Use these links to rapidly review the documentTABLE OF CONTENTS DYNEGY HOLDINGS, LLC (A LIMITED LIABILITY COMPANY) DEBTOR-IN-POSSESSION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K/A(Amendment No. 2)

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2011o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                  to




DYNEGY INC.(Exact name of registrant as specified in its charter)

Entity

Commission
File Number

State of
Incorporation

I.R.S. Employer
Identification No.Dynegy Inc.

001-33443

Delaware

20-5653152601 Travis Street, Suite 1400
Houston, Texas(Address of principal
executive offices)





77002(Zip Code)


(713) 507-6400(Registrant's telephone number, including area code)



Securities
registered pursuant to Section12(b) of the Act:

Title of each class

Name of each exchange on which registeredDynegy's common stock, $0.01 par value

New York Stock Exchange


Securities
registered pursuant to Section12(g) of the Act:

None(Title of Class)


Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a
smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No ý

As of June 30, 2011, the aggregate market value of the Dynegy Inc. common stock held by non-affiliates of the registrant was $644,913,117
based on the closing sale price as reported on the New York Stock Exchange.

Number
of shares outstanding of Dynegy Inc's class of common stock, as of March 2, 2012: Common stock, $0.01 par value per share, 122,893,088 shares.

DOCUMENTS INCORPORATED BY REFERENCE





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DYNEGY INC. FORM 10-K/A  EXPLANATORY NOTE

This Amendment No. 2 on Form 10-K/A (the "Amendment") amends our Annual Report on
Form 10-K for the fiscal year ended December 31, 2011, originally filed with the Securities and Exchange Commission ("SEC") on March 8, 2012 (the "Original Filing").
We are filing this Amendment to reflect a correction of the Dynegy Holdings, LLC historical consolidated financial statements and related information for the period from November 8, 2011
through December 31, 2011, which were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 pursuant to Rule 3-09
of Regulation S-X. There were no corrections necessary to the Dynegy Inc. consolidated financial statements.

This
Amendment also includes updated disclosures of nonrecognized subsequent events that have occurred subsequent to the Original Filing, but prior to December 10, 2012 reissuance date.
This Amendment should be read in conjunction with the Original Filing, Amendment No. 1 to the Original Filing, which was filed with the SEC on April 26, 2012, and our other filings made
with the SEC on or subsequent to March 8, 2012.

The
aforementioned is discussed in more detail in the Restatement Note to the accompanying consolidated financial statements beginning on page F-8. The following items
of the Original Filing are amended by this Amendment No. 2:



Unaffected items have not been repeated in this Amendment No. 2.

PLEASE NOTE THAT THE INFORMATION CONTAINED IN THIS AMENDMENT NO. 2, INCLUDING THE FINANCIAL STATEMENTS AND THE NOTES THERETO, DOES NOT REFLECT EVENTS
OCCURRING AFTER THE DATE OF THE ORIGINAL FILING, WITH THE EXCEPTION OF THE ITEM DISCUSSED ABOVE. SUCH EVENTS INCLUDE, AMONG OTHERS, THE EVENTS DESCRIBED IN OUR PERIODIC REPORTS ON FORM 10-Q AND
CURRENT REPORTS ON FORM 8-K AND ANY AMENDMENTS THERETO. FOR A DESCRIPTION OF THESE EVENTS, PLEASE READ OUR EXCHANGE ACT REPORTS FILED SINCE MARCH 8,
2012.

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DYNEGY INC.
FORM 10-K/A



TABLE OF CONTENTS



PagePART IDefinitions


1PART IIItem 8.    Financial Statements and
Supplementary Data


2PART IVItem 15.    Exhibits, Financial Statement
Schedules


2Signatures


14Index to Consolidated Financial Statements


F-1


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PART I

PLEASE NOTE THAT THE INFORMATION CONTAINED IN THIS AMENDMENT, INCLUDING THE FINANCIAL STATEMENTS AND THE NOTES
THERETO, DOES NOT REFLECT EVENTS OCCURRING AFTER THE DATE OF THE ORIGINAL FILING, WITH THE EXCEPTION OF THE ITEM DISCUSSED ABOVE. SUCH EVENTS INCLUDE, AMONG OTHERS, THE EVENTS DESCRIBED IN OUR PERODIC
REPORTS ON FORM 10-Q AND CURRENT REPORTS ON FORM 8-K AND ANY AMENDMENTS THERETO. FOR A DESCRIPTION OF THESE EVENTS, PLEASE READ OUR EXCHANGE ACT REPORTS FILED SINCE MARCH 8,
2012.

DEFINITIONS

Unless the context indicates otherwise, throughout this report, the terms "the Company," "we," "us," "our" and "ours" are used to refer
to Dynegy Inc. and its direct and indirect subsidiaries as presented in our consolidated financial statements. Terms used, but not defined, herein shall have the meanings ascribed to them in
our Original Filing. Effective November 7, 2011, we deconsolidated Dynegy Holdings, LLC ("DH") and its consolidated subsidiaries, which included the operations of our Gas and DNE
segments. Discussions or areas of this Amendment that apply only to Dynegy, or DH, are clearly noted in such discussions or areas.

1

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PART II

Item 8.Financial Statements and Supplementary Data

DH financial statements and financial statement schedule are set forth at pages F-1 through F-61
inclusive, found at the end of this annual report, and are incorporated herein by reference.

PART IV

Item 15.Exhibits, Financial Statement Schedules

(a)   The
following documents, which we have filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, are by this reference incorporated in and made a
part of this annual report:



Exhibit
Number

Description2.1

Agreement and Plan of Merger, dated as of August 13, 2010, among Dynegy Inc., Denali Parent Inc. and Denali Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K of Dynegy Inc. and Dynegy Holdings Inc. filed on August 13, 2010, File No. 000-29311).2.2

Amendment No. 1 to the Agreement and Plan of Merger, dated as of November 16, 2010, among Dynegy Inc., Denali Parent Inc. and Denali Merger Sub Inc. (incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings Inc. filed on November 17, 2010, File No. 000-29311).2.3

Membership Interest Purchase Agreement by and between Dynegy Gas Investments, LLC and Dynegy Inc. dated September 1, 2011 (incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K of Dynegy Holdings, LLC filed on September 8, 2011, File No. 000-29311).2.4

Undertaking Agreement by and between Dynegy Gas Investments, LLC and Dynegy Inc. dated September 1, 2011 (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K of Dynegy
Holdings, LLC filed on September 8, 2011, File No. 000-29311).2.5

Amended and Restated Undertaking Agreement by and between Dynegy Holdings, LLC and Dynegy Inc. (incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K of Dynegy Holdings,
 LLC filed on September 8, 2011, File No. 000-29311).2.6

Agreement and Plan of Merger, dated as of December 15, 2010 among Dynegy Inc., IEH Merger Sub LLC, and IEP Merger Sub Corp. (incorporated herein by reference to Exhibit 2.1 to the Current Report on
Form 8-K of Dynegy Inc. filed on December 15, 2010, File No. 001-33443).


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Exhibit
Number

Description2.7

Amendment No. 1 to the Agreement and Plan of Merger, dated as of February 13, 2011 among Dynegy Inc., IEH Merger Sub LLC, and IEP Merger Sub Corp. (incorporated herein by reference to Exhibit 2.1
to the Current Report on Form 8-K of Dynegy Inc. filed on February 14, 2011, File No. 001-33443).3.1

Dynegy's Second Amended and Restated Certificate of Incorporation, amended as of May 21, 2010 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy
Holdings Inc. filed on May 25, 2010).3.2

Dynegy Inc. Third Amended and Restated Bylaws, as amended on November 17, 2011 (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K of Dynegy Inc. filed on
November 17, 2011, File No. 001-33443).4.1

Subordinated Debenture Indenture between NGC Corporation and The First National Bank of Chicago, as Debenture Trustee, dated as of May 28, 1997 (incorporated by reference to Exhibit 4.5 to the Quarterly
Report on Form 10-Q for the Quarterly Period Ended June 30, 1997 of NGC Corporation, File No. 1-11156).***4.2

Amended and Restated Declaration of Trust among NGC Corporation, Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the Administrative Trustees named therein, dated as of May 28, 1997
(incorporated by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 1997 of NGC Corporation, File No. 1-11156).4.3

Purchase Agreement, dated as of May 22. 1997, by and between NGC Corporation, NGC Corporation Capital Trust I and Lehman Brothers Inc., Salomon Brothers Inc. and Smith Barney Inc. as Exhibit C
to the Amended and Restated Declaration of Trust among NGC Corporation, Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the Administrative Trustees named therein, dated as of May 28, 1997 (incorporated by reference to
Exhibit 4.3 to the Original Filing).4.4

Series A Capital Securities Guarantee Agreement executed by NGC Corporation and The First National Bank of Chicago, as Guarantee Trustee, dated as of May 28, 1997 (incorporated by reference to
Exhibit 4.9 to the Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 1997 of NGC Corporation, File No. 1-11156).4.5

Common Securities Guarantee Agreement of NGC Corporation, dated as of May 28, 1997 (incorporated by reference to Exhibit 4.10 to the Quarterly Report on Form 10-Q for the Quarterly Period Ended
June 30, 1997 of NGC Corporation, File No. 1-11156).4.6

Registration Rights Agreement, dated as of May 28, 1997, among NGC Corporation, NGC Corporation Capital Trust I, Lehman Brothers, Salomon Brothers Inc. and Smith Barney Inc. (incorporated by reference
to Exhibit 4.11 to the Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 1997 of NGC Corporation, File No. 1-11156).4.7

Indenture, dated as of September 26, 1996, restated as of March 23, 1998, and amended and restated as of March 14, 2001, between Dynegy Holdings Inc. and Bank One Trust Company, National
Association, as Trustee (incorporated by reference to Exhibit 4.17 to the Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2000 of Dynegy Holdings Inc., File No. 000-29311).


3

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Exhibit
Number

Description4.8

First Supplemental Indenture, dated July 25, 2003 to that certain Indenture, dated as of September 26, 1996, between Dynegy Holdings Inc. and Wilmington Trust Company, as trustee (incorporated by reference
to Exhibit 99.2 to the Current Report on Form 8-K of Dynegy Inc. filed on July 28, 2003, File No. 1-15659).4.9

Second Supplemental Indenture, dated as of April 12, 2006, to that certain Indenture, originally dated as of September 26, 1996, as amended and restated as of March 23, 1998 and again as of
March 14, 2001, by and between Dynegy Holdings Inc. and Wilmington Trust Company (as successor to JPMorgan Chase Bank, N.A.), as trustee, as supplemented by that certain First Supplemental Indenture, dated as of July 25, 2003
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Dynegy Inc. filed on April 12, 2006, File No. 1-15659).4.10

Third Supplemental Indenture, dated as of May 24, 2007, to that certain Indenture, originally dated as of September 26, 1996, as amended and restated as of March 23, 1998 and again as of March 14,
2001, by and between Dynegy Holdings Inc. and Wilmington Trust Company (as successor to JPMorgan Chase Bank, N.A.), as trustee, as supplemented by that certain First Supplemental Indenture, dated as of July 25, 2003, and that certain Second
Supplemental Indenture, dated as of April 12, 2006 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Dynegy Holdings Inc. filed on May 25, 2007, File No. 000-29311).4.11

Fourth Supplemental Indenture, dated as of May 24, 2007, to that certain Indenture, originally dated as of September 26, 1996, as amended and restated as of March 23, 1998 and again as of March 14,
2001, by and between Dynegy Holdings Inc. and Wilmington Trust Company (as successor to JPMorgan Chase Bank, N.A.), as trustee, as supplemented by that certain First Supplemental Indenture, dated as of July 25, 2003, that certain Second
Supplemental Indenture, dated as of April 12, 2006, and that certain Third Supplemental Indenture, dated as of May 24, 2007 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Dynegy Holdings Inc.
filed on May 25, 2007, File No. 000-29311).4.12

Fifth Supplemental Indenture dated as of December 1, 2009 between Dynegy Holdings Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of
Dynegy Inc. and Dynegy Holdings Inc. filed on December 1, 2009, File No. 001-33443 and 000-29311, respectively).4.13

7.5 percent Senior Unsecured Note Due 2015 (included in Exhibit 4.1 and incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings Inc.
filed on December 1, 2009, File No. 001-33443 and 000-29311, respectively).4.14

Sixth Supplemental Indenture dated as of December 30, 2009 between Dynegy Holdings and Wilmington Trust Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of
Dynegy Inc. and Dynegy Holdings Inc. filed on January 4, 2010, File No. 001-33443 and 000-29311, respectively).4.15

Registration Rights Agreement, effective as of July 21, 2006, by and among Dynegy Holdings Inc. RCP Debt, LLC and RCMF Debt, LLC (incorporated by reference to Exhibit 4.1 to the Current Report
on Form 8-K of Dynegy Inc. filed on July 24, 2006, File No. 1-15659).


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Exhibit
Number

Description4.16

Registration Rights Agreement, dated as of May 24, 2007, by and among Dynegy Holdings Inc. and the several initial purchasers party thereto (incorporated by reference to Exhibit 4.3 to the Current Report on
Form 8-K of Dynegy Holdings Inc. filed on May 25, 2007, File No. 000-29311).4.17

Shareholder Agreement, dated as of August 9, 2009 between Dynegy Inc. and LS Power and its affiliates (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of
Dynegy Inc. filed on August 13, 2009, File No. 001-33443).4.18

Registration Rights Agreement, dated as of September 14, 2006, among Dynegy Acquisition, Inc., LS Power Partners, L.P., LS Power Associates, L.P., LS Power Equity Partners, L.P., LS Power
Equity Partners PIE I, L.P. and LSP Gen Investors, L.P. (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Dynegy Inc. filed on September 19, 2006, File No. 1-15659).4.19

Amendment No. 1 to the Registration Rights Agreement dated September 14 2006 by and between Dynegy Inc. and LS Power and affiliates, dated August 9, 2009 (incorporated by reference to
Exhibit 10.2 to the Current Report on Form 8-K of Dynegy Inc. filed on August 13, 2009, File No. 001-33443).4.20

Purchase Agreement, dated as of March 29, 2006, for the sale of $750,000,000 aggregate principal amount of the 8.375 percent Senior Unsecured Notes due 2016 of Dynegy Holdings Inc. among Dynegy
Holdings Inc. and the several initial purchasers named therein (incorporated by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2006 of Dynegy Inc.,
File No. 1-15659).4.21

Purchase Agreement, dated as of May 17, 2007, by and between Dynegy Holdings Inc. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on
Form 10-Q for Quarterly Period Ended June 30, 2007 of Dynegy Holdings Inc., File No. 000-29311).4.22

Exchange Agreement, dated as of July 21, 2006, by and among Dynegy Holdings Inc., RCP Debt, LLC and RCMF Debt, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K of Dynegy Inc. filed on July 24, 2006, File No. 1-15659).4.23

Registration Rights Agreement dated as of December 1, 2009 by and between Dynegy Holdings Inc. and Adio Bond, LLC (incorporated herein by reference to Exhibit 10.1 to the Current Report on
Form 8-K of Dynegy Inc. filed on December 1, 2009, File No. 001-33443).4.24

Promissory Note by and between Dynegy Holdings, LLC and Dynegy Gas Investments, LLC dated September 1, 2011 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of
Dynegy Holdings, LLC filed on September 8, 2011, File No. 000-29311).10.1

Note Purchase Agreement by and between Dynegy Holdings Inc. and Adio Bond, LLC, dated August 9, 2009 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of
Dynegy Inc. filed on August 13, 2009, File No. 001-33443).10.2

Purchase Agreement, dated as of December 2, 2009, by and among Credit Suisse Securities (USA) and Citigroup Global Markets Inc. (as representatives for additional purchasers named in the Purchase Agreement),
Adio Bond, LLC and Dynegy Holdings Inc. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K by Dynegy Inc. filed on December 7, 2009, File No. 001-33443).


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Exhibit
Number

Description10.3

Credit Agreement, dated as of August 5, 2011, among Dynegy Midwest Generation, LLC, as borrower and the guarantors, lenders and other parties thereto (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).10.4

Credit Agreement dated as of August 5, 2011 among Dynegy Power, LLC and the guarantors, lenders and other parties thereto (incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).10.5

Guarantee and Collateral Agreement, dated as of August 5, 2011 among Dynegy Midwest Generation, LLC, the subsidiaries of the borrower from time to time party thereto and other parties thereto (incorporated
by reference to Exhibit 10.3 to the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).10.6

Guarantee and Collateral Agreement, dated as of August 5, 2011 among Dynegy Power, LLC, the subsidiaries of the borrower from time to time party thereto and other parties thereto (incorporated by reference
to Exhibit 10.4 to the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).***10.7

Letter of Credit Reimbursement and Collateral Agreement, dated as of August 5, 2011 among Dynegy Midwest Generation, LLC and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to
Exhibit 10.5 to the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).10.8

Collateral Trust and Intercreditor Agreement, dated as of August 5, 2011 among Dynegy Coal Investments Holdings, LLC, Dynegy Midwest Generation, LLC, the guarantors and the other parties thereto
(incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).10.9

Collateral Trust and Intercreditor Agreement, dated as of August 5, 2011 among Dynegy Gas Investment Holdings, LLC, Dynegy Power LLC, the guarantors and the other parties thereto (incorporated by
reference to Exhibit 10.7 to the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).***10.10

Letter of Credit Reimbursement and Collateral Agreement, dated as of August 5, 2011 between Dynegy Power LLC and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 10.8 to the
Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).***10.11

Letter of Credit Reimbursement and Collateral Agreement, dated as of August 5, 2011 between Dynegy Holdings Inc. and Credit Suisse AG, Cayman Islands Branch (incorporated by reference to Exhibit 10.9 to
the Current Report on Form 8-K of Dynegy Inc and Dynegy Holdings Inc. filed on August 8, 2011, File No. 001-33443).***10.12

Letter of Credit Reimbursement and Collateral Agreement, dated as of August 5, 2011 among Dynegy Power LLC and Barclays Bank PLC (incorporated by reference to Exhibit 10.21 to the Quarterly Report
on Form 10-Q for the Quarter Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).


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Exhibit
Number

Description10.13

Dynegy Inc. Executive Severance Pay Plan, as amended and restated effective as of January 1, 2008 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. filed
on January 4, 2008, File No. 001-33443).10.14

First Amendment to the Dynegy Inc. Executive Severance Pay Plan effective as of January 1, 2010 (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K for the Fiscal Year
Ended December 31, 2009 of Dynegy Inc, File No. 1-15659).10.15

Second Amendment to the Dynegy Inc. Executive Severance Pay Plan, dated as of September 20, 2010. (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the Quarter
Ended September 30, 2010 of Dynegy Inc, File No. 1-15659).10.16

Third Amendment to the Dynegy Inc. Executive Severance Pay Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. filed on March 22, 2011,
File No. 1-33443).10.17

Fourth Amendment to the Dynegy Inc. Executive Severance Pay Plan, dated as of August 8, 2011(incorporated by reference to Exhibit 10. 1 to the Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 2011 of Dynegy Inc., File No. 1- 33443).10.18

Dynegy Inc. Executive Change in Control Severance Pay Plan effective April 3, 2008 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. filed on
April 8, 1008, File No. 001-33443).10.19

First Amendment to the Dynegy Inc. Executive Change In Control Severance Pay Plan, dated as of September 22, 2010 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for
the Quarter Ended September 30, 2010 of Dynegy Inc, File No. 1-15659).10.20

Dynegy Inc. Excise Tax Reimbursement Policy, effective January 1, 2008 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Dynegy Inc. filed on January 4, 2008,
 File No. 001-33443).10.21

Dynegy Inc. Restoration 401(k) Savings Plan, effective June 1, 2008 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Dynegy Inc. filed on August 7, 2008,
File No. 001-33443).10.22

First Amendment to the Dynegy Inc. Restoration 401(k) Savings Plan, effective June 1, 2008 (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Dynegy Inc. filed
on August 7, 2008, File No. 001-33443).10.23

Second Amendment to Dynegy Inc. Restoration 401(k) Savings Plan, effective January 1, 2012 (incorporated by reference to Exhibit 10.23 to the Original Filing).10.24

Dynegy Inc. Restoration Pension Plan, effective June 1, 2008 (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Dynegy Inc. filed on August 7, 2008,
File No. 001-33443).10.25

First Amendment to the Dynegy Inc. Restoration Pension Plan, effective June 1, 2008 (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q of Dynegy Inc. filed on
August 7, 2008, File No. 001-33443).


