Exhibit 99.3

EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Combined Financial Statements

As of December 31, 2013, 2012 and 2011, and for the years then ended

EQUIPOWER RESOURCES CORP. AND SUBSIDIARIES AND BRAYTON POINT HOLDINGS, LLC AND SUBSIDIARY

TABLE OF CONTENTS

Independent Auditors’ Report

We have audited the accompanying combined financial statements of Equipower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary (both of which are under common ownership and common management) which comprise the combined balance sheets as of December 31, 2013, 2012 and 2011, and the related combined statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes to the combined financial statements.

Management’s Responsibility for the Combined Financial Statements

Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the combined financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Equipower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary as of December 31, 2013, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 21, Equipower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary has been sold to Dynegy Inc. Our opinion is not modified with respect to this matter.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

September 26, 2014

COMBINED EQUIPOWER RESOURCES CORP. AND SUBSIDIARIES AND BRAYTON POINT HOLDINGS, LLC AND SUBSIDIARY

COMBINED BALANCE SHEETS

DECEMBER 31, 2013, 2012 AND 2011

(in thousands of dollars, except shares and par value data)

The accompanying notes are an integral part of these combined financial statements.

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COMBINED EQUIPOWER RESOURCES CORP. AND SUBSIDIARIES AND BRAYTON POINT HOLDINGS, LLC AND SUBSIDIARY

COMBINED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(in thousands of dollars)

The accompanying notes are an integral part of these combined financial statements.

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COMBINED EQUIPOWER RESOURCES CORP. AND SUBSIDIARIES AND BRAYTON POINT HOLDINGS, LLC AND SUBSIDIARY

STATEMENTS OF COMBINED STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(in thousands of dollars)

The accompanying notes are an integral part of these combined financial statements.

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COMBINED EQUIPOWER RESOURCES CORP. AND SUBSIDIARIES AND BRAYTON POINT HOLDINGS, LLC AND SUBSIDIARY

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(in thousands of dollars)

The accompanying notes are an integral part of these combined financial statements.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

1.                                      Organization and Operations

Headquartered in Hartford, Connecticut, EquiPower Resources Corp. and its subsidiaries, and Brayton Point Holdings, LLC and its subsidiary (combined, “we,” “our,” “us,” “EquiPower” or the “Company”) is an Independent Power Producer (“IPP”).  We own and operate nine power generation assets and hold an equity method investment in one power generation asset. Our assets are located across five states in the Northeast, Mid-Atlantic and Mid-Continental United States. Our facilities are geographically dispersed across two competitive, segmented power markets: ISO-New England Inc. (“ISO-NE”) and PJM Interconnection, L.L.C. (“PJM”). We are indirectly owned by funds controlled by Energy Capital Partners II, LP (“ECP II”), a private equity fund.

We are a wholesale provider of power to utilities, independent electric system operators, industrial or agricultural companies, retail power providers, municipalities, and power marketers. We provide capacity for sale to utilities, independent electric system operators, and retail power providers. We also provide ancillary service products to wholesale power markets.

Our fleet is comprised of five combined cycle gas turbine facilities: Milford Generating Station (“Milford”), Lake Road Generating Station (“Lake Road”), Dighton Generating Station (“Dighton”), and MASSPOWER Generating Station (“MASSPOWER”) in ISO-NE; and Liberty Generating Station (“Liberty”) in PJM; two gas and oil-fired peaking facilities in PJM (Richland and Stryker Generating Stations (collectively, “Richland and Stryker”)); Kincaid Generating Station, a coal-fired facility in PJM (“Kincaid”); and, Brayton Point Generating Station (“Brayton Point”), a coal facility in ISO-NE. We also hold an equity interest in Elwood Generating Station (“Elwood”), a natural gas-fired peaking facility in PJM.  These Combined Financial Statements include the effects of acquisitions completed as part of our operations in 2011 and 2013 (see Note 3, Acquisitions).

