the selected
funds or transfer amounts among investment funds anytime during the Plan year in
accordance with the procedures established by the Plan
Administrator. If a participant does not make investment elections,
the contributions will be invested in the default investment fund selected by
the Plan Administrator for the Plan.
Forfeitures
Any
forfeitures under the Plan are applied as determined by the Plan Administrator
to reduce subsequent Employer matching contributions and/or to pay Plan and
Trust administrative expenses. As of December 31, 2008 and 2007, the
Plan had forfeitures totaling $970 and $121, respectively. During
2008, forfeitures were used to offset $500 in administrative
expenses.
Vesting
Participants
have an immediate 100% vested and nonforfeitable interest in their contributions
and Employer contributions plus actual earnings thereon.
Participant
Accounts
Each
participant’s accounts are credited with the participant’s contributions
(before-tax, after tax, and/or rollover contributions) and allocations of (a)
Employer matching contributions and (b) Plan earnings, and are charged with
allocations of Plan administrative expenses. The benefit to which a
participant is entitled is the balance of the participant’s
accounts.
Participant
Loans
Participants
may borrow from their Plan accounts, but no participant may have more than three
outstanding loans at any given time, and only one of those loans may be used to
acquire any house that within a reasonable period of time is to be used as a
primary residence. Such loans must be in an amount not less than
$500, and, in the aggregate, must not be greater than the lesser of (i) $50,000,
reduced by the highest outstanding loan balance during the one year period
ending on the day before the loan is made, or (ii) 50% of the account balance as
of the last valuation date. Interest is charged on these loans at a
rate commensurate with interest rates charged by persons in the business of
lending money for similar types of loans.
The term
of the loan may not exceed five years, unless the loan is used to acquire a
principal residence in which case the term of the loan may not exceed ten
years. Loan repayments are made by payroll deductions authorized by
the participant while the participant remains employed by the
Employer. A loan may be repaid in whole without
penalty. Interest paid on the loan is credited to the participant’s
account. Loan repayments are allocated to the participant’s accounts
from which the loan was made and invested in accordance with the participant’s
investment elections in effect at the time of such repayment with respect to
such accounts.
Generally,
if a participant terminates employment, retires, becomes totally and permanently
disabled or dies while he or she has an outstanding loan, the outstanding loan
balance will become payable and, if not paid, will be treated as a taxable
distribution of the participant’s accounts.
In-Service
Withdrawals
Participants
may withdraw all or a portion of the value of their after-tax
accounts. A participant who has attained age 59-½ may withdraw all or
a portion of the value of his or her before-tax, catch-up and Employer
contribution accounts, no more frequently than twice each calendar
year. Further, hardship withdrawals may be granted to participants in
the event of an “immediate and heavy financial need” in accordance with the
applicable provisions of the Plan, the Code and the Treasury regulations
promulgated thereunder.
Distributions
Benefits
are paid upon termination of employment (including as a result of normal
retirement), total and permanent disability, or death. Benefits are
paid in one lump sum cash payment in an amount equal to the balance in the
participant’s accounts but may be paid in full shares of Dynegy stock to the
extent invested in the Dynegy Stock Fund (the “Stock Fund”).
Generally,
a participant can defer the receipt of his or her distribution until the April 1
of the calendar year following the later of the calendar year in which he or she
reaches age 70-½ or the calendar year in which he or she terminates
employment. Upon a termination of employment, however, an automatic
lump sum distribution will be made if the participant’s aggregate account
balance is not in excess of $1,000.
Plan Changes and
Amendments
Effective
at various dates in 2006 and 2007, the Plan was amended to incorporate various
amendments permitted and required by the final Code Section 401(k)/(m)
regulations and other Internal Revenue Service guidance, including the
following: incorporate the new definition of Severance from Employment and
related requirements under the new regulations; clarify timing of compensation
for elective deferrals under Code Section 401(k) and Code Section 415
regulations; reflect ACP/ADP testing requirements, minimum required corrective
contributions and recharacterizing of catch-up contributions for testing
purposes under new regulations; incorporate the safe harbor method for
calculating gap period income; add good faith compliance language for final Code
Section 401(k)/(m) regulations; add burial expenses and residential casualty
losses as new hardship events; add special hurricane relief distribution and
loan provisions; and incorporate new Plan termination requirements.