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Exhibit
Number

Description10.26

Second Amendment to the Dynegy Inc. Restoration Pension Plan, executed on July 2, 2010 (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Dynegy Inc. and Dynegy
Holdings Inc. filed on August 6, 2010, File No. 000-29311).10.27

Third Amendment to Dynegy Inc. Restoration Pension Plan, effective January 1, 2012 (incorporated by reference to Exhibit 10.27 to the Original Filing).10.28

Form of Phantom Stock Unit Award AgreementVice President and above, dated March 7, 2011 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the Quarter Ended
March 31, 2011 of Dynegy Inc., File No. 1- 33443).10.29

Form of Phantom Stock Unit Award AgreementManaging Director, dated March 7, 2011(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the Quarter Ended March 31,
2011 of Dynegy Inc., File No. 1- 33443).10.30

Phantom Stock Unit Award Agreement between Dynegy Inc. and E. Hunter Harrison dated June 30, 2011 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.31

Non-Qualified Stock Option Award Agreement between Dynegy Inc. and Robert C. Flexon date July 11, 2011(incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.32

Stock Appreciation Right Award Agreement between Dynegy Inc. and Robert C. Flexon dated July 11, 2011(incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.33

Non-Qualified Stock Option Award Agreement between Dynegy Inc. and Kevin T. Howell date July 5, 2011(incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.34

Non-Qualified Stock Option Award Agreement between Dynegy Inc. and Clint C. Freeland date July 5, 2011(incorporated by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.35

Non-Qualified Stock Option Award Agreement between Dynegy Inc. and Carolyn Burke dated August 30, 2011 (incorporated by reference to Exhibit 10. 3 to the Quarterly Report on Form 10-Q for the
Quarter Ended September 30, 2011 of Dynegy Inc., File No. 1- 33443).10.36

Non-Qualified Stock Option Award Agreement between Dynegy Inc. and Catherine Callaway dated September 26, 2011 (incorporated by reference to Exhibit 10. 4 to the Quarterly Report on Form 10-Q for
the Quarter Ended September 30, 2011 of Dynegy Inc., File No. 1- 33443).10.37

Consulting Agreement and Release dated March 8, 2011between Dynegy Inc. and Holli C. Nichols. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A of Dynegy Inc.
filed on March 10, 2011, File No. 1-33443).10.38

Severance Agreement and Release by and between Dynegy Inc. and Bruce A. Williamson (incorporated by reference to Exhibit 10.47 to the Annual Report on Form 10-K of Dynegy Inc. for the year ended
December 31, 2010, File No. 1-33443).


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Exhibit
Number

Description10.39

Independent Contractor Agreement between Dynegy Inc. and David W. Biegler (incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K of Dynegy Inc. for the year ended
December 31, 2010, File No. 1-33443).10.40

Transition Services Agreement between Dynegy Inc. and Lynn Lednicky dated June 28, 2011(incorporated by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.41

Employment Agreement between Dynegy Inc. and Robert Flexon dated June 22, 2011(incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2011 of Dynegy Inc., File No. 1- 33443).10.42

Employment Agreement between Dynegy Inc. and Kevin Howell dated June 22, 2011(incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2011
of Dynegy Inc., File No. 1- 33443).10.43

Employment Agreement between Dynegy Inc. and Clint C. Freeland dated June 23, 2011(incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2011 of Dynegy Inc., File No. 1- 33443).10.44

Employment Agreement between Dynegy Inc. and Carolyn J. Burke dated July 5, 2011(incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q for the Quarter Ended June 30,
2011 of Dynegy Inc., File No. 1- 33443).10.45

Employment Agreement between Dynegy Inc. and Catherine Callaway dated September 16, 2011 (incorporated by reference to Exhibit 10. 2 to the Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 2011 of Dynegy Inc., File No. 1- 33443).10.46

Form Award Agreement for 2012 Long Term Incentive Program AwardCash (CEO) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. filed on January 9, 2012
File No. 001-33443).10.47

Form Award Agreement for 2012 Long Term Incentive Program AwardCash (EVP) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Dynegy Inc. filed on January 9, 2012
File No. 001-33443).10.48

Dynegy Inc. 2009 Phantom Stock Plan (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Dynegy Inc. filed on March 10, 2009,
File No. 001-33443).10.49

First Amendment to the Dynegy Inc. 2009 Phantom Stock Plan, dated as of July 8, 2011(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the Quarter Ended
June 30, 2011 of Dynegy Inc., File No. 1- 33443).10.50

Dynegy Inc. Deferred Compensation Plan, amended and restated, effective January 1, 2002(incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-8 of Dynegy Inc.,
Registration No. 333-76080).10.51

Amendment to the Dynegy Inc. Deferred Compensation Plan, dated as of April 2, 2007 (incorporated by reference to Exhibit 10.38 to the Current Report on Form 8-K of Dynegy Holdings Inc. filed
on April 6, 2007, File No. 000-29311).


9

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Table of Contents

Exhibit
Number

Description10.52

Dynegy Inc. Deferred Compensation Plan for Certain Directors, as amended and restated, effective January 1, 2008 (incorporated by reference to Exhibit 10.55 to the Annual Report on Form 10-K for the
Fiscal Year ended December 31, 2009, filed on February 26, 2009, File No. 001-33443).10.53

Trust under Dynegy Inc. Deferred Compensation Plan for Certain Directors, effective January 1, 2009 (incorporated by reference to Exhibit 10.56 to the Annual Report on Form 10-K for the Fiscal Year
ended December 31, 2009, filed on February 26, 2009, File No. 001-33443).10.54

Dynegy Inc. Incentive Compensation Plan, as amended and restated effective May 21, 2010 (incorporated by reference to Exhibit 10.34 to the Annual Report on Form 10-K for the Fiscal Year ended
December 31, 2010, File No. 001-33443)10.55

Dynegy Inc. 2010 Long Term Incentive Plan (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 of Dynegy Inc. filed on May 26, 2010,
File No. 333-167091).10.56

Dynegy Inc. 2000 Long Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1999 of Dynegy Inc.,
File No. 1-11156).10.57

Amendment to the Dynegy Inc. 2000 Long Term Incentive Plan effective January 1, 2006 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K of Dynegy Inc. filed on
March 17, 2006, File No. 1-15659).10.58

Second Amendment to the Dynegy Inc. 2000 Long Term Incentive Plan, dated as of April 2, 2007 (incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K of Dynegy
Holdings Inc. filed on April 6, 2007, File No. 000-29311).10.59

Dynegy Inc. 2002 Long Term Incentive Plan (incorporated by reference to Appendix A to the Definitive Proxy Statement on Schedule 14A of Dynegy Inc., File No. 1-15659, filed with the SEC
on April 9, 2002).10.60

Amendment to the Dynegy Inc. 2002 Long Term Incentive Plan, effective January 1, 2006 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K of Dynegy Inc. filed on
March 17, 2006, File No. 1-15659).10.61

Second Amendment to the Dynegy Inc. 2002 Long Term Incentive Plan, dated as of April 2, 2007 (incorporated by reference to Exhibit 10.36 to the Current Report on Form 8-K of Dynegy
Holdings Inc. filed on April 6, 2007, File No. 000-29311).10.62

Dynegy Inc. Deferred Compensation Plan Trust Agreement (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-8 of Dynegy Inc.,
Registration No. 333-76080).10.63

Amendment to Dynegy Inc. Deferred Compensation Plan Trust Agreement (Vanguard), dated as of April 2, 2007 (incorporated by reference to Exhibit 10.54 to the Current Report on Form 8-K of Dynegy
Holdings Inc. filed on April 6, 2007, File No. 000-29311).10.65

Baldwin Consent Decree, approved May 27, 2005 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Dynegy Inc. filed on May 31, 2005,
File No. 1-15659).


10

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Table of Contents

Exhibit
Number

Description10.66

Letter Agreement dated March 8, 2011 by and between Dynegy Inc. and IEH Merger Sub LLC, Icahn Enterprises Holdings L.P., IEP Merger Sub Inc., Icahn Partners LP, Icahn Partners Master
Fund LP, Icahn Partners Master Fund II LP, Icahn Partners Master Fund III LP, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Onshore LP, Icahn Offshore LP, Icahn Capital LP,
IPH GP LLC, Icahn Enterprises L.P., Icahn Enterprises G.P. Inc., Beckton Corp., and Carl C. Icahn. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. filed on
March 10, 2011, File No. 1-33443).10.67

Assignment Agreement by and among Dynegy Gas Investments, LLC, Dynegy Holdings, LLC and Dynegy Inc. dated September 1, 2011 (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K of Dynegy Holdings, LLC filed on September 8, 2011, File No. 000-29311).10.68

Restructuring Support Agreement, dated November 7, 2011, among Dynegy Inc., Dynegy Holdings, LLC and certain beneficial holders of notes issued by Dynegy Holdings, LLC (incorporated by reference to
Exhibit 99.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on November 8, 2011, File No. 001-33443).10.69

First Amendment to the Restructuring Support Agreement, dated December 9, 2011 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings,
 LLC filed on December 9, 2011, File No. 001-33443).10.70

Second Amendment to the Restructuring Support Agreement, dated December 16, 2011 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings,
 LLC filed on December 20, 2011, File No. 001-33443).10.71

Amended and Restated Restructuring Support Agreement, dated December 26, 2011 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings,
 LLC filed on December 27, 2011, File No. 001-33443).10.72

Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC proposed by Dynegy Holdings, LLC and Dynegy Inc., dated December 1, 2011 (incorporated by reference to Exhibit 99.1 to the
Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on December 2, 2011, File No. 001-33443).10.73

Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC proposed by Dynegy Holdings, LLC and Dynegy Inc., dated January 19, 2012 (incorporated by reference to Exhibit 99.1 to
the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on January 23, 2012, File No. 001-33443).10.74

Second Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC proposed by Dynegy Holdings, LLC and Dynegy Inc., dated March 6, 2012 (incorporated by reference to Exhibit 99.1
to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on March 7, 2012, File No. 001-33443).10.75

Description of the Plan Secured Notes, as Exhibit C to the Plan of Reorganization, dated December 23, 2011 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of
Dynegy Inc. and Dynegy Holdings, LLC filed on December 27, 2011, File No. 001-33443).


11

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Table of Contents

Exhibit
Number

Description10.76

Description of the Plan Secured Notes, as Exhibit C to the Amended Plan of Reorganization, dated January 19, 2012 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K of
Dynegy Inc. and Dynegy Holdings, LLC filed on January 23, 2012, File No. 001-33443).10.77

Description of the Plan Secured Notes, as Exhibit C to the Second Amended Plan of Reorganization, dated March 6, 2012 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K of
Dynegy Inc. and Dynegy Holdings, LLC filed on March 7, 2011, File No. 001-33443).10.78

Certificate of Designation for the Plan Preferred Stock, as Exhibit D to the Plan of Reorganization dated December 23, 2011 (incorporated by reference to Exhibit 99.3 to the Current Report on
Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on December 27, 2011, File No. 001-33443).10.79

Certificate of Designation for the Plan Preferred Stock, as Exhibit D to the Second Amended Plan of Reorganization, dated March 6, 2012 (incorporated by reference to Exhibit 99.4 to the Current Report
on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on March 7, 2012, File No. 001-33443).10.80

Disclosure Statement Related to the Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by Dynegy Holdings, LLC and Dynegy Inc. (incorporated by reference to Exhibit 99.2 to
the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on December 2, 2011, File No. 001-33443).10.81

Disclosure Statement Related to the Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by Dynegy Holdings, LLC and Dynegy Inc., dated January 19, 2012 (incorporated by
reference to Exhibit 99.2 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on January 23, 2012, File No. 001-33443).10.82

Disclosure Statement Related to the Second Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by Dynegy Holdings, LLC and Dynegy Inc., dated March 6, 2012
(incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on March 7, 2012, File No. 001-33443).10.83

Dynegy Inc., Dynegy Holdings, LLC and certain of its affiliates and subsidiaries and Resources Capital Management Corporation and certain of its affiliates and subsidiaries Binding Term Sheet, dated
December 13, 2011 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Dynegy Inc. and Dynegy Holdings, LLC filed on December 14, 2011, File No. 001-33443).14.1

Dynegy Inc. Code of Ethics for Senior Financial Professionals, as amended on November 16, 2011 (incorporated by reference to Exhibit 14.1 to the Current Report on Form 8-K filed on November 17,
 2011 File No. 001-33443).21.1

Subsidiaries of the Registrant (Dynegy Inc.) (incorporated by Reference to Exhibit 21.1 to the Original Filing).23.1

Consent of Ernst & Young LLP (Dynegy Inc.) (incorporated by Reference to Exhibit 23.1 to the Original Filing).**31.1

Chief Executive Officer Certification Pursuant to Rule 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


12

---



Table of Contents

Exhibit
Number

Description**31.2

Chief Financial Officer Certification Pursuant to Rule 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1

Chief Executive Officer Certification Pursuant to 18 United States Code Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2

Chief Financial Officer Certification Pursuant to 18 United States Code Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*101.INS

XBRL Instance Document*101.SCH

XBRL Taxonomy Extension Schema Document*101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document*101.DEF

XBRL Taxonomy Extension Definition Linkbase Document*101.LAB

XBRL Taxonomy Extension Label Linkbase Document*101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document


*XBRL
information is furnished and not filed for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities
Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be
incorporated by reference into any registration statement, prospectus or other document. Previously filed with the Original Filing.**Filed
herewith***Certain
exhibits, attachments or schedules to the exhibits filed herewith were never prepared or used by the parties in connection with the transactions
which are the subject of the filed exhibit and therefore no actual exhibit, attachment or schedule exists.Pursuant
to Securities and Exchange Commission Release No. 33-8238, this certification will be treated as "accompanying" this
report and not "filed" as part of such report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liability of
Section 18 of the Exchange Act, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.Management
contract or compensation plan.


13

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Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

DYNEGY INC.Date: December 10, 2012

By:

/s/ ROBERT C. FLEXON Robert C. Flexon President and Chief Executive Officer


14

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Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS



PageConsolidated Financial Statements (Restated)Report of Independent Registered Public Accounting Firm

F-2Consolidated Balance Sheet:
December 31, 2011

F-3Consolidated Statement of Operations:
For the period from November 8, 2011 through December 31, 2011

F-4Consolidated Statement of Comprehensive Loss:
For the period from November 8, 2011 through December 31, 2011

F-5Consolidated Statement of Cash Flows:
For the period from November 8, 2011 through December 31, 2011

F-6Consolidated Statement of Changes in Member's Equity:
For the period from November 8, 2011 through December 31, 2011

F-7Notes to Consolidated Financial Statements

F-8


F-1

---





Table of Contents

Report of Independent Registered Public Accounting Firm

The
Board of Directors
and Member of Dynegy Holdings, LLC

We
have audited the accompanying consolidated balance sheet of Dynegy Holdings, LLC (the "Company") as of December 31, 2011, and the related consolidated statements of
operations, comprehensive loss, cash flows, and changes in member's equity for the period from November 8, 2011 through December 31, 2011. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dynegy Holdings, LLC at
December 31, 2011, and the consolidated results of its operations and its cash flows for the period from November 8, 2011 through December 31, 2011, in conformity with U.S.
generally accepted accounting principles.

The
accompanying consolidated financial statements have been prepared assuming that Dynegy Holdings, LLC will continue as a going concern. As more fully described in
Notes 1 and 3, Dynegy Holdings, LLC and certain of its subsidiaries filed for relief under Chapter 11 of Title 11 of the United States Code on November 7, 2011. This
condition raises substantial doubt about Dynegy Holdings, LLC's ability to continue as a going concern. Management's plans in regard to this matter are also described in Notes 1 and 3.
The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.

As
discussed in the Restatement Note, the consolidated financial statements have been restated to correct an error in the income tax provision and deferred income taxes.

/s/
Ernst & Young, LLP
Houston, Texas
March 8, 2012
Except as it relates to the matter discussed in the Restatement Note, as to which the date is
December 10, 2012

F-2

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        CONSOLIDATED BALANCE SHEET        See
Restatement Note        December 31, 2011        (in millions)

RestatedASSETSCurrent AssetsCash and cash equivalents

$
398Restricted cash and investments


159Accounts receivable, net of allowance for doubtful accounts of $12


147Accounts receivable, affiliates


26Interest receivable, affiliate


8Inventory


65Assets from risk-management activities


2,615Assets from risk-management activities, affiliates


2Broker margin account


23Prepayments and other current assets


126Total Current Assets


3,569Property, Plant and Equipment


3,911Accumulated depreciation


(1,090
)Property, Plant and Equipment, Net


2,821Other AssetsRestricted cash and investments


455Assets from risk-management activities


26Intangible assets


92Undertaking receivable, affiliate


1,250Deferred income taxes


44Other long-term assets


54Total Assets

$
8,311LIABILITIES AND STOCKHOLDER'S EQUITYCurrent LiabilitiesAccounts payable

$
80Accounts payable, affiliates


47Accrued interest


1Deferred income taxes


50Accrued liabilities and other current liabilities


64Liabilities from risk-management activities


2,798Liabilities from risk-management activities, affiliates


4Notes payable and current portion of long-term debt


7Total Current Liabilities


3,051Liabilities subject to compromise


4,012Long-Term Debt


1,069Other LiabilitiesLiabilities from risk-management activities


20Liabilities from risk-management activities, affiliates


3Other long-term liabilities


124Total Liabilities


8,279Commitments and Contingencies (Note 17)Member's Equity


32Total Liabilities and Member's Equity

$
8,311




See the notes to the consolidated financial statements.

F-3

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        CONSOLIDATED STATEMENT OF OPERATIONS    
FOR THE PERIOD FROM NOVEMBER 8, 2011 THROUGH DECEMBER 31, 2011        See Restatement Note        (in millions)

RestatedRevenues

$
50Cost of sales


(70
)Operating and maintenance expense, exclusive of depreciation shown separately below


(36
)Depreciation and amortization expense


(12
)General and administrative expenses


(7
)Restructuring charges


(1
)Operating loss


(76
)Bankruptcy reorganization charges


(666
)Interest expense


(23
)Other income and expense, net


14Loss before income taxes


(751
)Income tax benefit


188Net loss

$
(563
)




See the notes to the consolidated financial statements.

F-4

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS        FOR THE PERIOD FROM NOVEMBER 8, 2011 THROUGH DECEMBER 31, 2011        See Restatement Note        (in millions)

RestatedNet loss

$
(563
)Changes in cash flow hedging activities, net (net of tax benefit of $3)


(2
)Actuarial loss and amortization of unrecognized prior service cost (net of tax expense of $1)


2Comprehensive loss.

$
(563
)




See the notes to the consolidated financial statements.

F-5

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        CONSOLIDATED STATEMENT OF CASH FLOWS    
FOR THE PERIOD FROM NOVEMBER 8, 2011 THROUGH DECEMBER 31, 2011        See Restatement Note        (in millions)

RestatedCASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(563
)Adjustments to reconcile income (loss) to net cash flows from operating activities:Depreciation and amortization


14Bankruptcy reorganization charges


663Risk-management activities


53Risk management activities, affiliates


(5
)Deferred taxes


(188
)Other


7Changes in working capital:Accounts receivable


28Inventory


(2
)Broker margin account


36Prepayments and other assets


8Accounts payable and accrued liabilities


33Affiliate transactions


(16
)Changes in non-current assets


(9
)Changes in non-current liabilities


(4
)Net cash provided by operating activities


55CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures


(23
)Decrease in restricted cash


66Net cash provided by investing activities


43CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of borrowings


(3
)Net cash used in financing activities


(3
)Net increase in cash and cash equivalents


95Cash and cash equivalents, beginning of period


303Cash and cash equivalents, end of period

$
398




See the notes to the consolidated financial statements.