2.                                      Significant Accounting Policies and Recent Pronouncements

Basis of Presentation and Principles of Consolidation

Our Combined Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and include the accounts of both EquiPower Resources Corp. and subsidiaries and Brayton Point Holdings, LLC and its subsidiary.  Brayton Point Holdings, LLC and its subsidiary are entities under common control and common management with EquiPower Resources Corp. and its subsidiaries.  These Combined Financial Statements include all majority-owned subsidiaries.  All intercompany transactions have been eliminated in consolidation and combination.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of these Combined Financial Statements and the reported amounts of revenues and expenses during the reporting period.  In recording transactions and balances resulting from business operations, we use estimates based on the best information available. Estimates are used for such items including, but not limited to, plant depreciable lives, tax provisions, uncollectible accounts, valuation of both energy commodity and interest rate swap contracts, environmental liabilities, legal costs incurred in connection with recorded loss contingencies, and assets acquired and liabilities assumed in business combinations. In addition, estimates are used to test both long-lived assets and goodwill for impairment, and to determine the fair value of impaired assets, if any impairment exists. As better information becomes available or actual amounts become determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any characteristics of a controlling financial interest.  An enterprise that has a controlling financial interest in a VIE is known as the VIE’s

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

primary beneficiary, and is required to consolidate the VIE.  In determining whether consolidation of a particular entity is required, we first evaluate whether the entity is a VIE.  If the entity is determined to be a VIE, we use a qualitative approach to determine if we are a primary beneficiary of the VIE.

To determine whether we are the primary beneficiary of any VIEs, we assess whether we absorb any of the VIE’s expected losses or receive any portion of the VIE’s expected residual returns under the terms of the applicable agreement, analyze the variability in the VIE’s gross margin, and consider whether we had any decision-making rights associated with the activities that are most significant to the VIE’s performance.  We determined that we did not have any VIEs of which we were a primary beneficiary and thus required to consolidate at either December 31, 2013, 2012 or 2011.

Investments Accounted for by the Equity Method

We apply the equity method of accounting to investments in affiliates because the ownership structure prevents us from exercising a controlling influence over the operating and financial policies of the projects.  Under this method, equity in pre-tax income or loss of our equity method investments is reflected as equity earnings (loss) in affiliates within both the Combined Statements of Operations and Combined Statements of Cash Flows (see Note 4, Equity Method Investments).

Business Combinations

We apply business combination accounting to recognize and measure in our financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at fair value at the acquisition date. We also recognize and measure either goodwill or a gain from a bargain purchase in the business combination and determine what information to disclose to enable users of our financial statements to evaluate the nature and financial effects of our business combinations. Transaction costs are expensed as incurred.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Our First Lien Credit and Guaranty Agreement (the “First Lien Facility”) requires us to establish and maintain segregated cash accounts, which have been pledged as security in favor of the lenders.  As of December 31, 2013, 2012 and 2011, we had cash and cash equivalents of $50.9 million, $21.4 million and $50.8 million, respectively, of which $3.2 million, $8.1 million and $46.1 million, respectively, were subject to our First Lien Facility, Credit and Guaranty Agreement - Term Loan Facility or Liberty’s Term Loan Facility (see Note 15, Debt).

Restricted Cash

Restricted cash primarily represents amounts restricted in accordance with our financing facilities (see Note 15, Debt) utilized to collateralize outstanding letters of credit and the sum of the reasonably anticipated scheduled principal, interest and fees payable during the following six months required to be held in a Debt Service Reserve cash account in accordance with the First Lien Credit and Guaranty Agreement, the Second Lien Credit and Guaranty Agreement and Liberty’s Term Loan Facility. In addition, in 2011, we had restricted cash to fund major maintenance activities. Funds that can be used to satisfy obligations due during the next 12 months are classified as current restricted cash, with the remainder classified as non-current restricted cash. Restricted cash is generally invested in accounts earning market rates. Such cash is excluded from cash and cash equivalents on both our Combined Balance Sheets and Combined Statements of Cash Flows. As of December 31, 2013 and 2012, we classify all restricted cash as current assets. As of December 31, 2011, $32.9 million was classified as a current asset, while $18.4 million was classified as a non-current asset.