Effective April 2, 2007, as of the
completion of the merger between Dynegy Illinois Inc. (formerly "Dynegy Inc."),
an Illinois corporation, and certain LS Power entities, the Plan was amended to
provide that Dynegy Inc., a Delaware corporation, became the Plan’s sponsor and
that all shares of common stock in the Stock Fund became the common stock of
Dynegy Inc., a Delaware corporation. See above for
information regarding the Dynegy Illinois Inc. Merger. Further,
amendments to the Plan were also made regarding certain administrative
provisions regarding the Plan Administrator.
Effective
January 1, 2008, the Plan was amended in several respects, as
follows: (1) to accept eligible Roth 401(k) distributions as rollover
contributions to the Plan; (2) to allow (in addition to a participant and a
participant’s spouse or eligible former spouse) a non-spouse beneficiary to
elect a direct rollover distribution of all or a portion of his or her Plan
benefit to an eligible retirement plan; and (3) to add a Roth IRA account as an
eligible retirement plan for direct rollover distribution purposes.
Additionally, effective January 1, 2008,
the Plan was amended to change the Employer matching contribution made on behalf
of union participants to a rate of 36% of such a participant’s before-tax
contributions up to 6% of such a participant’s “Compensation” (as defined by the
Plan) per payroll period. Then, effective May 4, 2008, the Employer matching contribution
made on behalf of union participants changed to a rate of 50% of such
participant’s before-tax contributions up to 6% of such participant’s
Compensation per payroll period.
Effective April 3, 2008, individuals
hired by an Employer on or after April 3, 2008 and who are covered by that
certain Memorandum of Agreement between Dynegy Northeast Generation, Inc. and
Local Union 320 of the International Brotherhood of Electrical Workers, dated
March 26, 2008, as ratified on April 3, 2008, are not employees eligible to participate in
the Plan. (Such
individuals are instead eligible to participate in the Dynegy Inc. 401(k)
Savings Plan, provided they meet the other eligibility requirements of that
plan.)
Plan
Termination
Dynegy
intends to continue the Plan indefinitely but reserves the right to terminate
the Plan at any time for any reason subject to the provisions of
ERISA. Subject to certain limitations, the right to amend or modify
the Plan is also reserved by Dynegy. In the event the Plan is
terminated, participants will continue to be fully vested in their account
balances and the net income (or net loss) of the trust fund shall continue to be
allocated in accordance with the Plan until all participant accounts are
distributed.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of
Accounting
The
accompanying financial statements of the Plan are prepared on an accrual basis
of accounting in accordance with U.S. generally accepted accounting principles
(“GAAP”).
Investments
Participant loans included in the loan
fund are valued at cost, which approximates fair value. Purchases and sales of
securities are recorded on a trade-date basis.
The
investments held in the Dynegy Inc. Master Trust (the “Master Trust”) are stated
at fair value based on the latest quoted market values of the underlying
securities. Securities for which no quoted market value is available are
evaluated and valued by Plan management with reference to the underlying
investments, assumptions and methodologies used in arriving at fair value in
accordance with Financial
Accounting Standards Board Statement No. 157, Fair Value
Measurements (FASB
Statement No. 157) (Note 7). Plan interest in the net assets of the
Master Trust is based on the assets held by each plan in the Master Trust on an
actual basis. At December 31, 2008 and 2007, the Plan's interest in the Master
Trust was approximately 6.1% and 5.1%, respectively.
The FASB
issued FSP AAG INV-1 and SOP 94-4-1 Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans (the “FSP”) which requires
benefit-responsive investment contracts held by a defined contribution plan to
be reported at fair value. However, contract value is the relevant measurement
attribute for that portion of the net assets available for benefits of a defined
contribution plan attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would receive if they were to
initiate permitted transactions under the terms of the plan. The FSP requires
the Statement of Net Assets Available for Benefits to present the fair value of
the investment contracts as well as the adjustment of the fully
benefit-responsive investment contracts from fair value to contract value, if
material (Note 5). The Statement of Changes in Net Assets Available for Benefits
is prepared on a contract value basis.