F-6

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S EQUITY
    FOR THE PERIOD FROM NOVEMBER 8, 2011 THROUGH DECEMBER 31, 2011        See Restatement Note        (in millions)

Member's
Contributions

Affiliate
Receivable

Accumulated
Other
Comprehensive
Income

Accumulated
Deficit

TotalNovember 7, 2011 (Restated)

$
5,135

$
(871
)
$
1

$
(3,695
)
$
570Net loss (Restated)











(563
)

(563
)Affiliate activity (Note 15)





25








25December 31, 2011 (Restated)

$
5,135

$
(846
)
$
1

$
(4,258
)
$
32




See the notes to the consolidated financial statements.

F-7

---





Table of Contents



DYNEGY HOLDINGS, LLC        (A LIMITED LIABILITY COMPANY)        DEBTOR-IN-POSSESSION        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        (RESTATED)

PLEASE NOTE THAT THIS AMENDMENT INCLUDES UPDATED DISCLOSURES OF NONRECOGNIZED SUBSEQUENT EVENTS THAT HAVE OCCURRED SUBSEQUENT TO THE
ORIGINAL FILING, BUT PRIOR TO THE DECEMBER 10, 2012 REISSUANCE DATE.

Restatement Note

In addition to the disclosure noted above, the accompanying financial statements have been restated to correct an error in the
accounting for income taxes. The error resulted from an understatement of valuation allowances associated with deferred tax assets recorded upon the transfer of Dynegy Coal HoldCo to
Dynegy Inc. on September 1, 2011 and a related overstatement of the valuation allowances associated with other deferred tax assets at December 31, 2011. The error resulted in an
understatement of approximately $210 million in DH's income tax benefit for the period November 8, 2011 through December 31, 2011 and an understatement of approximately
$6 million in DH's net deferred tax liability as of December 31, 2011.

The
restatement affects Note 4Condensed Combined Financial Statements of the Debtor Entities, Note 16Income Taxes and
Note 19Segment Information. The restatement had no effect on our previously reported net cash provided by (used in) operating activities, investing activities or financing
activities for any period presented.

Summary.A synopsis of the aggregate financial impact of the restatement on the amounts originally reported in the Original
Filing is as follows:

RESTATED SELECTED BALANCE SHEET DATA  December 31, 2011  (in millions)

As previously
reported

Restatement
Effect

As RestatedOther AssetsDeferred income taxes

$



44

$
44Total Assets

$
8,267


44

$
8,311Current LiabilitiesDeferred income taxes

$



50

$
50Total Current Liabilities

$
3,001


50

$
3,051Total Liabilities

$
8,229


50

$
8,279Member's Equity

$
38


(6
)
$
32Total Liabilities and Member's Equity

$
8,267


44

$
8,311


RESTATED SELECTED STATEMENT OF OPERATIONS DATA  FOR THE PERIOD FROM NOVEMBER 8, 2011 THROUGH DECEMBER 31, 2011  (in millions)

As previously
reported

Restatement
Effect

As RestatedIncome tax benefit (expense)

$
(22
)

210

$
188Net loss

$
(773
)

210

$
(563
)


In
addition to the above, net loss and deferred taxes also changed by $210 million to $563 million and $188 million, respectively, on the consolidated statement of
cash flows.

F-8

---



Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 1Organization and Operations

Dynegy Holdings, LLC ("DH" and, together with its subsidiaries, "we", "us" or "our") is a holding company and we conduct substantially all of our business operations through our
subsidiaries. Our current business operations are focused primarily on the power generation sector of the energy industry. We report the results of our power generation business as two separate
segments: (i) the Gas segment ("Gas"), and (ii) the Dynegy Northeast segment ("DNE"). Our consolidated financial results also reflect corporate-level expenses such as interest and
depreciation and amortization. General and administrative expenses are allocated to each reportable segment. Subsidiaries in our Gas and DNE segments have entered into service agreements with certain
of our affiliates. Please read Note 15Related Party Transactions for further discussion of the service agreements.

The
Gas segment includes Dynegy Power, LLC ("DPC"), which owns, directly and indirectly, all of our wholly-owned natural gas-fired power generation facilities. DPC, a
bankruptcy remote entity, and its direct and indirect subsidiaries are organized into a ring-fenced group for the benefit of the creditors of DPC.

Chapter 11 Filings.On November 7, 2011, we and four of our wholly owned subsidiaries, Dynegy Northeast Generation,
 Inc., Hudson
Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C. (collectively, the "Debtor Entities") filed voluntary petitions (the "Chapter 11 Cases") for relief under Chapter 11
of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York, Poughkeepsie Division (the "Bankruptcy Court"). The
Chapter 11 Cases were assigned to the Honorable Cecelia G. Morris and are being jointly administered for procedural purposes only. None of our direct or indirect subsidiaries other than the
four subsidiary Debtor Entities named above filed voluntary petitions for relief and are not debtors under Chapter 11 of the Bankruptcy Code and consequently, continue to operate their business
in the ordinary course. Please read Note 3Chapter 11 Cases for further discussion.

We
are a wholly-owned subsidiary of Dynegy Inc. ("Dynegy") and we have historically been consolidated by Dynegy in its consolidated financial statements. However, as a result of
the Chapter 11 Cases, on November 7, 2011, Dynegy was required to deconsolidate its investment in DH and Dynegy began accounting for its investment in DH as an equity method investment.
These consolidated financial statements for the period from November 8, 2011 through December 31, 2011, the period during which DH was accounted for as an equity method investment by
Dynegy, are being prepared pursuant to Securities and Exchange Commission Regulation S-X 3-09 for inclusion in Dynegy's Annual Report on Form 10-K for
the year ended December 31, 2011.

Going Concern.Our accompanying consolidated financial statements have been prepared assuming that we will continue as a going
concern, which
contemplates realization of assets and the satisfaction of liabilities in the normal course of business. However, continued low power prices over the past several years have had a significant adverse
impact on our business and continue to negatively impact our projected future liquidity.

On
November 7, 2011, DH had significant debt service requirements in connection with its outstanding notes and debentures, and there were significant payment obligations related
to the

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 1Organization and Operations (Continued)

leasehold
interests in the Danskammer and Roseton facilities. On November 7, 2011, the Debtor Entities filed the Chapter 11 Cases. None of our direct or indirect subsidiaries, other than
the four subsidiary Debtor Entities named above, sought relief under Chapter 11 of the Bankruptcy Code, and none of those entities are debtors under Chapter 11 of the Bankruptcy Code.
Please read Note 3Chapter 11 Cases for further information.

Our
ability to continue as a going concern is dependent on many factors, including, among other things, the generation by DPC of sufficient positive operating results to enable DPC to
make certain restricted distributions to its parent (as described in Note 14Debt), the terms and conditions of an approved plan of reorganization that allows us to emerge from
bankruptcy (as described in Note 3Chapter 11 Cases) and the related outcome of the Bondholder litigation (as described in Note 17Commitments and
Contingencies), execution of any further restructuring strategies, and the successful execution of the company-wide cost reduction initiatives that are ongoing. The accompanying
consolidated financial statements do not include any adjustments that might result from the outcome of the foregoing uncertainties.

Accounting for Reorganization.The accompanying consolidated financial statements have been prepared in accordance with
Financial Accounting
Standards Board Accounting Standards Codification ("ASC") 852, Reorganizations, and on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. However, as a result of the Chapter 11 Cases, such realization of assets and satisfaction of liabilities are subject to a significant number of uncertainties. Our
consolidated financial statements do not reflect adjustments that might be required if we (or the Debtor Entities) are unable to continue as a going concern. ASC 852 requires the following for the
Debtor Entities:



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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 1Organization and Operations (Continued)



Note 2Summary of Significant Accounting Policies

Use of Estimates.The preparation of consolidated financial statements in conformity with generally accepted accounting
principles ("GAAP") requires
management to make informed estimates and judgments that affect our reported financial position and results of operations based on currently available information. We review significant estimates and
judgments affecting our consolidated financial statements on a recurring basis and record the effect of any necessary adjustments. Uncertainties with respect to such estimates and judgments are
inherent in the preparation of financial statements. Estimates and judgments are used in, among other things, (i) developing fair value assumptions, including estimates of future cash flows and
discount rates, (ii) analyzing tangible and intangible assets for possible impairment, (iii) estimating the useful lives of our assets, (iv) assessing future tax exposure and the
realization of deferred tax assets, (v) determining amounts to accrue for
contingencies, guarantees, indemnifications and estimated allowed claims for pre-petition liabilities, and (vi) estimating various factors used to value our pension assets and
liabilities. Actual results could differ materially from our estimates.

Principles of Consolidation.The accompanying consolidated financial statements include our accounts and the accounts of our
majority-owned or
controlled subsidiaries. Intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents.Cash and cash equivalents consist of all demand deposits and funds invested in highly liquid
short-term
investments with original maturities of three months or less.

Restricted Cash and Investments.Restricted cash and investments represent cash that is not readily available for general purpose
cash needs.
Restricted cash and investments are classified as a current or long-term asset based on the timing and nature of when or how the cash is expected to be used or when the restrictions are
expected to lapse. We include all changes in restricted cash and investments in

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

investing
cash flows on the consolidated statement of cash flows. Please read Note 14DebtRestricted Cash and Investments for further discussion.

Accounts Receivable and Allowance for Doubtful Accounts.We record accounts receivable at the net realizable value when the
product or service is
delivered to the customer. We establish provisions for losses on accounts receivable if it becomes probable we will not collect all or part of outstanding balances. We review collectability and
establish or adjust our allowance as necessary. We primarily use a percent of balance methodology and methodologies involving historical levels of write-offs. The specific identification
method is also used in certain circumstances.

Unconsolidated Investments.We use the equity method of accounting for investments in affiliates over which we exercise
significant influence,
generally occurring in ownership interests of 20 percent to 50 percent, and also occurring in lesser ownership percentages due to voting rights or other factors. Our share of net income
(loss) from these affiliates is reflected in the consolidated statement of operations as earnings (losses) from unconsolidated investments. All investments in unconsolidated affiliates are
periodically assessed for other-than-temporary declines in value, with write-downs recognized in earnings from unconsolidated investments in the consolidated statement of
operations.

Inventory.Our natural gas, coal, emissions allowances and fuel oil inventories are carried at the lower of weighted average
cost or market. Our
materials and supplies inventory is carried at the lower of cost or market using the specific identification method. We use the average cost method to determine cost.

Property, Plant and Equipment.Property, plant and equipment, which consists principally of power generating facilities,
including capitalized
interest, is recorded at historical cost. Expenditures for major replacements, renewals and major maintenance are capitalized and depreciated over the expected maintenance cycle. We consider major
maintenance to be expenditures incurred on a cyclical basis to maintain and prolong the efficient operation of our assets. Expenditures for repairs and minor renewals to maintain assets in operating
condition are expensed. Depreciation is provided using the straight-line method over the estimated economic service lives of the assets, ranging from 3 to 40 years.

Composite
depreciation rates (which we refer to as composite rates) are applied to functional groups of assets having similar economic characteristics. The estimated economic service
lives of our functional asset groups are as follows:

Asset Group

Range of YearsPower generation facilities


7 to 40Buildings and improvements


10 to 39Office and miscellaneous equipment


3 to 20


Gains
and losses on sales of individual assets or asset groups are reflected in operating profit (loss) in the consolidated statement of operations. We assess the carrying value of our
property, plant and equipment to determine if an impairment is indicated when a triggering event occurs. If an impairment

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

is
indicated, the amount of the impairment loss recognized would be determined by the amount by which the book value exceeds the estimated fair value of the assets. The estimated fair value may
include estimates based upon discounted cash-flow projections, recent comparable market transactions or quoted prices to determine if an impairment loss is required. For assets identified
as held for sale, the book value is compared to the estimated sales price less costs to sell.

Intangible Assets.Intangible assets represent the fair value of assets, apart from goodwill, that arise from contractual rights
or other legal
rights. We record only those intangible assets that are distinctly separable from goodwill and can be sold, transferred, licensed, rented, or otherwise exchanged in the open market. Additionally, we
recognize as intangible assets those assets that can be exchanged in combination with other rights, contracts, assets or liabilities.

We
initially record and measure intangible assets based on the fair value of those rights transferred in the transaction in which the asset was acquired. Those measurements are based on
quoted market
prices for the asset, if available, or measurement techniques based on the best information available such as a present value of future cash flows. Present value measurement techniques involve
judgments and estimates made by management about prices, cash flows, discount factors and other variables, and the actual value realized from those assets could vary materially from these judgments
and estimates. We amortize our definite-lived intangible assets based on the useful life of the respective asset as measured by the life of the underlying contract or contracts. Intangible assets that
are not subject to amortization are subjected to impairment testing on an annual basis or when a triggering event occurs, and an impairment loss is recognized if the carrying amount of an intangible
asset exceeds its fair value.

Asset Retirement Obligations.We record the present value of our legal obligations to retire tangible, long-lived assets on our
balance
sheet as liabilities when the liability is incurred. Significant judgment is involved in estimating future cash flows associated with such obligations, as well as the ultimate timing of the cash
flows. Our AROs relate to activities such as landfill capping, dismantlement of power generation facilities, future removal of asbestos containing material from certain power generation facilities,
closure and post-closure costs, environmental testing, remediation, monitoring and land and equipment lease obligations. A summary of changes in our AROs is as follows (in millions):

Beginning of period, November 7, 2011

$
71Accretion expense


1Divestiture of assets


1Revision of previous estimate (1)


(23
)End of period, December 31, 2011

$
50


(1)During
2011, we revised our ARO obligation downward by $20 million based on revised cost estimates related to remediation of asbestos. In addition,
we revised our ARO obligation downward by $3 million based on revised estimates of the cost to dismantle the South Bay facility.


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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

We
may have additional potential retirement obligations for dismantlement of power generation facilities. With the exception of the South Bay facility, which is currently being
dismantled, our current
intent is to maintain these facilities in a manner such that they will be operated indefinitely. As a result, we cannot estimate any potential retirement obligations associated with these assets.
Liabilities will be recorded at the time we are able to estimate these AROs.

Contingencies, Commitments, Guarantees and Indemnifications.We are involved in numerous lawsuits, claims, proceedings and
tax-related
audits in the normal course of our operations. We record a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably
estimated. We review our loss contingencies on an ongoing basis to ensure that we have appropriate reserves recorded on our consolidated balance sheet. These reserves are based on estimates and
judgments made by management with respect to the likely outcome of these matters, including any applicable insurance coverage for litigation matters, and are adjusted as circumstances warrant. Our
estimates and judgment could change based on new information, changes in laws or regulations, changes in management's plans or intentions, the outcome of legal proceedings, settlements or other
factors. If different estimates and judgments were applied with respect to these matters, it is likely that reserves would be recorded for different amounts. Actual results could vary materially from
these estimates and judgments.

Liabilities
for environmental contingencies are recorded when an environmental assessment indicates that remedial efforts are probable and the costs can be reasonably estimated.
Measurement of liabilities is based, in part, on relevant past experience, currently enacted laws and regulations, existing technology, site-specific costs and cost-sharing
arrangements. Recognition of any joint and several liability is based upon our best estimate of our final pro-rata share of such liability.

These
assumptions involve the judgments and estimates of management, and any changes in assumptions could lead to increases or decreases in our ultimate liability, with any such changes
recognized immediately in earnings.

We
disclose and account for various guarantees and indemnifications entered into during the course of business. When a guarantee or indemnification is entered into, an estimated fair
value of the underlying guarantee or indemnification is recorded. Some guarantees and indemnifications could have significant financial impact under certain circumstances; however, management also
considers the probability of such circumstances occurring when estimating the fair value. Actual results may materially differ from the estimated fair value of such guarantees and indemnifications.

Revenue Recognition.We earn revenue from our facilities in three primary ways: (i) the sale of both fuel and energy
through both physical and
financial transactions to optimize the financial performance of our generating facilities; (ii) sale of capacity; and (iii) sale of ancillary services, which are the products of a
generation facility that support the transmission grid operation, allow generation to follow real-time changes in load, and provide emergency reserves for major changes to the
balance of generation and load. We recognize revenue from these transactions when the product or service is

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

delivered
to a customer, unless they meet the definition of a derivative. Please read "Derivative InstrumentsGeneration" for further discussion of the accounting for these
types of transactions.

Derivative InstrumentsGeneration.We enter into commodity contracts that meet the definition of a derivative. These
contracts are often
entered into to mitigate or eliminate market and financial risks associated with our generation business. These contracts include forward contracts, which commit us to sell commodities in the future;
futures contracts, which are generally exchange-traded standard commitments to purchase or sell a commodity; option contracts, which convey the right to buy or sell a commodity; and swap agreements,
which require payments to or from counterparties based upon the differential between two prices for a predetermined quantity. There are three different ways to account for these types of contracts:
(i) as an accrual contract, if the criteria for the "normal purchase normal sale" exception are met and documented; (ii) as a cash flow or fair value hedge, if the specified criteria are
met and documented; or (iii) as a mark-to-market contract with changes in fair value recognized in current period earnings. All derivative commodity contracts that do
not qualify for the normal purchase normal sale exception are recorded at fair value in risk management assets and liabilities on the consolidated balance sheet. If the derivative commodity contract
has been designated as a cash flow hedge, the changes in fair value are recognized in earnings concurrent with the hedged item. Changes in the fair value of derivative commodity contracts that are not
designated as cash flow hedges are recorded currently in earnings.

We
execute a significant volume of transactions through futures clearing managers. Our daily cash payments (receipts) to (from) our futures clearing managers consist of three parts:
(i) fair value of open positions (exclusive of options) ("Daily Cash Settlements"); (ii) initial margin requirements of open positions ("Initial Margin"); and (iii) fair value
related to options ("Options", and collectively with Daily Cash Settlements and Initial Margin, "Collateral"). We do not offset fair value amounts recognized for derivative instruments executed with
the same counterparty under a master netting agreement and we do not elect to offset the fair value amounts recognized for the Daily Cash Settlements paid or received against the fair value amounts
recognized for derivative instruments executed with the same counterparty under a master netting agreement. As a result, our consolidated balance sheet present derivative assets and liabilities, as
well as related Collateral, as applicable, on a gross basis.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

Derivative InstrumentsFinancing Activities.We are exposed to changes in interest rates through our variable and fixed
rate debt. In
order to manage our interest rate risk, we enter into interest rate swap agreements.

Cash
inflows and cash outflows associated with the settlement of risk management activities are recognized in net cash provided by (used in) operating activities on the consolidated
statement of cash flows.

Fair Value Measurements.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction
between market participants at the measurement date (exit price). However, we utilize a mid-market pricing convention (the mid-point price between bid and ask prices) as a
practical expedient for valuing the majority of our financial assets and liabilities measured and reported at fair value. Where appropriate, our estimate of fair value reflects the impact of our
credit risk, our counterparties' credit risk and bid-ask spreads. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including
assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the
market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs
and minimize the use of unobservable inputs. We classify fair value balances based on the observability of those inputs. The inputs used to measure fair value have been placed in a hierarchy based on
priority.

The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to
unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:



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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)



The
determination of the fair values incorporates various factors. These factors include not only the credit standing of the counterparties involved and the impact of credit enhancements
(such as cash deposits, letters of credit and priority interests), but also the impact of our nonperformance risk on our liabilities. Valuation adjustments are generally based on capital market
implied ratings evidence when
assessing the credit standing of our counterparties and when applicable, adjusted based on management's estimates of assumptions market participants would use in determining fair value.

Assets
and liabilities from risk management activities may include exchange-traded derivative contracts and OTC derivative contracts. Some exchange-traded derivatives are valued using
broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these exchange-traded derivatives are classified within Level 2. OTC derivative trading
instruments include swaps, forwards, options and complex structures that are valued at fair value. In certain instances, these instruments may utilize models to measure fair value. Generally, we use a
similar model to value similar instruments. Valuation models utilize various inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability, and market-corroborated inputs. Where observable inputs are available for
substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with a lower availability of pricing
information. In addition, complex or structured transactions, such as heat-rate call options, can introduce the need for internally-developed model inputs that might not be observable in
or corroborated by the market. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3.