Special Deposits

Special deposits represent cash margin deposits posted with a clearing broker to support commodity hedging transactions, cash deposits used as collateral for activities associated with ISO-NE, cash deposits with natural gas pipeline companies used as collateral for gas transportation agreements as well as other miscellaneous deposits.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

Deposits that can be used to satisfy obligations due during the next 12 months are classified as current special deposits, with the remainder classified as non-current special deposits. As of December 31, 2013, 2012 and 2011, we classify all special deposits as current assets.

Accounts Receivable, net of Allowance

Our accounts receivable are primarily from purchasers of electricity, capacity, and ancillary services produced by our power generation assets as well as settlements of commodity hedge transactions. We record accounts receivable at net realizable value upon delivery of electricity, capacity, and ancillary services as well as the settlement of commodity derivative transactions. We review collectability and establish appropriate provisions on accounts receivable if it is probable we will be unable to collect all or a portion of the outstanding balance. We use our best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including but not limited to, the length of time receivables are past due, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of any customer’s inability to meet its financial obligations. We review the adequacy of our allowances quarterly.

Inventories

Inventories primarily consist of coal and fuel oil used to generate power and materials and supplies used to maintain our power generation facilities. Inventories are carried at the lower of cost or market. Cost is the sum of the purchase price and incidental expenditures to bring the inventory to its existing condition and location. Cost is determined under the weighted average cost method. We reduce cost to market value if the market value of inventory has declined and it is probable that the inventory, in its use in the ordinary course of business, will not be fully recovered through revenue earned from the resulting generation of power.  Inventories are shown net of reserves, if any, on the Combined Balance Sheets.

Inventories on consignment primarily consist of coal and fuel oil used to generate power at Brayton Point which is financed under an inventory financing arrangement (see Note 13, Commitments and Contingencies and Note 15, Debt).  We record inventories on consignment at the price paid to the supplier, plus incidental expenses and transportation charges to bring the inventory to its existing location. We record inventories on consignment within inventories on the Combined Balance Sheets.  Upon utilizing this coal and fuel oil, we record the usage of coal and fuel oil at its weighted average cost in energy and fuel costs on the Combined Statements of Operations.

Derivative Accounting

We are exposed to market risk, including changes in interest rates, and the impact of market price fluctuations for electricity, natural gas, coal, fuel oil and emissions allowances (see Note 12, Derivative Instruments).  In order to manage these risks, we use energy commodity and interest rate contracts that typically provide for settlement in cash.

The accounting treatment for energy commodity and interest rate contracts depends on the intended use of the particular contract and on whether or not the contract meets the definition of a derivative.  Non-derivative contracts are recorded at the time of delivery on an accrual basis of accounting.  Derivative transactions are recorded at fair value.  Derivative accounting is complex and requires management judgment in the following respects: identification of derivatives and embedded derivatives, determination of the fair value of derivatives, identification of hedge relationships, assessment and measurement of hedge effectiveness, and, election and designation of the normal purchase, normal sales exception.  Depending upon their timing and effects, our judgments may have a significant impact on our results from operations.

Contracts that meet the definition of a derivative but are either not designated or do not meet the requirements for cash flow hedge or normal purchase or normal sale accounting are recorded at fair value, with changes in fair value recognized currently in earnings.  We record these derivative contracts at fair value in the Combined Balance Sheets within mark-to-market derivative assets and liabilities.  Changes in fair value of these commodity transactions are recognized on a net basis in operating revenues on the Combined Statements of Operations.  For those contracts that meet the definition of a derivative, are designated as cash flow hedges and meet the cash flow hedge requirements, the changes in the fair value of the effective portion of those contracts are recognized in accumulated other comprehensive

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

income.  For the years ended December 31, 2013, 2012 and 2011, we did not have any contracts designated as cash flow hedges.  For those contracts that meet the normal purchase, normal sales exception, and are so designated, changes in the fair value of those contracts are not recognized in earnings.  Instead, earnings impacts are recorded upon delivery on an accrual basis of accounting.