Risks and
Uncertainties
The Plan
provides for several investment options, which are exposed to various risks,
such as interest rate, market and credit risks. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term could materially
affect participants' account balances and the amounts reported in the Statements
of Net Assets Available For Benefits and the Statement of Changes In Net Assets
Available For Benefits.
Income
Net
appreciation (depreciation) of investments is comprised of realized and
unrealized gains and losses. Realized gains or losses represent the difference
between proceeds received upon sale and the average cost of the investment.
Unrealized gain or loss is the difference between market value and cost of
investments retained in the Plan (at financial statement date).
The
Trustee records dividend income as of the ex-dividend date and accrues interest
income as earned.
Expenses
Certain
expenses incurred in the administration of the Plan and the related trusts are
paid by the Employer. These expenses include fees and expenses of the
consultants, auditors, and legal personnel.
Use of
Estimates
The
preparation of these financial statements in conformity with generally accepted
accounting principles requires the Plan Administrator to make estimates and
assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those
estimates.
Distribution of
Benefits
Distributions
of benefits are recorded when paid.
The Plan
received a favorable determination letter dated July 3, 2002, from the Internal
Revenue Service informing Dynegy that the Plan and related trust are qualified
and exempt from income taxes under the provisions of Section 401(a) and Section
501(a) of the Code. The IRS determination letter does not cover the amendments
to the Plan subsequent to July 3, 2002 other than amendments required by the IRS
in connection with its initial determination of the Plan’s qualified status.
However, the Plan Administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of the
Code. Therefore, no provision for income taxes has been included in the Plan’s
financial statements.
Plan
investments are received, invested and held by the
Trustee. Individual investments that represent 5 percent or more of
the Plan’s net assets available for benefits include:
| |
|
December
31
|
|
|
Investments
at fair value as determined by quoted market price
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
| Plan
interest in Dynegy Inc. Master Trust * |
|
$ |
14,659,853 |
|
|
$ |
18,760,109 |
|
*
Includes both participant-directed and nonparticipant-directed
investments. See Note 9.
The
Plan’s interest in the Master Trust (including gains and losses on investments
purchased and sold, as well as held during the year) depreciated in value by
$4,100,256 during 2008.
|
5.
|
FULLY
BENEFIT-RESPONSIVE INVESTMENT
CONTRACTS
|
The
Master Trust has an interest in a common collective trust that invests primarily
in a pool of investment contracts issued by insurance companies and commercial
banks and in contracts that are backed by high quality bonds, bond trusts and
bond mutual funds that are selected by the Trustee.
As
described in Note 2 above, because these contracts are fully benefit-responsive,
contract value is the relevant measurement attribute for that portion of the net
assets available for benefits attributable to the common collective trust.
Contract value represents contributions made under the contract, plus earnings,
less participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value.
The
average yield earned by the contract for the year ended December 31, 2008 was
3.67% and the average yield earned to reflect the actual interest rate credited
to participants for the year ended December 31, 2008 was 3.38%.
There are
no reserves against contract value for credit risk of the contract issuer or
otherwise. The crediting interest rate is based on a formula agreed upon with
the issuer, but it may not be less than zero percent. As of December 31, 2008
and 2007 the contract value of the interest in the common collective trust
approximates fair value and therefore no adjustment has been recorded in the
Statements of Net Assets Available for Benefits.
|
6.
|
PARTICIPATION
IN MASTER TRUST
|
Effective
January 1, 2004, the assets of the Plan were held in the Master Trust with
assets of other qualified retirement plans sponsored by Dynegy, including the
Dynegy Midwest Generation, Inc. 401(k) Savings Plan, Dynegy Midwest Generation,
Inc. 401(k) Savings Plan for Employees Covered Under a Collective Bargaining
Agreement, Dynegy Inc. 401(k) Savings Plan, and Extant, Inc. 401(k)
Plan. Note that effective April
1, 2008, the Extant, Inc. 401(k) Plan was merged into the Dynegy Inc. 401(k)
Savings Plan.