In
determining fair value for nonfinancial assets and liabilities measured at fair value on a nonrecurring basis, we use discounted cash-flow projections, recent comparable
market transactions, if available, or quoted prices. We consider assumptions that third parties would make in estimating fair value, including the highest and best use of the asset. These fair values
are categorized in Level 3.

Income Taxes.Our parent, Dynegy, files a consolidated U.S. federal income tax return and, for financial reporting purposes,
accounts for
income taxes using the asset and liability method, which requires that we use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all
significant temporary differences.

As
part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process
involves estimating our actual current tax payable and related tax expense together with assessing temporary

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

differences
resulting from differing tax and accounting treatment of certain items, such as depreciation, for tax and accounting purposes. These differences can result in deferred tax assets and
liabilities, which are included within our consolidated balance sheet.

We
must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that it is more likely than not (a likelihood
of more than 50 percent) that some portion or all of the deferred tax assets will not be realized, we must establish a valuation allowance. We consider all available evidence, both positive and
negative, to determine whether, based on the weight of the evidence, a valuation allowance is needed. Evidence used includes information about our current financial position and our results of
operations for the current period, as well as all currently available information about future periods, anticipated future performance, the reversal of deferred tax liabilities and tax planning
strategies.

We
do not believe we will produce sufficient future taxable income, nor are there tax planning strategies available to realize the tax benefits from, net deferred tax assets not
otherwise realized by reversing temporary differences. Therefore, a valuation allowance was recorded as of December 31, 2011. Any change in the valuation allowance would impact our income tax
benefit (expense) and net income (loss) in the period in which the change occurs.

We
are included in the consolidated federal and state income tax returns filed by Dynegy. Pursuant to provisions of the Internal Revenue Code Section 1502, pertaining to tax
allocation arrangements, we record a receivable from Dynegy in an amount equal to the tax benefits realized in Dynegy's consolidated federal income tax return resulting from the utilization of our net
operating losses and/or tax credits, or record a payable to Dynegy in an amount equal to the federal income tax computed on our separate company taxable income less the tax benefits associated with
net operating losses and/or tax credits generated by us which are utilized in Dynegy's consolidated federal income tax return.

We
recognize accrued interest expense and penalties related to unrecognized tax benefits as income tax expense.

Please
read Note 16Income Taxes for further discussion of our accounting for income taxes, uncertain tax positions and changes in our valuation allowance and
Note 15Related Party Transactions for discussion of our Tax Sharing Agreement.



Fair Value Measurement Disclosures.In May 2011, the FASB issued Accounting Standards Update
("ASU") No. 2011-04Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs ("ASU No. 2011-04"). This authoritative guidance changes the wording used to describe the requirements in GAAP for measuring fair value and for disclosing information about
fair value measurements. ASU No. 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The implementation of this guidance will not have a
significant impact on our financial condition, results of operations or cash flows.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 2Summary of Significant Accounting Policies (Continued)

Presentation of Comprehensive Income.In June 2011, the FASB issued ASU 2011-05Comprehensive Income (Topic 220):
Presentation of Comprehensive Income ("ASU No. 2011-05"). The FASB's objective in issuing this guidance is to improve the comparability, consistency, and transparency of financial
reporting and to increase the prominence of items reported in other comprehensive income. ASU No. 2011-05 eliminates the option of presenting components of other comprehensive
income as part of the statement of changes in stockholders' equity. The standard requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of
comprehensive income or in two separate but consecutive statements. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15,
2011. We do not expect the implementation of this guidance to have a significant impact on our financial condition, results of operations or cash flows.

Note 3Chapter 11 Cases

On November 7, 2011, the Debtor Entities commenced the Chapter 11 Cases. Other than DH and its
four subsidiaries that are also Debtor Entities, none of our direct or indirect subsidiaries sought relief under Chapter 11 of the Bankruptcy Code, and none of those entities are debtors under
Chapter 11 of the Bankruptcy Code. The Chapter 11 Cases have been assigned to the Honorable Cecelia G. Morris, and are being jointly administered for procedural purposes only
under the caption "In re: Dynegy Holdings, LLC et. al" Case No. 11-38111. The Debtor Entities have remained in possession of
their property and continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

As
noted above, DH and the Debtor Entities are the only entities that have filed the Chapter 11 Cases. Dynegy Gas Holdco, LLC and its indirect, wholly-owned subsidiaries,
including DPC and all of its subsidiaries, are not included in the Chapter 11 Cases. The normal day-to-day operations of the natural gas-fired power
generation facilities held by DPC have continued without interruption. The commencement of the Chapter 11 Cases did not constitute a default under the DPC Credit Agreement (as defined below).

In
connection with the Chapter 11 Cases, on November 7, 2011, the Debtor Entities filed a motion with the Bankruptcy Court for authorization to reject the leases of the
Roseton and Danskammer power generation facilities (the "DNE Leases"). On December 20, 2011, the Bankruptcy Court entered a stipulated order approving the rejection of such leases, as amended
by a stipulated order entered by the Bankruptcy Court on December 28, 2011. As described more fully in Note 13DNE Lease Termination Claims, the rejection damages claim of
Resource Capital Management Corporation has been stipulated and allowed by the Bankruptcy Court in the amount of $110 million; the Lease Indenture Trustee's rejection damages claim remains the
subject of ongoing litigation. The Debtor Entities have remained in physical possession of and have continued to operate the leased facilities to the extent necessary to comply with applicable federal
and state regulatory requirements until operational control of the facilities is permitted to be transitioned.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 3Chapter 11 Cases (Continued)

Lease Indenture Trustee Contested Matters and Adversary Proceedings.On November 11, 2011, U.S. Bank National Association,
in its capacity as
Successor Lease Indenture Trustee (the "Lease Indenture Trustee") under the Indentures of Trust, Mortgage, Assignment of Leases and Rents and Security Agreement related to each facility commenced an
adversary proceeding against Dynegy Danskammer, L.L.C., Dynegy Roseton, L.L.C and DH (Adversary Proceeding No. 11-09083) (the "Adversary Proceeding") seeking, among other things; a
declaration that: (i) the Roseton and Danskammer leases are not leases of real property; (ii) the leases are financings, not leases; and (iii) notwithstanding the lease rejection
claims, claims arising from DH's guaranty of certain lease obligations are not subject to a cap pursuant to section 502(b)(6) of the Bankruptcy Code. On January 6, 2012 the Lease
Indenture Trustee filed an Amended Complaint in which it added an additional claim
for relief, seeking, among other things, a determination of the allowed amount of the Lease Indenture Trustee's claims against Dynegy Danskammer, L.L.C., Dynegy Roseton, L.L.C., and DH.

On
January 25, 2012, Dynegy Danskammer, L.L.C., Dynegy Roseton, L.L.C., and DH filed their Answer and Counterclaims to the Amended Complaint of the Lease Indenture Trustee
asserting, among other things, that the leases are true leases and that such documents are leases of real property subject to section 502(b)(6) of the Bankruptcy Code. Pursuant to a scheduling
order entered on January 30, 2012, the Bankruptcy Court has set a deadline of May 8, 2012 for filing summary judgment motions and June 11, 2012 for the commencement of a trial to
the extent one is necessary.

On
February 21, 2012, the Lease Indenture Trustee filed an answer to the counterclaims filed by Dynegy Danskammer, Dynegy Roseton and DH, and on February 27, 2012, the
Lease Indenture Trustee filed a motion for judgment on the pleadings with respect to one issue: whether or not the Lease Indenture Trustee's claims are subject to the damages cap set forth in
section 502(b)(6) of the Bankruptcy Code based on the Lease Indenture Trustee's contention that the Facility Leases concern personal, rather than real, property. The current date to respond to
the Lease Indenture Trustee's motion is March 8, 2012, and the Lease Indenture Trustee has noticed a hearing on the motion for March 21, 2012.

On
February 29, 2012, Dynegy Danskammer, Dynegy Roseton and DH filed their own motion for judgment on the pleadings, seeking rulings from the Court that: (i) the Lease
Indenture Trustee's First Claim for Relief should be dismissed because the Facilities are real property under New York law; (ii) the Lease Indenture Trustee's Second Claim for Relief should be
dismissed because the Lease Indenture Trustee cannot invoke the equitable remedy of recharacterization on the grounds that its effort to recharacterize the Facility Leases as financings is barred by
the applicable Lease Indentures, and because recharacterization would be inequitable and contrary to the policies embodied in section 502(b)(6) of the Bankruptcy Code; (iii) the Lease
Indenture Trustee's Third and Fourth Claims for Relief should be dismissed because section 502(b)(6) of the Bankruptcy Code applies to claims against guarantors of leases such as DH under the
Lease Guarantees, and (iv) the Lease Indenture Trustee's Fifth Claim for Relief should be dismissed to the extent it seeks to recover more than the $550.4 million (plus any allowable
pre-petition interest) amount due to the Pass-Through Certificate Holders for whom the Lease Indenture Trustee acts under the Lease Indentures. The current date to

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 3Chapter 11 Cases (Continued)

respond
to the motion for judgment on the pleadings filed by Dynegy Danskammer, Dynegy Roeseton and DH is March 8, 2012, and a hearing has been noticed on the motion for March 21, 2012.

On
November 11, 2011, the Lease Indenture Trustee also filed a motion with the Bankruptcy Court seeking the appointment of the examiner. On December 29, 2011, the
Bankruptcy Court entered an
order directing the appointment of an examiner, which order provides, among other things, that the examiner will investigate (i) the Debtor Entities' conduct in connection with the prepetition
2011 restructuring and reorganization of the Debtor Entities and their non-Debtor affiliates, (ii) any possible fraudulent conveyances, and (iii) whether DH is capable of
confirming a Chapter 11 plan.

Pursuant
to the order approving the appointment of the examiner, the examiner's investigation is to run for a 60-day period beginning on the date of the appointment (subject
to possible extension), at the end of which the examiner must file with the Court and provide to certain parties in interest a written report of his investigation, subject to certain restrictions. An
examiner was appointed on January 12, 2012. We anticipate that the examiner will issue a written report describing his findings on or about March 9, 2012.

Also
in connection with the Chapter 11 Cases, DH, as lender, and the other Debtor Entities, as borrowers, entered into a $15 million Intercompany Revolving Loan Agreement
that will be available to the borrowers for working capital and certain other administrative expenses during the Chapter 11 Cases.

Financial Obligations.The direct financial obligations of the Debtor Entities and obligations under their off-balance sheet
arrangements, and the approximate principal amount of debt currently outstanding thereunder, include the following:



F-21

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 3Chapter 11 Cases (Continued)



As
a result of the filing of the Chapter 11 Cases, we classified the Senior Notes and Subordinated Notes, and the estimated allowed claim related to the DNE Leases as Liabilities
subject to compromise on our December 31, 2011 consolidated balance sheet. Please read Note 13Liabilities Subject to Compromise for further discussion.

Restructuring Support Agreements.Prior to the commencement of the Chapter 11 Cases, DH and Dynegy reached an agreement
with certain holders
of more than $1.4 billion of the Senior Notes and Subordinated Notes regarding a potential consensual restructuring (the "Restructuring") of over $4.0 billion of obligations owed by DH.
The principal terms of the Restructuring were evidenced by a restructuring support agreement and related term sheet, dated November 7, 2011, which was amended and restated on
December 26, 2011 (as amended and restated, the "Noteholder Restructuring Support Agreement"), and entered into by and among Dynegy, DH and the holders of approximately $1.8 billion of
the Senior Notes and Subordinated Notes (the "Consenting Noteholders").

Pursuant
to the Noteholder Restructuring Support Agreement, the Consenting Noteholders agreed, among other things, subject to the terms and conditions contained in the Noteholder
Restructuring Support Agreement, to: (i) vote their claims under the Senior Notes and Subordinated Notes in favor of the Restructuring and not withdraw or revoke such vote, except as permitted
under the Noteholder
Restructuring Support Agreement; (ii) not object to the Restructuring; (iii) not initiate legal proceedings inconsistent with or that would prevent, frustrate, or delay the
Restructuring; (iv) not solicit, support, formulate, entertain, encourage or engage in discussions or negotiations, or enter into any agreements relating to, any alternative restructuring; and
(v) not solicit, encourage, or direct any person or entity, including the indenture trustee under the indenture for the Senior Notes or the indenture for the Subordinated Notes, to undertake
any such action. Additionally, the Consenting Noteholders agreed not to transfer or assign their claims, except to parties who also agree to be bound by the Noteholder Restructuring Support Agreement,
subject to certain exceptions. Subject to fiduciary duties, Dynegy and DH agree to use their reasonable best efforts to (i) support and complete the Restructuring, (ii) take all
necessary and appropriate actions in furtherance of the Restructuring and the transactions related thereto, (iii) complete the Restructuring and all transactions related thereto within the
time-frames outlined in the Noteholder Restructuring Support Agreement, (iv) obtain all required governmental, regulatory and/or third-party approvals for the Restructuring and
(v) take no actions inconsistent with the Noteholder Restructuring Support Agreement or the confirmation and consummation of the Plan (as defined below).

The
Noteholder Restructuring Support Agreement provides that it may be terminated by DH, Dynegy, or a majority of the Consenting Noteholders if (among other things): (i) the
Bankruptcy Court has not entered an order approving the disclosure statement related to the Plan (as defined below) by

F-22

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 3Chapter 11 Cases (Continued)

March 15,
2012; (ii) the Bankruptcy Court has not entered an order confirming the Plan by June 15, 2012; or (iii) the Plan has not become effective by August 1,
2012.

In
addition, on December 13, 2011, we entered into a binding term sheet with Resources Capital Management Corporation and certain of its affiliates and subsidiaries ("PSEG"), to
settle and resolve all issues in lieu of further litigation, regarding, among other things, the Roseton and Danskammer leases and all of the parties' rights and claims arising under the related lease
documents, including certain tax indemnity agreements, pursuant to which settlement, PSEG agreed to support the confirmation of the Debtor Entities' plan of reorganization, bringing the aggregate
amount of claims agreeing to support the plan up to approximately $1.9 billion.

Plan of Reorganization.On December 1, 2011, Dynegy and DH, as co-plan proponents filed a proposed Chapter 11 plan of
reorganization and a related disclosure statement for DH with the Bankruptcy Court. On January 19, 2012, they filed a proposed amended plan and related disclosure statement and recently filed a
second amended plan (the "Plan") and related disclosure statement (the "Disclosure Statement") with the Bankruptcy Court. The Amended Plan addresses claims against and interests in DH only and does
not address claims against and interests in the other Debtor Entities.

The
proposed Plan sets forth the material terms of the Restructuring pursuant to which unsecured claims of DH, including its outstanding Senior Notes, will be cancelled and exchanged for
a combination of (i) $1.015 billion aggregate principal amount of new secured notes ("New Secured Notes") of Dynegy (or a cash payment in lieu thereof), (ii) $2.1 billion
of convertible preferred stock of Dynegy (the "Preferred Stock") and (iii) $400 million cash (plus an amount equal to all interest that would have been accrued on the New Secured Notes
from the filing date of the Chapter 11 Cases). In addition, pursuant to the proposed Plan, it is a condition to the effective date of such plan (the "Effective Date") that the rejection damages
arising from the rejection of the leases of the Roseton and Danskammer power generation facilities are determined in an amount not to exceed $300 million (or $190 million net of the
claim of PSEG, which has already been allowed by the Bankruptcy Court in the amount of $110 million), subject only to a potential waiver.

The
New Secured Notes will pay cash interest at an 11 percent annual rate and have a seven year maturity. The New Secured Notes will have customary negative covenants restricting
asset transfers, mergers, dividends, incurrence of debt and liens, restricted payments, sale and leaseback transactions, dividend and other payment restrictions and change of control (in each case,
with certain agreed upon exceptions). The New Secured Notes will be secured by a first priority security interest in (subject to certain exceptions and permitted liens): (i) the assets of
certain of Dynegy's and our direct and indirect wholly-owned subsidiaries (including a first priority security interest in and lien on a $55 million debt service account) and (ii) the
equity interests in certain of Dynegy's and our direct and indirect subsidiaries.

The
aggregate principal amount of New Secured Notes and the cash component of the Restructuring payments are subject to certain adjustments as more fully set forth in the Plan. For
example, the principal amount of New Secured Notes to be issued will be reduced (and the cash

F-23

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 3Chapter 11 Cases (Continued)

component
increased) by specified amounts of excess cash at DH and its subsidiaries (other than the bankruptcy-remote entities that own DH's natural gas-fired power generation businesses)
and may also be increased or decreased based on the amount of the aggregate claims arising from the rejection of the Roseton and Danskammer leases. Additionally, Dynegy may, in lieu of issuing any New
Secured Notes, provide for a cash payment equal to the aggregate principal amount of New Secured Notes; provided that such cash payment is funded by debt on terms that, taken as a whole (and subject
to certain exceptions), are no less favorable to Dynegy than the terms of the New Secured Notes.

The
Preferred Stock will be Redeemable Convertible Preferred Shares, par value $0.01 per share, issued by Dynegy and will accrue dividends, commencing on November 7, 2011, at an
annual rate of 4 percent through December 31, 2013, 8 percent from January 1, 2014 through December 31, 2014, and 12 percent thereafter, compounding quarterly
as set forth in the Designation of the Preferred Stock attached to the Plan (the "Stock Designation"). Dividends will not be paid in cash, but will accrue. The
Preferred Stock will not be convertible at the option of the holder; but will automatically convert on December 31, 2015 or upon the occurrence of a Dynegy bankruptcy event. Based upon the
capital structure of Dynegy anticipated to be in effect as of the Plan Effective Date, the Preferred Stock would be convertible into 97 percent of Dynegy's fully-diluted common stock (other
than equity issued as compensation) on the terms set forth in the Stock Designation. The Preferred Stock may be redeemed by Dynegy in whole or in part, subject to certain limitations, as set forth in
the Stock Designation, at an aggregate price (assuming redemption of all Preferred Stock outstanding as of the Effective Date) equal to: (i) $1.95 billion if redeemed prior to
May 8, 2013; (ii) $2.0 billion if redeemed on or after May 8, 2013 through December 31, 2013; and (iii) $2.1 billion if redeemed on or after
January 1, 2014 through the mandatory conversion date, in each case, plus accrued and unpaid dividends; provided, that if Dynegy redeems less than all of the shares of Preferred Stock, the
amounts set forth in clauses (i) and (ii) will be replaced with $2.1 billion. Dynegy may only redeem less than all of the shares of Preferred Stock with the proceeds of a firm
commitment, underwritten issuance of certain permitted stock that is entered into prior to December 31, 2014. The approval of holders of Preferred Stock will be required for certain actions by
Dynegy including: making certain changes to the fundamental rights of the Preferred Stock; making certain changes to Dynegy's certificate of incorporation or bylaws that are adverse to the Preferred
Stock; incurring certain indebtedness; disposing of certain assets; making certain investments; and engaging in certain merger or acquisition transactions. Dynegy and its Subsidiaries are restricted
from entering into certain affiliate transactions subject to obtaining certain approval, and, for certain affiliate transactions, obtaining a fairness opinion. Dynegy may, without the consent of the
holders of shares of Preferred Stock, issue and sell shares of certain permitted stock, subject to certain restrictions set forth in the Stock Designation and to the right of first offer of the
holders of shares of Preferred Stock.

Pursuant
to the proposed Plan, the holders of the Subordinated Notes would be entitled to participate in the Restructuring as unsecured note holders, but their recovery would be subject
to enforcement of their contractual subordination to the Senior Notes. Alternatively, the subordinated note holders will be offered the opportunity to participate, without subordination, in the
restructuring as unsecured note holders at $0.35 for every dollar of claims.

F-24

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 4Condensed Combined Financial Statements of the Debtor Entities (Restated)

Condensed combined financial statements of the Debtor Entities are set forth below (in millions).

Condensed Combined Balance Sheet  As of December 31, 2011

Cash

$
33Restricted cash and investments (including $27 million current)


27Accounts receivable


8Inventory


34Investment in consolidated subsidiaries


5,568Accrued interest from affiliate


8Undertaking receivable from affiliate


1,250Deferred income taxes


44Other


14Total assets

$
6,986Current liabilities and accrued liabilities

$
10Deferred income taxes


50Liabilities subject to compromise


4,012Intercompany payable


1,587Long-term debt to affiliates


1,262Other


33Total liabilities

$
6,954Total member's equity

$
32Total liabilities and member's equity

$
6,986


See
Note 13Liabilities Subject to Compromise for additional discussion of liabilities subject to compromise.