Fair Value Measurements

We apply fair value measurement guidance to all financial instruments, including derivative contracts and other financial instruments requiring fair value disclosures.  Fair value is defined as 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 in a principal or most advantageous market. Fair value is a market based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets and liabilities. These inputs can be readily observable, market corroborated or generally unobservable firm inputs.  We often make certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the valuation techniques.

Fair Value Hierarchy — In measuring fair value, we use observable market data when available and minimize the use of unobservable inputs.  Unobservable inputs are needed to value certain derivative contracts due to complexities in contract terms.  Inputs used in fair value measurements are categorized into three fair value hierarchy levels for disclosure purposes.  The entire fair value measurement is categorized based on the lowest level of input that is significant to the fair value measurement.  The three levels of the fair value hierarchy are:

Level 1 — Quoted prices (unadjusted) are available in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions for the asset or liability occur with both sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Pricing inputs are quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 — Pricing inputs including significant inputs that are generally less observable or from unobservable sources. These inputs may be used with internally developed methodologies that result in our best estimate of fair value.

Determination of Fair Value — The valuation techniques and inputs used in our fair value measurements are described in Note 11, Assets and Liabilities with Recurring Fair Value Measurements and Note 12, Derivative Instruments.

Deferred Option Premiums

Deferred option premiums represent costs incurred with the restructuring of certain economic commodity hedges (see Note 15, Debt).  Deferred option premiums are amortized on a shaped basis over the life of the transactions through December 31, 2014.  For the years ended December 31, 2013, 2012 and 2011, we recorded expense of $30.2 million,  $11.8 million and zero, respectively, related to our deferred option premiums within operating revenues on the Combined Statements of Operations.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

Property, Plant and Equipment, net, and Depreciation

Property, plant and equipment, net is recorded at depreciated cost. Significant additions or improvements that improve the assets or that extend asset useful lives are capitalized as incurred, while repairs and maintenance that do not improve or extend the life of the respective asset are charged to expense as incurred.  We calculate depreciation using the straight-line method over the estimated remaining useful lives of the related assets. Land is carried at cost and is not subject to depreciation. Capital spares are also included within property, plant and equipment, net on the Combined Balance Sheets.  Gains and losses resulting from sales or retirements of assets are included within depreciation and amortization on the Combined Statements of Operations.

Goodwill and Goodwill Impairment

We recognize goodwill when the purchase price of an acquired entity exceeds the fair value assigned to assets acquired less liabilities assumed. We perform goodwill impairment tests annually and when events or changes in circumstances indicate that the carrying value may not be recoverable. In the absence of sufficient qualitative factors, goodwill impairment is determined using a two-step process:

We did not record any goodwill impairments for the years ended December 31, 2013, 2012 or 2011 (see Note 9, Goodwill).

Emission Allowances

Our emission allowances consist of Regional Greenhouse Gas Initiative (“RGGI”) emission allowances, sulfur dioxide (“SO2”) and nitrous oxide (“NOx”) emission allowances.  Amortization of RGGI, SO2 and NOx allowances occurs as natural gas, coal and fuel oil are consumed and related emissions are emitted into the air.

Emission allowances permit the holder of the allowances to emit certain gaseous by-products of fossil fuel combustion, including RGGI, SO2 and NOx.  We are also responsible for complying with both SO2 and NOx emission regulations and are entitled to all SO2 and NOx allowances issued by the Environmental Protection Agency (“EPA”) for our facilities.  Allowances are typically consumed as we generate these emissions. In addition, the allowances may be transacted and sold to third parties.  Carrying amounts are based on the cost to acquire the allowances. If acquired in an acquisition, the allowances are carried at the fair value on the date of acquisition. If the allowances are issued directly by the EPA, they are carried at zero cost. Generally, the allowances are consumed in the period the emissions are generated and are amortized accordingly at their weighted average cost.  The amortization of the allowances is recorded within energy and fuel costs on the Combined Statements of Operations.  Purchases of emission allowances and related amortization expenses are shown as operating activities within the Combined Statements of Cash Flows (see Note 10, Emission Allowances).