The following
information is presented for the Master Trust:
|
|
|
December
31,
|
|
|
|
|
|
2008
|
|
|
2007
|
|
ASSETS
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
Cash and temporary cash
investments
|
|
$ |
384,898 |
|
|
$ |
358,733 |
|
|
Investments, at fair
value:
|
|
|
|
|
|
|
|
|
|
|
Registered investment
companies
|
|
|
170,310,004 |
|
|
|
265,245,858 |
|
|
Common collective
trust
|
|
|
48,859,568 |
|
|
|
43,019,776 |
|
|
Common stock
|
|
|
1,687,219 |
|
|
|
3,080,980 |
|
|
Employer
securities
|
|
|
17,154,023 |
|
|
|
53,891,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
238,395,712 |
|
|
|
365,597,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables:
|
|
|
|
|
|
|
|
|
|
|
Employer
contributions
|
|
|
195,328 |
|
|
|
172,993 |
|
|
Due from broker for securities
sold
|
|
|
109,250 |
|
|
|
158,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total receivables
|
|
|
304,578 |
|
|
|
331,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
238,700,290 |
|
|
|
365,928,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to broker for securities
purchased
|
|
|
7,446 |
|
|
|
158,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
|
$ |
238,692,844 |
|
|
$ |
365,769,589 |
|
Investment
income/(loss) for the Master Trust is as follows:
|
|
|
Year
ended December 31, 2008
|
|
|
Investment
income:
|
|
|
|
|
Net appreciation in fair value of
investments
|
|
$ |
(139,929,240 |
) |
|
Dividends and
interest
|
|
|
10,059,104 |
|
|
|
|
|
|
|
|
|
|
$ |
(129,870,136 |
) |
The
Master Trust invests a significant portion of its assets in the Company’s common
stock. This investment in the Company’s common stock approximates 7% and 15% of
the Master Trust’s net assets available for benefits as of December 31, 2008 and
2007, respectively. As a result of this concentration, any
significant fluctuation in the market value of this stock could affect
individual Participant accounts and the net assets of the Plan.
|
7.
|
FAIR VALUE
MEASUREMENTS
|
FASB Statement No. 157, establishes
a framework for measuring fair value.
That framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level
1 measurements) and the lowest priority to unobservable inputs (level 3
measurements). The three levels of the fair value hierarchy under
FASB Statement No. 157 are described below:
Level 1 - Inputs to the valuation methodology
are unadjusted quoted prices for identical assets or liabilities in active
markets that the Plan has the ability to access.
|
|
Level 2 - Inputs to the
valuation methodology
include:
|
|
•
|
Quoted prices for similar assets
or liabilities in active markets;
|
|
•
|
Quoted prices for
identical or similar assets or liabilities in inactive markets;
|
|
•
|
Inputs other than quoted prices
that are observable for the asset or liability;
|
|
•
|
Inputs that are derived
principally from or corroborated by observable market data by
correlation or other means.
|
If the
asset or liability has a specified (contractual) term, the
level 2 input must be observable for
substantially the full term of the asset or liability.
Level 3 - Inputs to the valuation
methodology are unobservable and significant to the fair value
measurement.
The asset or liability’s fair value
measurement level within the fair value hierarchy is based on the lowest level
of any input that is significant to the fair value measurement. Valuation
techniques used need to maximize the use of observable inputs and minimize
the use of unobservable inputs.
The following is a
description of the valuation methodologies used for assets measured at fair
value. There have been no changes in the methodologies used
at December 31, 2008 and 2007.
Common stocks,
corporate bonds and U.S. government securities: Valued at the closing price
reported on the active market on which the individual securities are
traded.
Mutual
funds: Valued at the
net asset value (‘NAV”) of shares held by the plan at year
end.
Participant loans: Valued at amortized cost, which
approximates fair value.
Guaranteed investment contract: Valued at fair value by discounting
the related cash flows based on current yields of similar instruments with
comparable durations considering the credit‐worthiness of the issuer (See Note
5).
The methods described above may
produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values. Furthermore, while the
Plan believes its valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a
different fair value measurement at the reporting date.