F-25

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 4Condensed Combined Financial Statements of the Debtor Entities (Restated) (Continued)

Condensed Combined Statement of Operations  For the Period from November 8, 2011 to December 31, 2011

Revenues

$
4Cost of sales


4Operating expenses


14Operating loss


(14
)Bankruptcy reorganization charges


(666
)Equity losses


(82
)Interest expense, affiliate


(6
)Other income and expense, net


17Income tax benefit


188Net loss

$
(563
)


Condensed Combined Statement of Cash Flows  For the Period from November 8, 2011 to December 31, 2011

Net cash provided by (used in):Operating activities

$
22Investing activities


(1
)Financing activities


Net increase in cash and cash equivalents


21Cash and cash equivalents, beginning of period


12Cash and cash equivalents, end of period

$
33


Basis of Presentation.The Condensed Combined Financial Statements only include the financial statements of the Debtor Entities.
Transactions and
balances of receivables and payables among the Debtor Entities are eliminated in consolidation. However, the Condensed Combined Balance Sheet includes receivables from related parties and payables to
related parties that are not Debtor Entities. Actual settlement of these related party receivables and payables is, by historical practice, made on a net basis.

Interest Expense.The Debtor Entities have discontinued recording interest on unsecured or undersecured LSTC. Contractual
interest on LSTC not
reflected in the Condensed Combined Financial Statements was approximately $44 million; representing interest expense from the bankruptcy filing on November 8, 2011 through December 31,
2011.

Bankruptcy Reorganization Charges.Bankruptcy reorganization charges represent the direct and incremental costs of bankruptcy,
such as professional
fees, pre-petition liability claim
adjustments and losses related to terminated contracts that are probable and can be estimated. Bankrupcty

F-26

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 4Condensed Combined Financial Statements of the Debtor Entities (Restated) (Continued)

reorganization
charges, as shown in the Condensed Combined Statement of Operations above, consist of expense or income incurred or earned as a direct and incremental result of the bankruptcy filings.
The table below lists the significant items within this category for the period from November 7, 2011 through December 31, 2011 (in millions).

Provision for allowable claims

$
300Loss on rejection of DNE leases


311Write-off of unamortized deferred financing costs and debt discounts


52Professional fees


3Total Bankruptcy reorganization charges

$
666


Provision
for allowable claims primarily relates to our best estimate of the probable allowed claim associated with the DNE leases. For further discussion, please see
Note 13Liabilities Subject to CompromiseDNE Lease Termination Claim.

Loss
on rejection of DNE lease primarily relates to deferred rent that has accumulated over time as the historical lease payments exceeded the annual rent expense. Upon rejection of the
lease, the amount of deferred rent was written off.

Write-off
of unamortized deferred financing costs and debt discounts relate to our unsecured pre-petition debt, which has been reclassified to LSTC on the
consolidated balance sheet following the Chapter 11 Filing on November 7, 2011. We wrote-off these amounts in order to reflect our unsecured pre-petition debt at
the expected amount of the probable allowed claim.

Professional
fees relate primarily to the fees of attorneys and consultants working directly on the bankruptcy filings and our plan of reorganization.

Note 5Risk Management Activities, Derivatives and Financial Instruments

The nature of our business necessarily involves market and financial risks. Specifically, we are exposed to commodity price variability related to our power generation business. Our
commercial team manages these commodity price risks with financially settled and other types of contracts consistent with our commodity risk management policy. Our commercial team also uses financial
instruments in an attempt to capture the benefit of fluctuations in market prices in the geographic regions where our assets operate. Our treasury team manages our financial risks and exposures
associated with interest expense variability.

Our
commodity risk management strategy gives us the flexibility to sell energy and capacity through a combination of spot market sales and near-term contractual arrangements
(generally over a rolling 1 to 3 year time frame). Our commodity risk management goal is to protect cash flow in the near-term while keeping the ability to capture value
longer-term. Increasing collateral requirements and our liquidity position could impact our ability to effectively employ our risk management strategy.

F-27

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 5Risk Management Activities, Derivatives and Financial Instruments (Continued)

Many
of our contractual arrangements are derivative instruments and must be accounted for at fair value. We also manage commodity price risk by entering into capacity forward sales
arrangements, tolling arrangements, RMR contracts, fixed price coal purchases and other arrangements that do not receive fair value accounting treatment because these arrangements do not meet the
definition of a derivative or are designated as "normal purchase normal sales". As a result, the gains and losses with respect to these arrangements are not reflected in the consolidated statement of
operations until the settlement dates.



The following disclosures and tables present information concerning the impact of derivative instruments on our consolidated balance
sheet and statement of operations. In the table below, commodity contracts primarily consist of derivative contracts related to our power generation business that we have not designated as accounting
hedges, which are entered into for purposes of economically hedging future fuel requirements and sales commitments and securing commodity prices. Interest rate contracts primarily consist of
derivative contracts related to managing our interest rate risk. As of December 31, 2011, our commodity derivatives were comprised of both long and short positions; a long position is a
contract to purchase a commodity, while a short position is a contract to sell a commodity. As of December 31, 2011, we had net long/(short) commodity derivative contracts outstanding and
notional interest rate swaps outstanding in the following quantities:

Contract Type

Hedge Designation

Quantity

Unit of Measure

Net Fair Value(in millions)



(in millions)Commodity derivative contracts:Electric energy(1)

Not designated


(18
)
MW

$
65Electric energy, affiliates

Not designated


2

MW

$
(5
)Natural gas(1)

Not designated


306

MMBtu

$
(220
)Other(2)

Not designated


15

Misc.

$
(16
)Interest rate contracts:Interest rate swaps

Not designated


788

Dollars

$
(8
)Interest rate caps

Not designated


900

Dollars

$
2


(1)Mainly
comprised of swaps, options and physical forwards.(2)Comprised
of coal, crude oil, fuel oil options, electricity spread options, natural gas spread options, swaps and physical forwards.


F-28

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 5Risk Management Activities, Derivatives and Financial Instruments (Continued)

Derivatives on the Balance Sheet.The following table presents the fair value and balance sheet classification of derivatives in
the consolidated
balance sheet as of December 31, 2011, segregated between designated, qualifying hedging instruments and those that are not, and by type of contract segregated by assets and liabilities.

Contract Type

Balance Sheet Location

December 31, 2011Derivatives designated as hedging instruments:Derivative Assets:Interest rate contracts

Assets from risk management activities

$
Derivative Liabilities:Interest rate contracts

Liabilities from risk management activities


Total derivatives designated as hedging instruments, net




Derivatives not designated as hedging instruments:Derivative Assets:Commodity contracts

Assets from risk management activities


2,639Commodity contracts, affiliates

Assets from risk management activities, affiliates


2Interest rate contracts

Assets from risk management activities


2Derivative Liabilities:Commodity contracts

Liabilities from risk management activities


(2,810
)Commodity contracts, affiliates

Liabilities from risk management activities, affiliates


(7
)Interest rate contracts

Liabilities from risk management activities


(8
)Total derivatives not designated as hedging instruments, net




(182
)Total derivatives, net



$
(182
)




The following discussion and tables present the disclosure of the location and amount of gains and losses on derivative instruments in
our consolidated statement of operations for the period from November 8, 2011 through December 31, 2011, segregated between designated, qualifying hedging instruments and those that are
not, by type of contract. We had no derivatives that were designated in qualifying hedging relationships during this period.

Financial Instruments Not Designated as Hedges.We elect not to designate derivatives related to our power generation business
and certain interest
rate instruments as cash flow or fair value hedges.

F-29

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 5Risk Management Activities, Derivatives and Financial Instruments (Continued)

Thus,
we account for changes in the fair value of these derivatives within the consolidated statement of operations (herein referred to as "mark-to-market accounting
treatment"). As a result, these mark-to-market gains and losses are not reflected in the consolidated statement of operations in the same period as the underlying activity for
which the derivative instruments serve as economic hedges.

For
the period from November 8, 2011 through December 31, 2011, our revenues included approximately $46 million of mark-to-market losses
related to this activity.

The
impact of derivative financial instruments that have not been designated as hedges on our consolidated statement of operations for the period from November 8, 2011 through
December 31, 2011 is presented below. Note that this presentation does not reflect the expected gains or losses arising from the underlying physical transactions or interest payments associated
with these financial instruments. Therefore, this presentation is not indicative of the economic results we expect to realize when the underlying physical transactions settle and interest payments are
made.

Derivatives Not Designated as Hedging Instruments

Location of Gain
(Loss) Recognized in
Income on
Derivatives

Amount of All Gain (Loss)
Recognized in Income on
Derivatives for the Period from
November 8, 2011 through
December 31, 2011(in millions)Commodity contracts

Revenues

$
(86
)Commodity contracts with affiliates

Revenues


19Interest rate contracts

Interest expense


(7
)


Note 6Fair Value Measurements

The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of
December 31, 2011. These financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment
of the significance of a particular input to

F-30

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 6Fair Value Measurements (Continued)

the
fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

Fair Value as of December 31, 2011Level 1

Level 2

Level 3

Total(in millions)Assets:Assets from commodity risk management activities:Electricity derivatives

$


$
211

$
26

$
237Electricity derivatives, affiliates





1


1


2Natural gas derivatives





2,387





2,387Other derivatives





15





15Total assets from commodity risk management activities

$


$
2,614

$
27

$
2,641Assets from interest rate swaps








2


2Total

$


$
2,614

$
29

$
2,643Liabilities:Liabilities from commodity risk management activities:Electricity derivatives

$


$
(169
)
$
(2
)
$
(171
)Electricity derivatives, affiliates





(2
)

(5
)

(7
)Natural gas derivatives





(2,607
)




(2,607
)Heat rate derivatives








(17
)

(17
)Other derivatives





(15
)




(15
)Total liabilities from commodity risk management activities

$


$
(2,793
)
$
(24
)
$
(2,817
)Liabilities from interest rate swaps








(8
)

(8
)Total

$


$
(2,793
)
$
(32
)
$
(2,825
)


We
primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. For example, assets and liabilities from risk management activities may include exchange-traded
derivative contracts and OTC derivative contracts. Some exchange-traded derivatives are valued using broker or dealer quotations, or market transactions in either the listed or OTC markets. In such
cases, these exchange-traded derivatives are classified within Level 2. OTC derivative trading instruments include swaps, forwards, options and complex structures that are valued at fair value.
In certain instances, these instruments may utilize models to measure fair value. Generally, we use a similar model to value similar instruments. Valuation models utilize various inputs that include
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or
liability, and market-corroborated inputs. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC
derivatives trade in less active markets with a lower availability of pricing information. In addition, complex or structured transactions, such as heat-rate call options, can introduce
the need for internally-developed model inputs that might not be observable in or corroborated by the market. When such inputs have a significant impact on the measurement of fair

F-31

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 6Fair Value Measurements (Continued)

value,
the instrument is categorized in Level 3. We have consistently used this valuation technique for all periods presented. Please read Note 2Summary of Significant
Accounting PoliciesFair Value Measurements for further discussion.

The
following tables set forth a reconciliation of changes in the fair value of financial instruments classified as Level 3 in the fair value hierarchy:

For the Period from November 7, 2011 through December 31, 2011Electricity Derivatives

Natural Gas Derivatives

Heat Rate Derivatives

Interest Rate Swaps

Total(in millions)Balance at November 7, 2011

$
28

$


$
(17
)
$
1

$
12Realized and unrealized gains, net of affiliates


(1
)




(3
)

(7
)

(11
)Settlements


(7
)




3





(4
)Balance at December 31, 2011

$
20

$


$
(17
)
$
(6
)
$
(3
)Unrealized gains (losses) relating to instruments (net of affiliates) still held as of December 31, 2011

$
9

$
(4
)
$
(7
)
$
(6
)
$
(8
)


Gains and losses (realized and unrealized) for Level 3 recurring items are included in Revenues on the consolidated statement of
operations. We believe an analysis of instruments classified as Level 3 should
be undertaken with the understanding that these items generally serve as economic hedges of our power generation portfolio.

Transfers
in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the inputs to the model became
unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period. Transfers in and/or out of
Level 3 are valued at the end of the period.

We
had approximately $23 million of Collateral as of December 31, 2011 included in Broker margin account on our consolidated balance sheet. Substantially all of our
derivative positions with our derivative counterparties are supported by letters of credit, cash and short-term investment collateral postings or a first priority lien on certain of our
assets. We do not consider letters of credit, unless they are fully cash collateralized, in our valuation of our derivative liabilities, as they are third-party credit enhancements.

Fair Value of Financial Instruments.We have determined the estimated fair-value amounts using available market information and
selected
valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions or valuation methodologies could
have a material effect on the estimated fair value amounts.

The
carrying values of financial assets and liabilities (cash, accounts receivable, short-term investments and accounts payable), not presented in the table below,
approximate fair values due to the short-term maturities of these instruments. The fair value of debt as reflected in the table has been calculated based on the average of certain
available broker quotes for the periods ending December 31,

F-32

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 6Fair Value Measurements (Continued)

2011.
The fair value of the undertaking receivable, affiliate was determined based on estimated cash flows that Dynegy expects to generate from its coal segment based on a weighting of unlevered and
levered discounted cash flows methodologies. These methodologies estimate the value of an asset or business by calculating the present value of expected future cash flows using a market participant's
expected weighted average cost of capital (discount rate). The projections of Dynegy's coal segment's estimated future operating results were based on discrete financial forecasts developed by
Dynegy's management for planning purposes. In the levered discounted cash flows methodology, the future operating results were also based on discrete financial forecasts developed by Dynegy's
management for planning purposes, but with the inclusion of the related term loan interest and principal payments. This
methodology estimates the fair value of the future cash flows from Dynegy's coal segment by calculating the present value of expected future cash flows using a discount rate that reflects a market
participant's expected equity discount rate. Please read Note 15Related Party TransactionsDMG Transfer and Undertaking Agreement for further discussion regarding the
undertaking receivable.

December 31, 2011Carrying Amount

Fair ValueUndertaking receivable, affiliate (1)

$
1,250

$
728Interest rate derivatives not designated as accounting hedges (2)


(6
)

(6
)Commodity-based derivative contracts not designated as accounting hedges, net of affiliates (2)


(176
)

(176
)DPC Credit Agreement due 2016 (3)


(1,076
)

(1,118
)


(1)The
fair value of $728 million for the Undertaking receivable, affiliate represents the $750 million fair value of the Undertaking prepared as
of November 7, 2011 less the $22 million payment made in December 2011. An updated estimate of fair value was not performed at December 31, 2011 because management believed that
it was not practicable given the thorough valuation prepared within two months of the balance sheet date. The fair value of the Undertaking receivable, affiliate can be impacted by variability in
commodity pricing underlying the valuation analysis and changes in strategy, among other things.(2)Included
in both current and non-current assets and liabilities on the consolidated balance sheet.(3)Includes
unamortized discounts of $21 million at December 31, 2011.


Concentration of Credit Risk.We sell our energy products and services to customers in the electric and natural gas distribution
industries,
financial institutions and to entities engaged in industrial businesses. These industry concentrations have the potential to impact our overall exposure to credit risk, either positively or
negatively, because the customer base may be similarly affected by changes in economic, industry, weather or other conditions.

At
December 31, 2011, our credit exposure as it relates to the mark-to-market portion of our risk management portfolio totaled $30 million. We seek
to reduce our credit exposure by executing agreements that permit us to offset receivables, payables and mark-to-market exposure. We attempt to

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 6Fair Value Measurements (Continued)

further
reduce credit risk with certain counterparties by obtaining third party guarantees or collateral as well as the right of termination in the event of default.

Our
Credit Department, based on guidelines approved by Dynegy's Board of Directors, establishes our counterparty credit limits. Our industry typically operates under negotiated credit
lines for physical delivery and financial contracts. Our credit risk system provides current credit exposure to counterparties on a daily basis.

We
enter into master netting agreements in an attempt to both mitigate credit exposure and reduce collateral requirements. In general, the agreements include our risk management
subsidiaries and allow the aggregation of credit exposure, margin and set-off. As a result, we decrease a potential credit loss arising from a counterparty default.

We
include cash collateral deposited with counterparties in Broker margin account and Prepayments and other current assets on our consolidated balance sheet. As of December 31,
2011, we had $44 million posted with these counterparties, which is included in Prepayments and other current assets on our consolidated balance sheet. We include cash collateral received from
counterparties in Accrued liabilities and other current liabilities on our consolidated balance sheet.

Note 7Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, net of tax, is included in our statement of changes in member's equity as follows:

December 31,
2011(in millions)Cash flow hedging activities, net

$
1Unrecognized prior service cost and actuarial loss


Accumulated other comprehensive loss, net of tax

$
1


Note 8Cash Flow Information

Following are supplemental disclosures of cash flow and non-cash investing and financing information for the period from November 8, 2011 through December 31,
2011 (in millions):

Interest paid (net of amount capitalized)

$
16Other non-cash investing and financing activity:Non-cash capital expenditures

$
(3
)Other affiliate activity with Dynegy (1)


25


(1)Represents
transactions with Dynegy in the normal course of business, primarily the reallocation of deferred taxes between legal entities in accordance with
applicable IRS regulations.


During
the period from November 8, 2011 through December 31, 2011, cash flow from operating activities included $1 million in payments to
professional advisors related to reorganization costs. There were no investing or financing cash flows related to reorganization items during the period from November 8, 2011 through
December 31, 2011.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 9Inventory

A summary of our inventories is as follows:

December 31,
2011(in millions)Materials and supplies

$
40Coal


16Fuel oil


8Emissions allowances


1$
65


There
were no lower of cost or market adjustments recorded during the period from November 8, 2011 through December 31, 2011.

Note 10Property, Plant and Equipment

A summary of our property, plant and equipment is as follows:

December 31,
2011(in millions)Generation assets:Gas

$
3,532DNE


268IT systems and other


1113,911Accumulated depreciation


(1,090
)$
2,821


Note 11Unconsolidated Investments



Equity method investments consist of investments in affiliates that we do not control, but where we have significant influence over
operations.

Black Mountain.We hold a 50 percent ownership interest in Black Mountain, an 85 MW power generation facility in Las Vegas,
Nevada. At
December 31, 2011, the value of this investment was zero.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 12Intangible Assets

A summary of changes in our intangible assets is as follows:

LS Power

Sithe

Total(in millions)November 7, 2011

$
3

$
145

$
148Amortization expense





(7
)

(7
)December 31, 2011

$
3

$
138

$
141


LS Power.Previously, in connection with the purchase of certain power generation facilities and related contracts from LS Power,
 we recorded
intangible assets related to power tolling agreements that were amortized over their respective contract terms of 6 months to 7 years. The amortization expense is being recognized in
Revenue in our consolidated statement of operations where we record the revenues received from the contract. The estimated amortization expense for each of the next five succeeding years is less than
$1 million.

Sithe.Pursuant to our acquisition of Sithe Energies in February 2005, we recorded intangible assets which related to a firm
capacity sales agreement
between Sithe Independence Power Partners and Con Edison, a subsidiary of Consolidated Edison, Inc. That contract provides Independence the right to sell 740 MW of capacity until 2014 at
fixed prices that are currently above the prevailing market price of capacity for the New York Rest of State market. This asset will be amortized on a straight-line basis over the
remaining life of the contract through October 2014. The amortization expense is being recognized in Revenue in our consolidated statement of operations where
we record the revenues received from the contract. The annual amortization of the intangible asset for the remaining life of the contract is expected to approximate $50 million,
$50 million and $38 million in 2012, 2013 and 2014, respectively. Accordingly, approximately $50 million is reflected in Prepayments and other current assets on our consolidated
balance sheet.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 13Liabilities Subject to Compromise

A summary of our LSTC as of December 31, 2011 is as follows (in millions):

DNE lease termination claim

$
300Senior Notes:8.75 percent due 2012


887.5 percent due 2015


7858.375 percent due 2016


1,0477.125 percent due 2018


1757.75 percent due 2019


1,1007.625 percent due 2026


175Subordinated Debentures payable to affiliates, 8.316 percent, due 2027


200Interest accrued on Senior Notes and Subordinated Debentures as of November 7, 2011


132Note payable, affiliate


10Total Liabilities subject to compromise

$
4,012


DNE Lease Termination Claim.In the first quarter 2001, we acquired the Roseton and Danskammer power generation facilities.
These facilities consist
of a combination of baseload, intermediate and peaking facilities aggregating approximately 1,700 MW. The facilities are approximately 50 miles north
of New York City and were acquired for approximately $903 million cash, plus inventory and certain working capital adjustments. In May 2001, two of our subsidiaries completed a
sale-leaseback transaction to provide term financing for the DNE facilities. Under the terms of the sale-leaseback transaction, our subsidiaries sold plants and equipment and
agreed to lease them back for terms expiring within 34 years, exclusive of renewal options.