Impairment of Long-Lived Assets

We evaluate our long-lived assets, such as property, plant and equipment, equity method investments and definite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Equipment assigned to each of our operating assets is not evaluated for impairment separately; instead, we evaluate our operating assets and related equipment together. In addition, we evaluate our equity method investments to determine whether or not they are impaired when a decline in value is considered an other than temporary decline in value. When we believe an impairment condition exists, we estimate the

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Notes to the Combined Financial Statements

undiscounted future cash flows associated with the long-lived asset or group of long-lived assets at the lowest level for which independent and identifiable cash flows exist. If we determine that these undiscounted cash flows are less than the carrying amount of the associated asset, or if we have classified an asset as held for sale, we estimate fair value of the long-lived asset based on its discounted cash flows to determine the amount of any impairment expense. All construction work in progress is reviewed for impairment whenever there is an indication that there may have been a reduction in fair value. If we determine that a construction work in progress is no longer probable of completion, and the capitalized costs will not be recovered through future operations, we write down the carrying value of the project to its fair value.

To estimate future cash flows, we consider historical cash flows, existing and future contracts, changes in the market environment and other factors that may affect future cash flows. To the extent applicable, the assumptions we use are consistent with our forecasts, which involve inherent uncertainty. We use our best estimates in making these evaluations and consider various factors, including both forward price curves for power and fuel costs and forecasted operating costs; however, actual future market prices and project costs could vary from the assumptions used in our estimates, and the impact of such variations may be material.

Generally, fair value will be determined using valuation techniques such as the present value of expected future cash flows. We will discount the estimated future cash flows associated with the asset using a single interest rate representative of the risk involved with such an investment including contract terms, tenor and credit risk of counterparties. We may also consider prices of similar assets, consult with brokers, or employ other valuation techniques. We use our best estimates in making these evaluations and consider various factors, including forward price curves for power and fuel costs and forecasted operating costs. Actual future market prices and project costs may vary from the assumptions used in our estimates and the impact of such variations may be material.

We did not record any impairment charges for the years ended December 31, 2013, 2012 or 2011.

Deferred Financing Costs, net

Our deferred financing costs incurred in connection with the issuance of debt are deferred and amortized over the life of the debt using the effective interest rate method. However, when the timing of debt transactions involve contemporaneous exchanges of cash between us and the same creditor(s) in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation, deferred financing costs are accounted as an extinguishment or modification depending on the significance of changes to the future cash flows. These debt transactions require us to either write-off the original deferred financing costs and capitalize the new issuance costs, or continue to amortize the original deferred financing costs and immediately expense the new issuance costs.  We include amortization of deferred financing costs in interest and fees on debt within the Combined Statements of Operations.

The following table summarizes the amounts recognized related to deferred financing costs as of December 31, 2013, 2012 and 2011, respectively (see Note 15, Debt):

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

Prepaid Major Maintenance

We have entered into long-term service agreements (“LTSAs”) for certain maintenance activities at several of our facilities.  These LTSAs allow us to receive technical advice in the performance of all scheduled outages including technical field assistance with respect to our gas turbines, developing the critical-path schedule for inspections, and coordinating the repair, replacement and reconditioning of all hot gas path parts.  Additionally, these LTSAs cover the cost of new or fully refurbished replacement hot gas path parts for scheduled outages.  Payments are generally made monthly and include both a fixed fee and a variable fee based on equivalent operating hours, calculated based on factored fired hours and/or factored fired starts on each gas turbine; these fees escalate annually.  We expense the fixed fees within operations and maintenance in the Combined Statements of Operations.  For the years ended December 31, 2013 and 2012, we expensed $1.7 million and $1.3 million relating to the fixed fees, respectively.  The variable fee component is capitalized to prepaid major maintenance and reclassified, as scheduled outages occur, to property, plant and equipment in the Combined Balance Sheets.

The following table summarizes the prepaid major maintenance activity in the Combined Balance Sheets as of December 31, 2013 and 2012, respectively:

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities represent amounts owed to vendors, including settlement of commodity hedge transactions, employee related amounts, and other accrued liabilities incurred in the ordinary course of operations, and are recorded at historical cost on the Combined Balance Sheets.