The following table sets forth by level,
within the fair value hierarchy, the Master Trust’s assets at fair value as
of December 31, 2008 and 2007:
|
|
|
Assets
at Fair Value as of December 31, 2008
|
|
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
|
Cash
|
|
$ |
384,898 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
384,898 |
|
|
Employer
securities
|
|
|
17,154,023 |
|
|
|
- |
|
|
|
- |
|
|
|
17,154,023 |
|
|
Common
collective trust
|
|
|
- |
|
|
|
48,859,568 |
|
|
|
- |
|
|
|
48,859,568 |
|
|
Common
stock
|
|
|
1,687,219 |
|
|
|
- |
|
|
|
- |
|
|
|
1,687,219 |
|
|
Registered
investment companies
|
|
|
170,310,004 |
|
|
|
- |
|
|
|
- |
|
|
|
170,310,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
189,536,144 |
|
|
$ |
48,859,568 |
|
|
$ |
- |
|
|
$ |
238,395,712 |
|
|
|
|
Assets
at Fair Value as of December 31, 2007
|
|
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
|
Cash
|
|
$ |
358,733 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
358,733 |
|
|
Employer
securities
|
|
|
53,891,874 |
|
|
|
- |
|
|
|
- |
|
|
|
53,891,874 |
|
|
Common
collective trust
|
|
|
- |
|
|
|
43,019,776 |
|
|
|
- |
|
|
|
43,019,776 |
|
|
Common
stock
|
|
|
3,080,980 |
|
|
|
- |
|
|
|
- |
|
|
|
3,080,980 |
|
|
Registered
investment companies
|
|
|
265,245,858 |
|
|
|
- |
|
|
|
- |
|
|
|
265,245,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
322,577,445 |
|
|
$ |
43,019,776 |
|
|
$ |
- |
|
|
$ |
365,597,221 |
|
In
addition to the Plan’s interest in the Master Trust, it has participant loans
which are level 3 assets.
|
|
|
Participants
Loans
Year
Ended
December
31, 2008
|
|
|
|
|
|
|
|
Balance,
beginning of year
|
|
$ |
507,041 |
|
|
Net
change
|
|
|
26,476 |
|
|
Balance,
end of year
|
|
$ |
533,517 |
|
|
8.
|
TRANSACTIONS
WITH PARTIES-IN-INTEREST
|
Certain
Plan investments are shares of mutual funds managed by Vanguard Fiduciary Trust
Company. Vanguard Fiduciary Trust Company is the trustee as defined by the Plan
and, therefore, these qualify as party-in-interest
transactions. Additionally, the Plan maintains investments in the
Company’s common stock and participant loans. Fees paid during the
year for legal, accounting, and other professional services rendered by
parties-in-interest were based on customary and reasonable rates for such
services.
Participation
Effective
January 1, 2009, the Plan was amended to provide that all individuals hired (or
rehired) on or after January 1, 2009 are not eligible to participate in the
Plan.
Roth
Contributions
Effective
January 1, 2009, the Plan was amended to provide that participants may make Roth
contributions to the Plan on an after-tax basis. Roth contributions
are included in current taxable income, but earnings on Roth contributions are
tax-free if they are part of a qualified distribution, which is a distribution
that is taken not earlier than the fifth year following the year in which a
participant first made Roth contribution and on or after the date the
participant reaches age 59-½, on account of the participant becoming disabled or
on or after the participant dies. Roth contributions are not eligible
for the Employer match.
SUPPLEMENTAL
SCHEDULE
DYNEGY
NORTHEAST GENERATION, INC. SAVINGS INCENTIVE PLAN
EIN:
74-2928353 PN:
003
Schedule
H Line 4(i) – Schedule of Assets (Held at End of Year)
As of
December 31, 2008
|
[a]
|
[b]
|
[c]
|
[d]
|
[e]
|
|
|
|
|
|
|
|
Party-in-interest
|
Identity
of Issuer, Borrower, Lessor or Similar Party
|
Description
of Investment including Maturity Date, Rate of Interest, Collateral, Par
or Maturity Value
|
Cost
|
Current
Value
|
|
|
|
|
|
|
|
*
|
Participant
Loan
|
Various
maturities and interest rates ranging from 5% - 9.5%
|
-
|
533,517
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
533,517
|
*
Party-in-interest
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustee (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf of the undersigned hereunto duly
authorized.
|
|
Dynegy
Northeast Generation, Inc. Savings Incentive
Plan
|
Date: June
22,
2009 By: /s/ JULIUS
COX
Julius
Cox
Designated
Member – Dynegy Inc.
Benefit
Plans Committee