As
further described in Note 3Chapter 11 Cases, in connection with the Chapter 11 Cases, on November 7, 2011, the Debtor Entities filed a motion
with the Bankruptcy Court for authorization to reject the Roseton and Danskammer leases. On December 20, 2011, the Bankruptcy Court entered a stipulated order approving the rejection of such
leases, as amended by a stipulated order entered by the Bankruptcy Court on December 28, 2011. The Debtor Entities have remained in physical possession of and have continued to operate the
leased facilities as "debtors-in-possession" to the extent necessary to comply with applicable federal and state regulatory requirements until operational control of the facilities is permitted to be
transitioned.

We
have estimated the fair value of the allowed claims at DH arising from the lease rejection to be $300 million (or $190 million net of the claim of PSEG which has already
been allowed by the Bankruptcy Court in the amount of $110 million). Our estimate of the fair value of the obligations arising from the rejection of the Roseton and Danskammer leases considered
various scenarios and projected outcomes including, among other things, our view that the Lease Indenture Trustee's allowed claim should be capped pursuant to Section 502(b)(6) of the
Bankruptcy Code which governs claims arising from the rejection of leases of nonresidential real property. As discussed above, the Lease Indenture Trustee is seeking allowance of the lease claims in
the amount of approximately $900 million,

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 13Liabilities Subject to Compromise (Continued)

however
we believe that such lease claims (exclusive of PSEG's $110 million allowed claim) are in fact significantly lower given the application of any one or more of the following factors,
among others: (i) the claims are, as stated, subject to the cap established in section 502(b)(6) of the Code, (ii) the Lease Indenture Trustee cannot recover in excess of
approximately $550 million, including any recoveries they may receive as a result of their primary claims against the two lessee entities, (iii) the Lease Indenture Trustee has
significant other sources of recovery on its lease rejection damages claim and (iv) certain aspects of its claim have already been resolved by the Court and released by the relevant
counterparties The Plan Proponents have estimated the lease claims (exclusive of the TIA Claim) at $190 million to reflect our belief that the aggregate amount of such allowed claims (including
PSEG's $110 million allowed claim) will not exceed $300 million, which is the maximum amount in which such claims may be allowed for the Plan to become effective (subject only to the
potential waiver of such condition precedent to consummation of the Plan by the Plan Proponents to allow such claims in an amount up to $400 million (or $290 million net of PSEG's
$110 million allowed claim) or the Plan Proponents and the Consenting Noteholders, collectively, to allow such claims in an amount in excess of $400 million (or $290 million net
of PSEG's $110 million allowed claim). However, as indicated herein, the allowed amounts of the lease claims are the subject of litigation, the outcome of which is inherently uncertain, and
therefore may be significantly higher or lower.

Senior Notes and Debentures.In general, our Senior Notes are senior unsecured obligations and rank equal in right of payment to
all of our existing
and future senior unsecured indebtedness, and are senior to all of our existing and any of our future subordinated indebtedness. They are not redeemable at our option prior to maturity. Dynegy did not
guarantee the Senior Notes, and the assets that we own do not secure the Senior Notes. None of our subsidiaries have guaranteed the Senior Notes and, as a result, all of the existing and future
liabilities of our subsidiaries are effectively senior to the Senior Notes.

Subordinated Debentures.In May 1997, NGC Corporation Capital Trust I ("Trust") issued, in a private transaction,
$200 million aggregate
liquidation amount of 8.316 percent Subordinated Capital Income Securities ("SCIS") representing preferred undivided beneficial interests in the assets of the Trust. The Trust invested the
proceeds from the issuance of the SCIS in an equivalent amount of our 8.316 percent Subordinated Debentures ("Subordinated Debentures"). The sole assets of the Trust are the Subordinated
Debentures. The SCIS are subject to mandatory redemption in whole, but not in part, on June 1, 2027, upon payment of the Subordinated Debentures at maturity, or in whole, but not in part, at
any time, contemporaneously with the optional prepayment of the Subordinated Debentures, as allowed by the associated indenture. The Subordinated Debentures are redeemable, at our option, at specified
redemption prices. The Subordinated Debentures represent our unsecured obligations and rank subordinate and junior in right of payment to all of our senior indebtedness to the extent and in the manner
set forth in the associated indenture. We have irrevocably and unconditionally guaranteed, on a subordinated basis, payment for the benefit of the holders of the SCIS the obligations of the Trust to
the extent the Trust has funds legally available for distribution to the holders of the Trust Securities. Since the Trust is considered a VIE, and the holders of the SCIS absorb a majority of the
Trust's

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 13Liabilities Subject to Compromise (Continued)

expected
losses, our obligation is represented by the Subordinated Debentures payable to the deconsolidated Trust.

We
may defer payment of interest on the Subordinated Debentures as described in the indenture, and we deferred our $8 million June 2011 payment of interest. As of
December 31, 2011, the redemption amount associated with these securities totaled $200 million.

Note payable, affiliate.On August 5, 2011, Dynegy Coal Holdco, LLC made a loan to DH of $10 million with a
maturity of
3 years and an interest rate of 9.25 percent per annum.

Note 14Debt

A summary of our long-term debt is as follows:

December 31,
2011Carrying
Amount

Fair
Value(in millions)DPC Credit Agreement, due 2016

$
1,097

$
1,118Unamortized premium (discount) on debt, net


(21
)1,076Less: Amounts due within one year, including non-cash amortization of basis adjustments


7Total Long-Term Debt

$
1,069


Aggregate
maturities of the principal amounts of all long-term indebtedness as of December 31, 2011 are as follows: 2013$7 million,
2014$6, 2015$6 million, 2016$1,050 million and thereafterzero.



In August 2011, DPC entered into a $1,100 million senior secured term loan (the "DPC Credit Agreement"). The DPC Credit
Agreement is a senior secured term loan facility
with an aggregate principal amount of $1,100 million, which was borrowed in a single drawing on the closing date. Amounts borrowed under the DPC Credit Agreement that are repaid or prepaid may
not be re-borrowed. The DPC Credit Agreement will mature on August 5, 2016 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00 percent
of the original principal amount of the DPC Credit Agreement with the balance payable on the fifth anniversary of the closing date.

The
proceeds of the borrowing under the DPC Credit Agreement were used by DPC to (i) repay an intercompany obligation of a DPC subsidiary to DH and to repay certain outstanding
indebtedness under DH's previous Fifth Amended and Restated Credit Agreement, which was terminated in August

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 14Debt (Continued)

2011,
(ii) fund cash collateralized letters of credit and provide cash collateral for existing and future collateral requirements, (iii) repay approximately $192 million of debt
relating to Sithe Energies, Inc. (the intermediate project holding company that indirectly holds the Independence facility in New York), (iv) make a $200 million restricted
payment to a parent holding company of DPC, (v) pay related transaction fees and expenses and (vi) fund additional cash to the balance sheet to provide the DPC asset portfolio with
liquidity for general working capital and liquidity purposes.

All
obligations of DPC under (i) the DPC Credit Agreement (the "DPC Borrower Obligations") and (ii) at the election of DPC, (x) cash management arrangements and
(y) interest rate protection, commodity trading or hedging or other permitted hedging or swap arrangements (the "Hedging/Cash Management Arrangements") are unconditionally guaranteed jointly
and severally on a senior secured basis (the "DPC Guarantees") by each existing and subsequently acquired or organized direct or indirect material domestic subsidiary of DPC (the "DPC Guarantors"), in
each case, as otherwise permitted by applicable law, regulation and contractual provision and to the extent such guarantee would not result in adverse tax consequences as reasonably determined by DPC.
None of DPC's parent companies are obligated to repay the DPC Borrower Obligations.

The
DPC Borrower Obligations, the DPC Guarantees and any Hedging/Cash Management Arrangements are secured by first priority liens on and security interests in 100 percent of the
capital stock of DPC (as discussed below) and substantially all of the present and after-acquired assets of DPC and each DPC Guarantor (collectively, the "DPC Collateral"). Accordingly, such assets
are only available for the creditors of Dynegy Gas Investments Holdings, LLC and its subsidiaries. DPC has restricted consolidated net assets of approximately $1,813 million, as of
December 31, 2011.

Interest Costs.The DPC Credit Agreement bears interest, at DPC's option, at either (a) 7.75 percent per
annum plus LIBOR, subject to a LIBOR floor of 1.50 percent, with respect to any Eurodollar term loan or (b) 6.75 percent per annum plus the alternate base rate with respect to any
ABR term loan. DPC may elect from time to time to convert all or a portion of the term loan from any ABR Borrowing into a Eurodollar Borrowing or vice versa. With some exceptions, amounts outstanding
under the DPC Credit Agreement are non-callable for the first two years and is subject to a prepayment premium.

On
October 19, 2011, DPC entered into a variety of transactions to hedge interest rate risks associated with the DPC Credit Agreement. DPC entered into LIBOR interest rate caps at
2 percent with a notional value of $900 million through October 31, 2013. DPC also entered into LIBOR interest rate swaps with a notional value of $788 million commencing
on November 1, 2013 through August 5, 2016. The notional value of the swaps decreases over time, reaching $744 million at the end of the term. These instruments, which meet the
definition of a derivative, have not been designated as accounting hedges and are accounted for at fair value.

Prepayment Provisions.The DPC Credit Agreement contains mandatory prepayment provisions. The outstanding loan under the DPC
Credit Agreement is to
be prepaid with (a) 100 percent of the net cash proceeds of all asset sales by DPC and its subsidiaries, subject to the right of DPC to reinvest

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 14Debt (Continued)

such
proceeds if such proceeds are reinvested (or committed to be reinvested) within 12 months and, if so committed to reinvestment, reinvested within six months after such initial
12 month period, (b) 50 percent of the net cash proceeds of issuance of equity securities of DPC and its subsidiaries (except to the extent used for permitted capital
expenditures), (c) commencing with the first full fiscal year of DPC to occur after the closing date, 100 percent of excess cash flow; provided that (i) excess cash flow shall be
determined after reduction for amounts used for capital expenditures and restricted payments and (ii) any voluntary prepayments of the term loans shall be credited against excess cash flow
prepayment obligations, and (d) 100 percent of the net cash proceeds of issuances, offerings or placements of debt obligations of DPC and its subsidiaries (other than all permitted
debt). Notwithstanding the above, the proceeds of a sale of up to 20 percent of the membership interests in DPC are not required to be used to prepay the outstanding loan under the DPC Credit
Agreement.

Covenants and Events of Default.The DPC Credit Agreement contains customary events of default and affirmative and negative
covenants including,
subject to certain specified exceptions, limitations on amendments to constitutive documents, liens, capital expenditures, acquisitions, subsidiaries and joint ventures, investments, the incurrence of
debt, fundamental changes, asset sales, sale-leaseback transactions, hedging arrangements, restricted payments, changes in
nature of business, transactions with affiliates, burdensome agreements, amendments of debt and other material agreements, accounting changes and prepayment of indebtedness or repurchases of equity
interests.

The
DPC Credit Agreement contains a requirement that DPC shall establish and maintain a segregated account (the "DPC Collateral Posting Account"), into which a specified collateral
posting amount shall be deposited. DPC may withdraw amounts from the DPC Collateral Posting Account: (i) for the purpose of meeting collateral posting requirements of DPC and the DPC
Guarantors; (ii) to prepay the term loan under the DPC Credit Agreement; (iii) to repay certain other permitted indebtedness; and (iv) to the extent any excess amounts are
determined to be in the DPC Collateral Posting Account.

The
DPC Credit Agreement limits distributions to $135 million per year provided the borrower and its subsidiaries possess at least $50 million of unrestricted cash and
short-term investments as of the date of the proposed distribution.



In August 2011, DPC entered into two fully cash collateralized Letter of Credit Reimbursement and Collateral Agreements aggregating
$515 million pursuant to which letters of credit will be issued at DPC's request provided that DPC deposits in an account an amount of cash sufficient to cover the face value of such requested
letter of credit plus an additional percentage thereof.

In
August 2011, DH entered into a $26 million fully cash collateralized Letter of Credit Reimbursement and Collateral Agreement pursuant to which letters of credit will be issued
at DH's request provided that DH deposits in an account an amount of cash sufficient to cover the face value of such requested letter of credit plus an additional percentage thereof.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 14Debt (Continued)



On May 21, 2010, DH executed a new $150 million unsecured bilateral contingent letter of credit facility ("Contingent LC
Facility") with Morgan Stanley Capital Group Inc. to provide DH access to liquidity to support collateral posting requirements. Availability under the Contingent LC Facility is tied to
increases in 2012 forward spark spreads and power prices. A facility fee will accrue on the unutilized portion of the facility at an annual rate of 0.60 percent and letter of credit
availability fees will accrue at an annual rate of 7.25 percent. The facility will mature on December 31, 2012. No amounts were available under this facility at December 31, 2011.
The Contingent LC Facility is a pre-petition obligation of DH and DH is not currently paying any facility or availability fees related to the Contingent LC Facility. DH's status as a
Debtor Entity may further limit availability pursuant to certain conditions and default events specified in the Contingent LC Facility.



The following table depicts our restricted cash and investments:

December 31,
2011(in millions)DPC LC facilities(1)

$
455DH LC facility(1)


27DPC Collateral Posting Account(2)


132Total restricted cash and investments

$
614


(1)Includes
cash posted to support the letter of credit reimbursement and collateral agreements described above. Please read note LC Facilities above
for further discussion.(2)Amounts
are restricted and may be used for future collateral posting requirements or released per the terms of the applicable DPC Credit Agreements.


Note 15Related Party Transactions

The following table summarizes the Accounts receivable, affiliates, and Accounts payable, affiliates, on our consolidated balance sheet as of December 31, 2011 and cash received
(paid) during the period

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 15Related Party Transactions (Continued)

from
November 8, 2011 through December 31, 2011 related to various agreements with Dynegy, as discussed below:

Accounts
Receivable,
Affiliates

Accounts
Payable,
Affiliates

Cash
Received
(Paid)(in millions)Service Agreements

$
4

$
6

$
(16
)EMA Agreements


22


41


1Total

$
26

$
47

$
(15
)


Service Agreements.Dynegy and certain of our subsidiaries (collectively, the "Providers") provide certain services (the
"Services") to Dynegy Coal
Investments Holdings, LLC ("DCIH") and certain of its subsidiaries, and certain of our subsidiaries (collectively, the "Recipients"). Service Agreements between Dynegy and the Recipients, which
were entered into in connection with the Reorganization, govern the terms under which such Services are provided.

The
Providers act as agents for the Recipients for the limited purpose of providing the Services set forth in the Service Agreement. The Providers may perform additional services at the
request of the Recipients, and will be reimbursed for all costs and expenses related to such additional services. Prior to the beginning of each fiscal year in which Services are to be provided
pursuant to the Service Agreement, the Providers and the Recipients must agree on a budget for the Services, outlining, among
other items, the contemplated scope of the Services to be provided in the following fiscal year and the cost of providing each Service. The Recipients will pay the Providers an annual management fee
as agreed in the budget, which shall include reimbursement of out-of pocket costs and expenses related to the provision of the Services and will provide reasonable assistance, such as
information, services and materials, to the Providers. We incurred expenses with the Providers which was offset by income recorded for the services that were provided. Therefore, there is no impact of
the Services Agreement on our consolidated statement of operations for the year period from November 8, 2011 through December 31, 2011.

Energy Management Agreements.Certain of our subsidiaries have entered into an Energy Management Agency Services Agreement (an
"EMA") with Dynegy
Midwest Generation, LLC ("DMG"), a subsidiary of Dynegy, Inc. Pursuant to the EMA, our subsidiaries will provide power management services to DMG, consisting of marketing power and
capacity, capturing pricing arbitrage, scheduling dispatch of power, communicating with the applicable ISOs or RTOs, purchasing replacement power, and reconciling and settling ISO or RTO invoices. In
addition, certain of our subsidiaries will provide fuel management services, consisting of procuring the requisite quantities of fuel and emissions credits, assisting with transportation, scheduling
delivery of fuel, assisting DMG with development and implementation of fuel procurement strategies, marketing and selling excess fuel and assisting with the evaluation of present and
long-term fuel purchase and transportation options. Our subsidiaries will also assist DMG with risk management by entering into one or more risk management

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 15Related Party Transactions (Continued)

transactions,
the purpose of which is to set the price or value any commodity or to mitigate or offset any change in the price or value of any commodity. Our subsidiaries may from time to time provide
other services as the parties may agree. Our consolidated statement of operations includes $33 million from sales to affiliates, which is reflected in Revenues, and $96 million in
purchases from affiliates, which is reflected in Costs of sales, for the period from November 8, 2011 through December 31, 2011. This activity is presented net within revenue along with
the related third party sales and purchases as DH's consolidated subsidiaries are in substance acting as agent for the affiliates. Also, please read Note 5Risk Management
Activities, Derivatives and Financial Instruments for derivative balances with affiliates.

Tax Sharing Agreement.Under U.S. federal income tax law, Dynegy is responsible for the tax liabilities of its subsidiaries,
because Dynegy files
consolidated income tax returns, which will necessarily include the income and business activities of the ring-fenced entities and Dynegy's other affiliates. To properly allocate taxes among Dynegy
and each of its entities, Dynegy and certain of its entities, including us and our subsidiaries, have entered into a Tax Sharing Agreement under which Dynegy agrees to prepare consolidated returns on
behalf of itself and its entities and make all required payments to relevant revenue collection authorities as required by law. Additionally, DPC agreed to make payments
to Dynegy of the tax amounts for which DPC and its respective subsidiaries would have been liable if such subsidiaries began business on the restructuring date (August 5, 2011) and were
eligible to, and elected to, file a consolidated return on a stand-alone basis beginning on the restructuring date. Further, each of Dynegy GasCo Holdings, LLC, Dynegy Gas
Holdco, LLC, and Dynegy Gas Investments Holdings, LLC, agreed to make payments to Dynegy of amounts representing the tax that each such subsidiary would have paid if each began business
on the restructuring date and filed a separate corporate income tax return (excluding from income any subsidiary distributions) on a stand-alone basis beginning on the restructuring date.

Cash Management.Certain of our subsidiaries are "bankruptcy remote." In addition, certain of our subsidiaries are organized into
ring-fenced groups. The special purpose bankruptcy remote entities entered into limited liability company operating agreements, which contain certain restrictions including not allowing
the "bankruptcy remote" or "ring-fenced" companies to act as an agent for a non ring-fenced company. Furthermore, bankruptcy remote and ring-fenced companies are
required to present themselves to the public as separate entities. They maintain separate books, records and bank accounts and separately appoint officers. Additionally, they pay liabilities from
their own funds, they conduct business in their own names (other than any business relating to the trading activities of us and our subsidiaries), they observe a higher level of formalities, and they
have restrictions on pledging their assets for the benefit of certain other persons.

Our
ring-fenced entities maintain cash accounts separate from those of our non-ring-fenced entities. As such, cash collected by a ring-fenced entity is not swept
into accounts held in the name of any non-ring-fenced entity and cash collected by a non-ring-fenced entity is not swept into accounts held in the name
of any ring-fenced entity. The cash in deposit accounts owned by a ring-fenced entity is not used to pay the debts and/or operating expenses of any
non-ring-fenced entity, and the cash in

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 15Related Party Transactions (Continued)

deposit
accounts owned by a non-ring-fenced entity is not used to pay the debts and/or operating expenses of any ring-fenced entity. There were no material payments
during the period from November 8, 2011 through December 31, 2011 related to the Cash Management Agreement.