Asset Retirement Obligations

We record all known asset retirement obligations for which we can reasonably estimate the fair value of the liability. We associate retirement obligations with long-lived assets for which a legal obligation exists under enacted laws, statutes and written or oral contracts, including obligations arising under the contracts, and for which the timing and/or method of settlement may be conditioned on a future event.

Our legal obligations associated with the retirement of long-lived assets are recognized at their estimated fair value at the time that the obligations are incurred.  We estimate the liability based on the expected future costs for retiring the asset, discounted using a credit-adjusted risk-free rate on the date the obligation is incurred.  Upon initial recognition of a liability, the cost is typically capitalized as part of the associated long-lived asset and depreciated using a straight-line basis over the life of the related assets within depreciation and amortization on the Combined Statements of Operations (see Note 14, Asset Retirement Obligations).  Accretion expense in connection with the discounted liability is recognized over the remaining period of the obligation in depreciation and amortization on the Combined Statements of Operations.  Revisions to the liability could occur due to changes in the estimates of these costs.  Estimates of future asset retirement obligations are based on projected future retirement costs and require management to exercise significant judgment.  Such estimated costs could differ significantly when the actual costs are incurred.

Operating Revenues

We record operating revenues on an accrual basis as electricity, capacity and ancillary services are delivered, as well as the settlement of commodity derivative transactions. Our operating revenues are comprised of fixed capacity payments, which are primarily received from both PJM and ISO-NE capacity auctions, variable energy payments for power generation, certain ancillary service revenues, realized settlements from our economic hedging and optimization activities as well as unrealized mark-to-market revenues from derivative instruments as a result of our

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Notes to the Combined Financial Statements

economic hedging and optimization activities and other service revenues. Revenues include estimated amounts not yet received.

Energy and Fuel Costs

Energy and fuel costs expense is comprised of the cost of coal, natural gas and fuel oil purchased from third parties for the purposes of consumption in our power plants to generate electricity, RGGI, SO2, and NOx amortization and certain fixed and variable costs directly attributable to cost of generation.

Share-Based Payments and Deferred Compensation Plans

We apply stock compensation accounting for our share-based payments (see Note 17, Share-Based Payments). The fair value of each of the non-qualified stock options is estimated on the date of the grant using the Black-Scholes option-pricing model. We recognize compensation expense on a straight-line basis over the requisite vesting period for the entire award.  Upon the closing of the sale (considered a change of control) of the Company (see Note 21, Subsequent Events), all issued and outstanding non-qualified stock options will immediately vest. The payments will effectively be made by the ECP II and will not become an obligation of the purchaser.

On September 24, 2013, Brayton Point Holdings, LLC (“Brayton Point Holdings”), at the time a wholly-owned subsidiary of ECP II, awarded certain members of management non-voting membership interests in Brayton Point Holdings. These membership interests include both a deferred compensation component and a share-based compensation component, and vest on each of the first, second, and third anniversaries of the initial grant date, and vest in their entirety upon a change in control of Brayton Point Holdings. To the extent that cash distributions from the Brayton Point facility in excess of the amount of capital invested by ECP II in Brayton Point are declared (“Distributions”), employees participate in additional cash distributions subject to the vesting requirements.

We account for Distributions made in accordance with the awards as deferred compensation. Upon declaration of a Distribution, we recognize compensation expense for the portion of the Distribution which has already vested and recognize compensation expense for the remaining portion of the Distribution on a pro rata basis over the remaining vesting period. During the year ended December 31, 2013, no Distributions were made to which the holders of the awards were entitled. In addition, we recognized no compensation expense related to these awards for the year ended December 31, 2013.

Upon the closing of the sale (considered a change of control) of the Company (see Note 21, Subsequent Events), all issued and outstanding membership interests will immediately vest. The payments will effectively be made by the ECP II and will not become an obligation of the purchaser.