DMG Transfer and Undertaking Agreement.On September 1, 2011, Dynegy and Dynegy Gas Investments, LLC ("DGIN"), a
subsidiary of DH,
entered into a Membership Interest Purchase
Agreement pursuant to which DGIN transferred 100 percent of its outstanding membership interests in Coal HoldCo, wholly owned subsidiary of DGIN, to Dynegy (the "DMG Transfer"). Dynegy's
management and Board of Directors, as well as DGIN's board of managers, concluded that the fair value of the acquired equity stake in Coal HoldCo at the time of the transaction was approximately
$1.25 billion, after taking into account all debt obligations of DMG, including in particular the DMG Credit Agreement. Dynegy provided this value to DGIN in exchange for Coal HoldCo through
its obligation, pursuant to an unsecured Undertaking Agreement (the "Undertaking Agreement"), to make certain specified payments over time which coincide in timing and amount with the payments of
principal and interest that we are obligated to make under a portion of our $1.1 billion of 7.75 percent senior unsecured notes due 2019 and our $175 million of
7.625 percent senior debentures due 2026. The Undertaking Agreement does not provide any rights or obligations with respect to any of our outstanding notes or debentures, including the notes
and debentures due in 2019 and 2026. When Dynegy's management and Board of Directors, as well as DGIN's board of managers, valued the acquired equity stake of Coal Holdco, they considered many
factors, including a valuation range prepared by our financial advisor. Our financial advisor recently informed us that in preparing its valuation range of such equity stake, a mathematical error may
have resulted in its valuation range being understated by $100 million. We are continuing to investigate and determine the implications, if any, of this new information.

Immediately
after closing the DMG Transfer, DGIN assigned its right to receive payments under the Undertaking Agreement to us in exchange for a promissory note (the "Promissory Note") in
the amount of $1.25 billion that matures in 2027 (the "Assignment"). Dynegy's obligations under the Promissory Note will be reduced if the outstanding principal amount of any of our
$3.5 billion of outstanding notes and debentures is decreased as a result of any exchange offer, tender offer or other purchase or repayment by Dynegy or its subsidiaries (other than us and our
subsidiaries, unless Dynegy guarantees the debt securities of us or such subsidiary in connection with such exchange offer, tender offer or other purchase or repayment); provided, that such principal
amount is retired, cancelled or otherwise forgiven.

During
the period from November 8, 2011 through December 31, 2011, we recognized $14 million in interest income related to the Undertaking agreement which is
included in Other income and expense, net, in our consolidated statement of operations. In addition, we received payments totaling $22 million from Dynegy in December 2011 related to the
Undertaking.

Note payable, affiliate.On August 5, 2011, Dynegy Coal Holdco, LLC made a loan to DH of $10 million with a
maturity of
3 years and an interest rate of 9.25 percent per annum.

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 15Related Party Transactions (Continued)

Accounts receivable, affiliate.We have historically recorded intercompany transactions in the ordinary course of business,
including the
reallocation of deferred taxes between legal entities in accordance with applicable IRS regulations. As a result of such transactions, we have recorded and adjusted over time an affiliate receivable
balance in the amount of $846 million. This receivable is classified within equity as there are no defined payment terms, it is not evidenced by any promissory note, and there was never an
intent for payment to occur. The creditors' committee contends that we may possess a cause of action against Dynegy for payment of the intercompany receivable. By letter dated February 29,
2012, the creditors' committee made demand on us to pursue a cause of action against Dynegy for payment of the intercompany receivable or, alternatively, requesting that we agree that the creditors'
committee may commence and prosecute such action (the "Demand Letter"). The creditors' committee contends that if we decline to pursue such action, the creditors' committee will seek standing from the
Bankruptcy Court to bring an action on behalf of our estate. We do not believe that a valid and enforceable right of payment of the intercompany amount exists and, accordingly, we believe that it
would be a waste of valuable estate resources to pursue litigation seeking repayment of the intercompany receivable. Accordingly, we intend to formally respond to, and dispute, the Demand Letter and
oppose any effort by the creditors' committee to seek standing to bring an action on behalf of our estate.

Employee benefits.Our employees participate in the pension plans of our parent, Dynegy Inc. Please read
Note 18Employee
Compensation, Savings and Pension Plans for further discussion.

Note 16Income Taxes (Restated)

Income Tax Expense.Our loss from continuing operations before income taxes was $751 million which was solely from domestic
sources.

Our
income tax benefit related to loss from continuing operations was $188 million for the period from November 8, 2011 through December 31, 2011.

Our
income tax benefit related to loss from continuing operations for the period from November 8, 2011 through December 31, 2011 was equivalent to an effective rate of
25 percent. Differences between taxes computed at the U.S. federal statutory rate and our reported income tax benefit for the period from November 8, 2011 through December 31,
2011 were as follows (in millions):

Expected tax benefit at U.S. statutory rate (35%)

$
263State taxes


15Permanent differences


(2
)Valuation allowance


(96
)Other


8Income tax benefit

$
188


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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 16Income Taxes (Restated) (Continued)

Deferred Tax Liabilities and Assets.Our significant components of deferred tax assets and liabilities as of December 31,
2011 were as follows
(in millions):

Current:Deferred tax assets:Reserves (legal, environmental and other)

$
3Miscellaneous book/tax recognition differences


17Subtotal


20Less: valuation allowance


(10
)Total current deferred tax assets


10Deferred tax liabilities:Miscellaneous book/tax recognition differences


(60
)Total current deferred tax liabilities


(60
)Net deferred tax asset (liability)


(50
)Non-current:Deferred tax assets:NOL carryforwards


510AMT credit carryforwards


Reserves (legal, environmental and other)


2Other comprehensive income


6Deferred intercompany loss


486Power contracts


229Subtotal


1,233Less: valuation allowance


(663
)Total non-current deferred tax assets


570Deferred tax liabilities:Depreciation and other property differences


(526
)Total non-current deferred tax liabilities


(526
)Net deferred tax liability

$
(6
)


NOL Carryforwards.At December 31, 2011, we had approximately $1,227 million of regular federal tax NOL carryforwards and
$1,975 million of AMT NOL carryforwards. The federal and AMT NOL carryforwards will expire beginning in 2027 and 2024, respectively. As a result of the application of certain provisions of the
Internal Revenue Code, we incurred an ownership change in May 2007 that placed an annual limitation on our ability to utilize certain tax carryforwards, including our NOL carryforwards. We do not
expect that the ownership change will have any impact on our future tax liability. We do not believe we will produce sufficient future taxable income, nor are there tax planning strategies available,
to utilize existing tax attributes, including the federal and AMT NOL carryforwards;

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 16Income Taxes (Restated) (Continued)

therefore,
a valuation allowance of $673 million was recorded as of December 31, 2011, for the amount of tax benefits represented by Federal and AMT NOL carryforwards not otherwise realized by
reversing temporary differences.

At
December 31, 2011, state NOL carryforwards totaled $1,635 million.

Change in Valuation Allowance.Realization of our deferred tax assets is dependent upon, among other things, our ability to
generate taxable income
of the appropriate character in the future. At December 31, 2011, valuation allowances related to federal and state NOL carryforwards and credits have been established. Additionally, at
December 31, 2011, our temporary differences were on a net deferred tax assets position. We do not believe we will produce sufficient future taxable income, nor are there tax planning
strategies available, to realize the tax benefits of our net deferred tax assets associated with temporary differences. Accordingly, we have recorded a full valuation allowance against the temporary
differences.

The
changes in the valuation allowance by attribute were as follows:

State NOL
Carryforwards
and Credits

Federal NOL
Carryforwards
and Deferred
Tax Assets

Temporary
Differences

Total(in millions)Balance as of November 7, 2011

$
(82
)
$
(344
)
$
(151
)
$
(577
)Changes in valuation allowancecontinuing operations


(23
)

(86
)

13


(96
)Balance as of December 31, 2011

$
(105
)
$
(430
)
$
(138
)
$
(673
)


Unrecognized Tax Benefits.We are included in Dynegy Inc.'s consolidated income tax return in the U.S. federal jurisdiction,
 and
Dynegy Inc. files income tax returns in various states. Dynegy Inc. is no longer subject to U.S. federal income tax examinations for the years prior to 2009, and with few exceptions, is
no longer subject to state and local examinations prior to 2007. Dynegy Inc. is no longer subject to non-U.S. income tax examinations. Dynegy Inc.'s federal income tax
returns are routinely audited by the IRS, and provisions are routinely made in the financial statements in anticipation of the
results of these audits. During the period from November 8, 2011 through December 31, 2011, we did not finalize any audits with the IRS.

As
of December 31, 2011, approximately $4 million of unrecognized tax benefits would impact our effective tax rate if recognized.

The
changes to our unrecognized tax benefits during the period from November 8, 2011 through December 31, 2011 primarily resulted from changes in various federal and state
audits and positions. The adjustments to our reserves for uncertain tax positions as a result of these changes had an insignificant impact on our net income.

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 16Income Taxes (Restated) (Continued)

During
the period from November 8, 2011 through December 31, 2011 we recognized less than $1 million in interest and penalties. We had approximately
$2 million accrued for the payment of interest and penalties at December 31, 2011.

We
expect that our unrecognized tax benefits could continue to change due to the settlement of audits and the expiration of statutes of limitation in the next twelve months; however, we
do not anticipate any such change to have a significant impact on our results of operations, financial position or cash flows in the next twelve months.

Note 17Commitments and Contingencies



Set forth below is a summary of our material ongoing legal proceedings. Pursuant to the requirements of FASB ASC 450 and related
guidance, we record accruals for estimated losses from contingencies when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably
estimated. In addition, we disclose matters for which management believes a material loss is reasonably possible. In all instances, management has assessed the matters below based on current
information and made judgments concerning their potential outcome, giving consideration to the nature of the claim, the amount, if any, and nature of damages sought and the probability of success.
Management regularly reviews all new information with respect to each such contingency and adjusts its assessment and estimates of such contingencies accordingly. Because litigation is subject to
inherent uncertainties including unfavorable rulings or developments, it is possible that the ultimate resolution of our legal proceedings could involve amounts that are different from our currently
recorded accruals and that such differences could be material.

In
addition to the matters discussed below, we are party to other routine proceedings arising in the ordinary course of business or related to discontinued business operations. Any
accruals or estimated losses related to these matters are not material. In management's judgment, the ultimate resolution of these matters will not have a material effect on our financial condition,
results of operations or cash flows.

Bondholder Litigation.On September 21, 2011, an ad-hoc group of bondholders (the "Avenue Plaintiffs") of DH filed a
complaint in
the Supreme Court of the State of New York, County of New York, captionedAvenue Investments, L.P. et al v. Dynegy Inc., Dynegy
Holdings, LLC, Dynegy Gas Investments, LLC, Clint C. Freeland, Kevin T. Howell and Robert C. Flexon(Index No. 652599/11) ("Avenue
Investments Matter"). The Avenue Plaintiffs challenge the September 2011 DMG Transfer. On September 27, 2011, the successor indenture trustees under the Roseton and Danskammer Indenture
Agreements (the "Indenture Trustee Plaintiffs") filed a complaint in the Supreme Court of the State of New York, captionedThe Successor Lease Indenture Trustee
et al v. Dynegy Inc., Dynegy Holdings, LLC, Dynegy Gas Investments, LLC, E. Hunter Harrison, Thomas W. Elward, Michael J. Embler,
Robert C. Flexon, Vincent J. Intrieri, Samuel Merksamer, Felix Pardo, Clint C. Freeland, Kevin T. Howell, John Doe 1, John Doe 2, John Doe 3,
Etc.(Index No. 652642/2011). The Indenture Trustee

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

Plaintiffs
similarly challenge the DMG Transfer. Plaintiffs in both actions allege, among other claims, breach of contract, breach of fiduciary duties, and violations of prohibitions on fraudulent
transfers in connection with the DMG Transfer and also seek to have the DMG Transfer set aside, and request
unspecified damages as well as attorneys' fees. We filed motions to dismiss the actions on October 31, 2011. On November 7, 2011, Dynegy, DH and the Consenting Noteholders (as defined in
Note 3Chapter 11 Cases) agreed to enter into a stipulation that suspends the prosecution of the Consenting Noteholders' claims in the Avenue Investments Matter.

On
November 4, 2011, the owner-lessors of the Danskammer and Roseton facilities (the "Owner Lessor Plaintiffs") filed a lawsuit in NY state court, captioned Resources Capital Management Corp., Roseton OL, LLC and
Danskammer OL, LLC, v. Dynegy Inc., Dynegy Holdings, Inc., Dynegy
Holdings, LLC, Dynegy Gas Investments, LLC, Thomas W. Elward, Michael J. Embler, Robert C. Flexon, E. Hunter Harrison, Vincent J. Intrieri,
Samuel J. Merksamer, Felix Pardo, Clint. C. Freeland, Kevin T. Howell, Icahn Capital LP, and Seneca Capital Advisors, LLC, alleging, among
other claims, that the Reorganization, the DPC and DMG Credit Agreements, and the DMG Transfer constitute an integrated scheme involving fraudulent transfers, breach of contract, and
breach of fiduciary duties, and seek a judgment to unwind all the transactions. Please read Note 3Chapter 11 Cases for further information regarding the bankruptcy
proceeding and claims asserted by the Lease Indenture Trustee.

On
November 21, 2011, the defendants filed in each action a Notice of Filing of Bankruptcy Petition and of the Automatic Stay, which provided, among other things, that
(i) "pursuant to section 362(a) of the Bankruptcy Code, this lawsuit is stayed in its entirety, as to all claims and all defendants (the "Automatic Stay")," and (ii) "actions
taken in violation of the Automatic Stay are void and may subject the person or entity taking such actions to the imposition of sanctions by the Bankruptcy Court. In addition, on November 21,
2011, the defendants filed two stipulations in the Avenue Litigation and a stipulation in the Trustee Litigation, pursuant to which the parties agreed, among other things, (i) to stay or take
no action in the Lawsuits, including the pending motions to dismiss, until further application, and (ii) to reserve all rights and/or arguments with respect to the scope or effect of the
Automatic Stay. Please read Note 3Chapter 11 Cases for further discussion.

We
believe the plaintiffs' complaints in all three lawsuits lack merit and we will continue to oppose their claims vigorously.

Gas Index Pricing Litigation.We, several of our affiliates, our former joint venture affiliate and other energy companies were
named as defendants
in numerous lawsuits in state and federal court claiming damages resulting from alleged price manipulation and false reporting of natural gas prices to various index publications in the
2000-2002 timeframe. Many of the cases have been resolved. All of the remaining cases contain similar claims that individually, and in conjunction with other energy companies, we engaged
in an illegal scheme to inflate natural gas prices in four states by providing false information to natural gas index publications. In November 2009, following defendants' motion for reconsideration,
the court invited defendants to renew their motions for summary judgment on preemption of plaintiffs' state law claims, which were filed shortly thereafter. Plaintiffs concurrently

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

moved
to amend their complaints to add federal claims. In October 2010, the court denied plaintiffs' motion to amend.

On
July 18, 2011, the Court granted defendants' motions for summary judgment, thereby dismissing all of plaintiffs' state law claims. Plaintiffs are appealing the decision to the
Ninth Circuit Court of Appeals.

Native Village of Kivalina and City of Kivalina v. ExxonMobil Corporation, et al.In February 2008, the Native Village
of Kivalina and
the City of Kivalina, Alaska initiated an action in federal court in the Northern District of California against DH and 23 other companies in the energy industry. Plaintiffs claim that defendants'
emissions of GHG including CO2 contribute to climate change and have caused significant damage to a native Alaskan Eskimo village through increased vulnerability to waves, storm surges and
erosion. In September 2009, the court dismissed all of the plaintiffs' claims based on lack of subject matter jurisdiction and because plaintiffs lacked standing to bring the suit. Shortly thereafter,
plaintiffs appealed to the Ninth Circuit. In February 2011, the Ninth Circuit issued an order staying the scheduling of oral argument until the United States Supreme Court's ruling in AEP v. Connecticut
("AEP").On June 20, 2011, the Supreme Court issued its decision in AEP.The Court was equally divided by a vote of 4-4 on the question of whether the plaintiffs had
standing to bring the suit and, therefore,
affirmed the court's exercise of jurisdiction. On the merits the Court ruled by a vote of 8-0 that the CAA and EPA action authorized by the Act displace any federal common law right
to seek abatement of carbon dioxide emissions from fossil fuel-fired power plants. The Court did not reach the issue of whether the CAA preempts similar claims under state nuisance law.
The Ninth Circuit held oral argument inKivalinaon November 28, 2011. However, on February 2, 2012, the parties filed a joint motion to
dismiss with prejudice DH as a defendant in the case due to the bankruptcy petition filed by DH in the Chapter 11 Cases.



In conducting our operations, we have routinely entered into long-term commodity purchase and sale commitments, as well as
agreements that commit future cash flow to the lease or acquisition of assets used in our businesses. These commitments have been typically associated with commodity supply arrangements, capital
projects, reservation charges associated with firm transmission, transportation, storage and leases for office space, equipment, plant sites, power generation assets and LPG vessel charters.
The following describes the more significant commitments outstanding at December 31, 2011.

Cooling Water Intake Permits.The cooling water intake structures at several of our power generation facilities are regulated
under
Section 316(b) of the Clean Water Act. This provision generally provides that standards set for power generation facilities require that the location, design, construction and capacity of
cooling water intake structures reflect the BTA for minimizing adverse environmental impact. These standards are developed and implemented for power generating facilities through the NPDES permits or
individual SPDES permits on a case-by-case basis.

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

The
environmental groups that participate in our NPDES and SPDES permit proceedings generally argue that only closed cycle cooling meets the BTA requirement. The issuance and renewal of
NPDES or SPDES permits for three of our power generation facilities (Danskammer, Roseton and Moss Landing) have been challenged on this basis. The Danskammer SPDES permit, which was renewed and issued
in June 2006, does not require installation of a closed cycle cooling system; however, it does require aquatic organism mortality reductions resulting from NYSDEC's determination of BTA requirements
under its regulations. All appeals of this permit have been exhausted. The Moss Landing NPDES permit, which was issued in 2000, does not require closed cycle cooling and was challenged by a local
environmental group. In August 2011, the Supreme Court of California affirmed the appellate court's decision upholding the permit. One permit challenge is still pending.



Other
future NPDES or SPDES proceedings could have a material effect on our financial condition, results of operations and cash flows; however, given the numerous variables and factors
involved in calculating the potential costs associated with installing a closed cycle cooling system, any decision to install such a system at any of our facilities would be made on a
case-by-case basis considering all relevant factors at such time. If capital expenditures related to cooling water systems are great enough to render the operation of the plant
uneconomical, we could, at our option, and subject to any applicable financing agreements or other obligations, reduce operations or cease to operate that facility and forego the capital expenditures.

Purchase Obligations.We have firm capacity payments related to transportation of natural gas. Such arrangements are routinely
used in the physical
movement and storage of energy. The total of such obligations was $257 million as of December 31, 2011.

Coal Commitments.At December 31, 2011, we had contracts in place to supply coal to various of Dynegy's generation
facilities with minimum
commitments of $449 million and are related to the purchase of coal through 2015. Most of the coal purchased under these contracts is sold to DMG, an affiliate, through a separate requirements
contract.

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

VLGC Charter Agreements.One of our subsidiaries is party to two charter party agreements relating to two VLGCs previously
utilized in our former
global liquids business. The aggregate minimum base commitments of the charter party agreements are approximately $18 million for 2012 and approximately $23 million in aggregate for the
period from 2013 through lease expiration. The charter party rates payable under the two charter party agreements vary in accordance with market-based rates for similar shipping services. The
$18 million and $23 million amounts set forth above are based on the minimum obligations set forth in the two charter party agreements. The primary terms of the charter party agreements
expire September 2013 and September 2014, respectively. Both VLGCs have been sub-chartered to a wholly-owned subsidiary of Transammonia Inc. The terms of the
sub-charters are identical to the terms of the original charter agreements. We rely on the sub-charters with a subsidiary of Transammonia to satisfy the obligations of the two
charter party agreements. To date, the subsidiary of Transammonia has complied with the terms of the sub-charter agreements.

Other Minimum Commitments.We have an interconnection obligation with respect to interconnection services for our Ontelaunee
facility, which expires
in 2027. Our obligation under this agreement is approximately $1 million per year through the term of the contract.

Minimum
commitments in connection with office space, equipment, plant sites and other leased assets, at December 31, 2011, were as follows: 2012$5 million,
2013$6 million, 2014$6 million, 2015$6 million, 2016$6 million and beyond$7 million.

Rental
payments made under the terms of these arrangements totaled $1 million for the period from November 8, 2011 through December 31, 2011.



In the ordinary course of business, we routinely enter into contractual agreements that contain various representations, warranties,
indemnifications and guarantees. Examples of such agreements include, but are not limited to, service agreements, equipment purchase agreements, engineering and technical service agreements, asset
sales and procurement and construction contracts. Some agreements contain indemnities that cover the other party's negligence or limit the other party's liability with respect to third party claims,
in which event we will effectively be indemnifying the other party. Virtually all such agreements contain representations or warranties that are covered by indemnifications against the losses incurred
by the other parties in the event such representations and warranties are false. While there is always the possibility of a loss related to such representations, warranties, indemnifications and
guarantees in our contractual agreements, and such loss could be significant, in most cases management considers the probability of loss to be remote. Related to the indemnifications discussed below,
we have accrued approximately $1 million as of December 31, 2011.

LS Power Indemnities.In connection with the sale of certain power generation facilities to LS Power in 2009, we agreed to
indemnify LS Power against
claims regarding any breaches in our representations and warranties and certain other potential liabilities. Claims for indemnification shall survive until twelve months subsequent to closing with
exceptions for tax claims, which shall survive for

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

the
applicable statute of limitations plus 30 days, and certain other representations and potential liabilities, which shall survive indefinitely. The indemnifications provided to LS Power are
limited to $1.3 billion in total; however, several categories of indemnifications are not available to LS Power until
the liabilities incurred in the aggregate are equal to or exceed $15 million and are capped at a maximum of $100 million. Further, the purchase and sale agreement provides in part that
we may not reduce or avoid liability for a valid claim based on a claim of contribution. In addition to the above indemnities related to the LS Power Transactions, we have agreed to indemnify LS Power
against claims related to the Riverside/Foothills Project for certain aspects of the project. Namely, LS Power has been indemnified for any disputes that arise as to ownership, transfer of bonds
related to the project, and any failure by us to obtain approval for the transfer of the payment in-lieu of taxes program already in place. The indemnities related solely to the
Riverside/Foothills Project are capped at a maximum of $180 million and extend until the earlier of the expiration of the tax agreement or December 26, 2026. At this time, we have
incurred no significant expenses under these indemnities.

West Coast Power Indemnities.In connection with the sale of our 50 percent interest in West Coast Power to NRG on
March 31, 2006, an
agreement was executed to allocate responsibility for managing certain litigation and provide for certain indemnities with respect to such litigation. The indemnification agreement in relevant part
provides that NRG assumes responsibility for all defense costs and any risk of loss, subject to certain conditions and limitations, arising from a February 2002 complaint filed at FERC by the
California Public Utilities Commission alleging that several parties, including West Cost Power subsidiaries, overcharged the State of California for wholesale power. FERC found the rates charged by
wholesale suppliers to be just and reasonable; however, this matter was appealed and ultimately remanded back to FERC for further review. On May 24, 2011 and May 26, 2011, FERC issued
two orders in these dockets. The first order denied the request of the California Parties for consolidation of various dockets and denied their request for summary disposition on market manipulation
issues. The second order addressed treatment of settled parties and the scope of hearing issues in the ongoing proceedings.

Targa Indemnities.During 2005, as part of our sale of our midstream business ("DMSLP"), we agreed to indemnify Targa Resources,
 Inc.
("Targa") against losses it may incur under indemnifications DMSLP provided to purchasers of certain assets, properties and businesses disposed of by DMSLP prior to our sale of DMSLP. We have incurred
no material expense under these prior indemnities. We have recorded an accrual of less than $1 million for remediation of groundwater contamination at the Breckenridge Gas Processing Plant sold
by DMSLP in 2001. The indemnification provided by DMSLP to the purchaser of the plant has a limit of $5 million.

Black Mountain Guarantee.Through one of our subsidiaries, we hold a 50 percent ownership interest in Black Mountain (Nevada
Cogeneration)
("Black Mountain"), in which our partner is a Chevron subsidiary. Black Mountain owns the Black Mountain power generation facility and has a power purchase agreement with a third party that extends
through April 2023. In connection with the power purchase agreement, pursuant to which Black Mountain receives payments which decrease in amount over time, we agreed to guarantee 50 percent of
certain payments that may be due to the

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 17Commitments and Contingencies (Continued)

power
purchaser under a mechanism designed to protect it from early termination of the agreement. At December 31, 2011, if an event of default due to early termination had occurred under the
terms of the mortgage on the facility entered into in connection with the power purchase agreement, we could have been required to pay the power purchaser approximately $53 million under the
guarantee.

Other Indemnities.We entered into indemnifications regarding environmental, tax, employee and other representations when
completing asset sales such
as, but not limited, to the Rolling Hills, Calcasieu, CoGen Lyondell and Heard County power generating facilities. As of December 31, 2011, no claims have been made against these indemnities.
There is no limitation on our liability under certain of these indemnities. However, management is unaware of any existing claims.

Note 18Employee Compensation, Savings and Pension Plans

Plans Sponsored by Dynegy

Our parent, Dynegy, sponsors and administers defined benefit plans and defined contribution plans for the benefit of our employees and
also provides other post retirement benefits to retirees who meet age and service requirements. For the period from November 8, 2011
through December 31, 2011, our contributions related to these plans were less than $1 million. The following summarizes these plans:

Short-Term Incentive Plan.Dynegy maintains a discretionary incentive compensation plan to provide our employees with rewards
for the
achievement of corporate goals and individual, professional accomplishments. Specific awards are determined by Dynegy's Compensation and Human Resources Committee of the Board of Directors and are
based on predetermined goals and objectives established at the start of each performance year.

Phantom Stock Plan.In 2010 and 2009, Dynegy issued phantom stock units under its 2009 Phantom Stock Plan. Units awarded under
this plan are long
term incentive awards that grant the participant the right to receive a cash payment based on the fair market value of Dynegy's stock on the vesting date of the award. As these awards must be settled
in cash, they are accounted for as liabilities, with changes in the fair value of the liability recognized as expense in the consolidated statement of operations. Our share of this expense is
allocated to us by Dynegy and we recognized a benefit of $1 million related to these awards for the period from November 8, 2011 through December 31, 2011 as a result of a
decrease in Dynegy's stock price.

401(k) Savings Plans.Our employees participated in various 401(k) savings plans sponsored by Dynegy, all of which meet the
requirements of
Section 401(k) of the Internal Revenue Code and are defined contribution plans subject to the provisions of ERISA.

Pension and Other Post-Retirement Benefits

Dynegy sponsors various defined benefit pension plans and post-retirement benefit plans. Generally, all employees
participate in the pension plans (subject to the plans eligibility requirements), but only some of our employees participate in the other post-retirement medical and life insurance

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DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 18Employee Compensation, Savings and Pension Plans (Continued)

benefit
plans. The pension plans are in the form of cash balance plans and more traditional career average or final average pay formula plans.

Restoration Plans.In 2008, Dynegy adopted the Dynegy Inc. Restoration 401(k) Savings Plan, or the Restoration 401(k) Plan,
and the
Dynegy Inc. Restoration Pension Plan, or the Restoration Pension Plan, two nonqualified plans that supplement or restore benefits lost by certain of our highly compensated employees under the
qualified plans as a result of Internal Revenue Code limitations that apply to the qualified plans. The Restoration 401(k) Plan is intended to supplement benefits under certain of the 401(k) plans,
and the Restoration Pension Plan is intended to supplement benefits under certain of the pension plans. Employees who are eligible employees under the related qualified plans and earn in excess of
certain of the qualified plan limits are eligible to participate in the restoration plans. The definitions of plan pay under the restoration plans, as well as the vesting rules, mirror those under the
related qualified plans. Benefits under the restoration plans are paid as a lump sum.

Obligations and Funded Status.The following tables contain information about the obligations and funded status of the defined
benefit pension plan
and post-retirement benefit plan sponsored by us:

Pension
Benefits

Other
Benefits2011

2011(in millions)Projected benefit obligation, as of November 7, 2011

$
1

$
19Service cost





Interest cost





Actuarial (gain) loss





Benefits paid





Plan change





Curtailments





(1
)Projected benefit obligation, end of the year

$
1

$
18Fair value of plan assets, as of November 7, 2011

$
1

$
Actual return on plan assets





Employer contributions





Benefits paid





Fair value of plan assets, end of the year

$
1

$
Funded status

$


$
(18
)


F-56

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 18Employee Compensation, Savings and Pension Plans (Continued)

The
accumulated benefit obligation for our defined benefit pension plan was $1 million at December 31, 2011. The following summarizes information for our defined benefit
pension plan, which has an accumulated benefit obligation in excess of plan assets at December 31, 2011:

December 31,
2011(in millions)Projected benefit obligation

$
1Accumulated benefit obligation


1Fair value of plan assets


1


Pre-tax
amounts recognized in Accumulated other comprehensive loss consist of:

Period from
November 8, 2011
through
December 31, 2011Pension
Benefits

Other
Benefits(in millions)Prior service cost

$


$
Actuarial loss





Net losses recognized

$


$



Amounts
recognized in the consolidated balance sheet consist of:

December 31, 2011Pension
Benefits

Other
Benefits(in millions)Current liabilities

$


$
(1
)Noncurrent liabilities





(18
)Net amount recognized

$


$
(19
)


The
estimated net actuarial loss and prior service cost that will be amortized from Accumulated other comprehensive loss into net periodic benefit cost during the year ended
December 31, 2012 for the defined benefit pension plans are both zero, respectively. The estimated net actuarial loss and prior service cost that will be amortized from Accumulated other
comprehensive loss into net periodic benefit cost during the year ended December 31, 2012 for other postretirement benefit plans are both zero. The amortization of prior service cost is
determined using a straight line amortization of the cost over the average remaining service period of employees expected to receive benefits under the Plan.

F-57

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 18Employee Compensation, Savings and Pension Plans (Continued)

Components of Net Periodic Benefit Cost.The components of net periodic benefit cost were:

Pension
Benefits

Other
Benefits(in millions)Service cost benefits earned during period

$


$
Interest cost on projected benefit obligation





Expected return on plan assets





Amortization of prior service costs





Recognized net actuarial loss





Cost of curtailment





(1
)Total net periodic benefit cost

$


$
(1
)


Assumptions.The following weighted average assumptions were used to determine benefit obligations:

Pension
Benefits

Other
BenefitsDiscount rate (1)


4.80
%

4.93
%Rate of compensation increase


N/A


3.50
%


(1)We
utilized a yield curve approach to determine the discount. Projected benefit payments for the plans were matched against the discount rates in the yield
curve.


The
following weighted average assumptions were used to determine net periodic benefit cost:

Pension
Benefits

Other
BenefitsDiscount rate


5.49
%

5.61
%Expected return on plan assets


8.00
%

N/ARate of compensation increase


N/A


4.50
%


Our
expected long-term rate of return on plan assets for the year ended December 31, 2012 will be 7 percent. This figure begins with a blend of asset
class-level returns developed under a theoretical global capital asset pricing model methodology conducted by an outside consultant. In development of this figure, the historical relationships between
equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long-term.
Current market factors such as inflation and interest rates are also incorporated in the assumptions. The figure also incorporates an upward adjustment reflecting the plan's use of active management
and favorable past experience.

F-58

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 18Employee Compensation, Savings and Pension Plans (Continued)

The
following summarizes our assumed health care cost trend rates:

Health care cost trend rate assumed for next year


8.00
%Ultimate trend rate


4.50
%Year that the rate reaches the ultimate trend rate


2019


Assumed
health care cost trend rates have a significant effect on the amounts reported for the health care plans. The impact of a one percent increase/decrease in assumed health care
cost trend rates is as follows:

Increase

Decrease(in millions)Aggregate impact on service cost and interest cost

$


$
Impact on accumulated post-retirement benefit obligation

$
4

$
(3
)


Plan Assets.We employ a total return investment approach whereby a mix of equities and fixed income investments are used to
maximize the
long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is
established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income
investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks as well as growth, value, and small and large capitalizations. The target allocations for plan
assets are thirty-five percent fixed income securities, forty percent U.S. equity securities, five percent non-US equity securities, and twenty percent global equity
securities.

Derivatives
may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the
underlying investment. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, periodic asset/liability studies, and annual liability
measurements.

The
following table sets forth by level within the fair value hierarchy assets that were accounted for at fair value related to our pension plans. These assets are classified in their
entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the

F-59

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 18Employee Compensation, Savings and Pension Plans (Continued)

significance
of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value
hierarchy levels.

Fair Value as of December 31, 2011Level 1

Level 2

Level 3

Total(in millions)Equity securities:U.S. companies (1)

$


$
1

$


$
1Non-U.S. companies (2)











International (3)











Fixed income securities(4)











Total

$


$
1

$


$
1


(5)This
category comprises a domestic common collective trust not actively managed that tracks the Dow Jones total U.S. stock market.(6)This
category comprises a common collective trust not actively managed that tracks the MSCI All Country World Ex-US Index.(7)This
category comprises actively managed common collective trusts that hold U.S. and foreign equities. These trusts track the MSCI World Index.(8)This
category includes a mutual fund and a trust that invest primarily in investment grade corporate bonds.


Contributions and Payments.During the period from November 8, 2011 through December 31, 2011, we had less than
$1 million in
contributions to our pension plans and other post-retirement benefit plans. In 2012, we expect to contribute zero to our pension plans and zero to our other postretirement benefit plans.

Our
expected benefit payments for future services for our pension and other postretirement benefits are as follows:

Pension Benefits

Other Benefits(in millions)2012

$


$
12013





12014





2015





2016





12017 - 2021





5


F-60

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 19Segment Information (Restated)

We report the results of our power generation business in the following reportable segments (i) the Gas segment ("Gas") and (ii) the Dynegy Northeast segment ("DNE"). Our
consolidated financial results also reflect corporate-level expenses such as interest and depreciation and amortization. General and administrative expenses are allocated to each reportable segment.

During
the period from November 8, 2011 through December 31, 2011, three customers in Gas accounted for 14 percent, 11 percent and 12 percent of our
revenues. In Other, which includes power sales entered into on behalf of our affiliate, there was one customer representing 44 percent of our revenues.

Reportable
segment information for DH, including intercompany transactions accounted for at prevailing market rates, as of December 31, 2011 and for the period from
November 8 through December 31, 2011 is presented below.

Segment Data as of December 31, 2011 and
for the Period from November 8 through December 31, 2011
(in millions)

Gas

DNE

Other and
Eliminations

TotalTotal revenues

$
43

$
4

$
3

$
50Depreciation and amortization

$
(17
)
$
6

$
(1
)
$
(12
)General and administrative expense

$
(13
)
$
(1
)
$
7

$
(7
)Operating income (loss)

$
(80
)
$
(5
)
$
9

$
(76
)Other items, net








14


14Interest expense











(23
)Bankruptcy reorganization charges











(666
)Loss from continuing operations before income taxes











(751
)Income tax benefit (Restated)











188Net loss (Restated)










$
(563
)Identifiable assets (domestic) (Restated)

$
6,759

$
54

$
1,498

$
8,311Capital expenditures

$
(22
)
$
(1
)
$


$
(23
)


Note 20Subsequent Events (Unaudited)

The following significant events occurred subsequent to the original issuance date of these financial statements on March 8, 2012, but prior to the December 10, 2012
reissuance date and therefore require disclosure as nonrecognized subsequent events.

Settlement Agreement.On May 1, 2012, Dynegy and certain of its subsidiaries, including the DH Debtor Entities, entered into
a settlement
agreement with certain of DH's creditors, including certain

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 20Subsequent Events (Unaudited) (Continued)

beneficial
holders of DH's then-outstanding senior notes, the owners and lessors of the Roseton and part of the Danskammer facilities, and U.S. Bank, in its capacity as trustee under an
indenture governing certain lease certificates guaranteed by DH (the "Original Settlement Parties"). On May 30, 2012, the Original Settlement Parties, holders of a majority of DH's
then-outstanding subordinated notes, and, solely with respect to certain sections of the Settlement Agreement, Wells Fargo N.A., as successor trustee under the indenture governing DH's
subordinated notes, entered into an amended and restated settlement agreement (the "Settlement Agreement"). Pursuant to the terms of the Settlement Agreement, Dynegy and DH took certain steps towards
their emergence from Chapter 11 bankruptcy, including the DMG Acquisition described below and the filing of amendments to the Plan. In addition, parties to certain prepetition litigations (as
discussed in Note 17Commitments and ContingenciesLegal ProceedingsBondholder Litigation) and adversary proceedings (relating to the Roseton and Danskammer
facilities) filed stipulations of dismissals in their respective litigations or proceedings and certain intercompany receivables pursuant to an agreement by Dynegy to make payments to Dynegy Gas
Investments, LLC and a related DH promissory note were cancelled.

As
a result of the Settlement Agreement, we increased the estimated amount of the allowed claims against DH, Roseton and Danskammer related to the rejection of the leases for the Roseton
and Danskammer power generation facilities to approximately $695 million (inclusive of PSEG's $110 million allowed claim). We also reduced our previous estimate of the allowed claims
related to the Subordinated Capital Income Securities and related interest by approximately $161 million to $55 million.

DMG Acquisition.On June 5, 2012, pursuant to the Settlement Agreement, Dynegy and DH consummated the acquisition of DMG
(the "DMG
Acquisition"). The DMG Acquisition was accounted for as a business combination. Accordingly, the assets acquired and liabilities assumed were recognized at their fair value as of the acquisition date.

The
purchase price was approximately $466 million which was comprised of (i) approximately $402 million for the fair value of the Undertaking receivable, affiliate
that was extinguished in connection with the transaction and (ii) approximately $64 million for the fair value of the Administrative Claim issued to Dynegy in the DH Chapter 11
Cases. DH recorded an impairment expense of $832 million for the difference between the carrying value and the fair value of the Undertaking receivable, affiliate.

Merger.On September 30, 2012, DH merged with and into Dynegy with Dynegy continuing as the surviving legal entity of the
merger. Immediately
prior to the merger, Dynegy had no substantive operations, and therefore DH was considered the acquirer for accounting purposes. There was no consideration exchanged in the transaction and Dynegy, as
the accounting acquiree, did not meet the definition of a business; therefore, we accounted for the acquisition of Dynegy as a "recapitalization." Under this method of accounting, the net assets of
$54 million contributed by Dynegy were credited directly to stockholder's equity. Furthermore, the surviving legal entity's historical results for periods prior to the Merger are the same as
DH's historical results.

F-62

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Table of Contents

DYNEGY HOLDINGS, LLC

(A LIMITED LIABILITY COMPANY)

DEBTOR-IN-POSSESSION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(RESTATED)

Note 20Subsequent Events (Unaudited) (Continued)

Emergence.On October 1, 2012 (the "Effective Date"), we consummated our reorganization under Chapter 11 pursuant to
the Plan and
exited bankruptcy. On the Effective Date:



On
the Effective Date, and pursuant to the Plan, outstanding obligations of approximately $4 billion in aggregate principal amount, were cancelled. Additionally, all of DH's
obligations with respect to the leases of the Facilities were cancelled. Upon emergence, we will apply fresh start accounting to our consolidated financial statements because (i) the
reorganization value of the assets of the emerging entity immediately before the date of confirmation was less than the total of all post-petition liabilities and allowed claims and
(ii) the holders of the existing voting shares of the predecessor's common stock immediately before confirmation received less than 50 percent of the voting shares of the emerging
entity.

The
DNE Entities remain in Chapter 11 bankruptcy and continue to operate their businesses as "debtors-in-possession." Therefore, on the Effective Date, we
deconsolidated the DNE Entities.

F-63

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