Post-employment Benefit Plans

Our employees participate in various 401(k) plans.  These plans provide for both employer and employee contributions up to specified limits.  For most of the plans, we make a fully vested safe harbor match equal to 100% of each participant’s elective deferral contribution up to a maximum of 3% of eligible compensation, plus 50% of each participant’s elective deferral contribution that exceeded 3%, up to 6% of eligible compensation for the majority of the plans.  The 401(k) plan matching contribution expenses were $1.6 million, $0.7 million and $0.3 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are included within operations and maintenance on the Combined Statements of Operations.

In addition, we may make discretionary profit-sharing contributions at the discretion of our Board of Directors as well as certain additional required contributions. Profit sharing contributions are generally subject to a three year cliff-vesting schedule based on service with us and certain predecessors.  For most of the plans, the discretionary profit-sharing contribution is up to 5% of compensation per year. The profit sharing and additional contribution expenses were $1.1 million, $1.1 million and $0.6 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are included within operations and maintenance on the Combined Statements of Operations.

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Notes to the Combined Financial Statements

Unrealized and Realized Revenues from Commodity Derivative Instruments

Unrealized Commodity Derivative Instruments Mark-to-Market Gain (Loss) — The changes in the unrealized mark-to-market value and the associated roll-off of all commodity derivative instruments and contracts are primarily reflected on a net basis within operating revenues on the Combined Statements of Operations. Our mark-to-market on derivative commodity contracts include positions being used to economically hedge commodity price risk associated with various commodities such as power, natural gas, fuel oil, and coal.

Realized Settlements of Commodity Derivative Instruments — The realized value of all derivative commodity contracts are reflected on a net basis and included in operating revenues on the Combined Statements of Operations.

Income Taxes

We account for income taxes using the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities, and their respective tax basis, tax credit and net operating loss (“NOL”) carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit or expense that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. We reverse a previously recognized tax position in the first period in which it is no longer more likely than not that the tax position would be sustained upon examination (see Note 18, Income Taxes).

Concentrations of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of accounts receivable and derivative financial instruments. Accounts receivable are concentrated with entities engaged in the energy and the financial services industries. These industry concentrations may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic, industry or other conditions.  We are exposed to credit losses in the event of noncompliance by counterparties on both the settlement of physical sales and derivative financial instruments. The counterparties to these transactions are major financial institutions, energy companies, ISO-NE and PJM. We determine collateral requirements to support financial instrument credit risk on a case by case basis (see Note 19, Concentration Risks).

Recent Accounting Pronouncements

Revenue from Contracts with Customers — In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers.”  The update requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.  This pronouncement is effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period, and is to be applied retrospectively.  We are currently assessing the future impact of this update on our financial condition, results of operations or cash flows.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity — In April 2014, the FASB issued Accounting Standards Update No. 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. We are currently assessing the future impact of this update on our financial condition, results of operations or cash flows.

Income Taxes — In July 2013, the FASB issued Accounting Standards Update 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.”  The provisions of the rule require an unrecognized tax benefit or expense to be presented as a reduction to a deferred tax asset in the financial statements for an NOL carryforward, a similar tax loss, or a tax credit carryforward except in circumstances when the carryforward or tax loss is not available at the reporting date under the tax laws of the applicable jurisdiction to settle any additional income taxes or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purposes. When those circumstances exist, the unrecognized tax benefit or expense should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The new financial statement presentation provisions relating to this update are prospective and effective for interim and annual periods beginning after December 15, 2013, with early adoption permitted. We are currently assessing the future impact of this update, but we do not anticipate a material impact on our financial condition, results of operations or cash flows.

Disclosures about Offsetting Assets and Liabilities — In December 2011, the FASB issued Accounting Standards Update 2011-11, “Balance Sheet - Disclosures about Offsetting Assets and Liabilities,” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity’s balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the balance sheets when the right of offset exists or that are subject to an enforceable master netting arrangement. In January 2013, the FASB issued Accounting Standards Update 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities” to provide clarification that the scope previously defined in Accounting Standards Update 2011-11 applies to derivatives, repurchase agreements, reverse repurchase agreements and securities borrowing and lending transactions that are subject to an enforceable master netting arrangement or similar agreement. The new disclosure requirements relating to these updates are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. We adopted Accounting Standards Updates 2011-11 and 2013-01 as of January 1, 2013. As these updates only required additional disclosures, adoption of these standards did not have a material impact on our financial condition, results of operations or cash flows.

3.                                      Acquisitions

Acquisition of Milford

On January 20, 2011, we purchased 100 percent of the direct and indirect interests in the owners of Milford for $332 million plus certain working capital balances of $13.1 million.  Prior to the acquisition, on January 19, 2011, we received a $324.0 million short-term loan from a revolving facility controlled by ECP II in order to fund the acquisition.  On January 28, 2011, Holdings entered into a Credit and Guaranty Agreement which consisted of a $425.0 million term loan facility and a $100.0 million working capital facility.  The term loan facility was used to repay the revolving loan, to pay other fees and expenses related to the financing and acquisition and to make a preferred stock distribution (see Note 15, Debt and Note 16, Capital Structure).

We accounted for this transaction using the acquisition method of accounting, whereby the purchase cost has been allocated to the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed.  The purchase price has been allocated to the purchased assets and assumed liabilities at estimated fair values as determined by management with the assistance of a third party.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

Acquisition of Liberty

On October 7, 2011, we acquired 100 percent of the equity interests in Liberty Electric Generation Holdings, LLC (including Liberty) for $156 million plus certain working capital balances of $46.9 million as well as the assumption of $375.7 million of debt (see Note 15, Debt).  Prior to the acquisition, on October 6, 2011, we received a $201.0 million short-term loan from a revolving facility controlled by ECP II in order to fund the acquisition. On October 25, 2011, we received a $204.9 million capital contribution from the funds controlled by ECP II to repay the short-term loan and to pay other fees and expenses related to the acquisition (See Note 16, Capital Structure). In addition, we contributed $1.9 million of cash on hand to fund the acquisition.

We accounted for this transaction using the acquisition method of accounting, whereby the purchase cost has been allocated to the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed.  The purchase price has been allocated to the purchased assets and assumed liabilities at estimated fair values as determined by management with the assistance of a third party.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

Acquisition of Kincaid and Elwood

On August 29, 2013, our wholly-owned subsidiary Tomcat Power, LLC (“Tomcat Power”) acquired all of the direct and indirect ownership interests of Kincaid Holdings, LLC, Kincaid Generation, LLC (“Kincaid”) and Kincaid Energy Services Company, LLC, Elwood Expansion Holdings, LLC, Elwood Energy Holdings, LLC (“Elwood”), and Elwood Services Company, LLC, 50.00 percent of the interest in Elwood Expansion, LLC and 49.50 percent of the interest in Elwood Energy, LLC (“Elwood Energy”), respectively, from Dominion Energy, Inc. (collectively referred to as “Kincaid and Elwood”) for $472.4 million less certain adjustments for working capital balances and other purchase price adjustments of negative $13.5 million.  Kincaid owns 1,108 megawatts (“MW”) of generation located in Kincaid, Illinois, and Elwood owns 1,560 MW in total of generation located in Elwood, Illinois (see Note 4, Equity Method Investments).  We received a $110.0 million equity contribution from ECP II in order to partially fund this acquisition.  Also on August 29, 2013, we entered into the Third Amendment to the First Lien Credit and Guaranty Agreement (the “Third Amendment”), which primarily consisted of a $685.0 million Term C loan facility and an additional $46.0 million working capital facility.  The Term C loan facility was used to fund this acquisition, to repay the Second Lien Facility, to cash collateralize certain letters of credit issued and to pay other fees and expenses related to the Third Amendment and this acquisition (see Note 15, Debt).

We accounted for this transaction using the acquisition method of accounting, whereby the purchase cost has been allocated to the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed.  The purchase price has been allocated to the purchased assets and assumed liabilities at estimated fair values as determined by management with the assistance of a third party.

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EquiPower Resources Corp. and Subsidiaries and Brayton Point Holdings, LLC and Subsidiary

Notes to the Combined Financial Statements

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of this acquisition: