News Releases

Vistra Reports Third Quarter 2021 Results and Announces Additional Long-Term Capital Allocation Plan Details

IRVING, Texas, Nov. 5, 2021 /PRNewswire/ -- Vistra (NYSE: VST)

Returning Capital to Financial Stakeholders

  • Announced plans to return at least $7.5 billion to common stockholders through year-end 2026, reflecting an average annual ~15% cash yield on the stock at the current stock price, via a combination of share repurchases and dividends, with plans to retire at least $1.5 billion of debt by year-end 20221:

Share Repurchases

-   Announced, in October, a $2 billion share repurchase program, which is sized at over 20% of the company's current market cap and is expected to be executed by year-end 2022. The share repurchase program is partially funded by $1 billion of preferred equity raised in October.
-   Vistra expects it will opportunistically repurchase another ~$4 billion of common stock between 2023 and 2026, so long as the company believes its stock is undervalued.
-   In total, this five-year allocation to share repurchases represents >60% of the company's current market capitalization.

Dividends

-   Announced an updated dividend policy pursuant to which Vistra expects to commit $300 million2 annually toward its common dividend program, totaling $1.5 billion over the five-year period.
-   Assuming $6 billion of share repurchases executed at Vistra's current stock price3, Vistra's annualized dividend per share would grow by ~175% by year-end 2026.

Debt Repayments

-   Reaffirmed its commitment to a strong balance sheet, announcing plans to retire ~$1.5 billion of debt by year-end 20221 with plans for up to $3 billion of debt repayments by year-end 20261.

Financial Highlights

  • Delivered third quarter 2021 Net Income of $10 million and Net Income from Ongoing Operations4 of $16 million. Third quarter 2021 Ongoing Operations Adjusted EBITDA4 was $1,177 million. Excluding the Winter Storm Uri (Uri) impacts, Vistra's Ongoing Operations Adjusted EBITDA, excluding Uri4,5, was $1,167 million.
  • Raised and narrowed 2021 Ongoing Operations Adjusted EBITDA4 guidance range to $1,890 to $2,090 million and revised and narrowed Ongoing Operations Adjusted Free Cash Flow before Growth4 (FCFbG) guidance range to $100 to $300 million. The Ongoing Operations Adjusted EBITDA guidance range includes ~$500 million6 from ERCOT's securitization of certain Uri-related costs borne by load-serving entities, which partially offsets the retail portion of the greater than $2 billion financial loss Vistra recorded in the first quarter of 2021. The cash impact of the securitization is reflected in Vistra's 2022 Adjusted FCFbG guidance range, which is the year in which the company expects to receive the cash proceeds.
  • Initiated 2022 Ongoing Operations Adjusted EBITDA4 and Ongoing Operations Adjusted Free Cash Flow before Growth4 (FCFbG) guidance ranges of $2,810 to $3,310 million and $2,070 to $2,570 million, respectively, an expected Adjusted EBITDA to Adjusted FCFbG conversion of ~76%.
    • Vistra's 2022 guidance ranges include the negative impact of ~$185 million from bill credits applied to large commercial and industrial customers that curtailed during Uri and the negative impact of ~$55 million from the execution of NPV-positive, long-dated contracts with retail customers.
    • Excluding these impacts for an illustrative view of the long-term earnings power of the business, Vistra's 2022 Ongoing Operations Adjusted EBITDA4,7 guidance range would be $3,050 to $3,550 million.
  • Paid a quarterly dividend of $0.15 per share, or $0.60 per share on an annualized basis, on Sept. 30, 2021, to shareholders of record as of Sept. 16, 2021.

Winter Preparedness

  • Implemented a series of steps designed to significantly improve risk profile in the event of future weather-driven volatility events, including:
    • ­   Investing ~$80 million in the ERCOT fleet to further harden generation for cold temperatures and improve security of fuel.
    • ­   Added incremental gas storage capacity, as well as dual fuel capabilities at gas steam units.
    • ­   Revised risk management policy to reserve additional generation length as physical insurance leading into peak periods.
  • Continued participation with the PUCT and ERCOT to implement Texas legislation related to Uri and to evaluate potential ERCOT market reforms.

A Clean Energy Future

  • Acquired Angus Solar, LLC, owner of the 110-MW Angus solar development project located in Bosque County, Texas, from developer Cypress Creek. Angus, which is estimated to begin commercial operations by year-end 2023, joins the growing Vistra Zero portfolio of zero-carbon generation assets.
  • Announced the planned development of up to 300 MW of utility-scale solar and up to 125 MW of battery energy storage facilities at nine retired or to-be-retired Vistra coal plant sites across central and southern Illinois, supported by the passage of Illinois' landmark Energy Transition Act, which incorporated Vistra's legislative priority known as the Illinois Coal to Solar & Energy Storage Initiative.
  • Supported COP26 through committing to align emissions reduction targets to keep warming to 1.5°C and reaching science-based net-zero emissions by 2050, as promoted by Science Based Targets initiative's Business Ambition for 1.5°C, and encouraging governments and corporate leaders to set strong emissions reduction targets.

ESG Highlights

  • Honored with the Excellence in Surface Coal Mining Reclamation Award by the Office of Surface Mining Reclamation & Enforcement, a bureau of the U.S. Department of the Interior. The award recognizes companies that go beyond federal reclamation requirements to demonstrate their commitment to the environment.
  • Launched TXU Energy Freedom Rewards℠, a first-of-its-kind energy plan allowing customers to earn 30% in free electricity for every dollar spent on energy charges.
  • Encouraged Fortune 1000 CEOs to help advance disability inclusion and equality through Disability:IN's CEO letter campaign, while reinforcing Vistra's commitment to equality and inclusion at Vistra.
  • Incentivized COVID-19 vaccinations for employees through a vaccine sweepstakes where eight employees will win a cash prize, up to $50,000 each, for submitting proof of vaccination.

 

(1)

Corporate-level debt. Excludes potential future Vistra Zero project financing.

(2)

Based on management's recommendations; subject to Board's approval at the applicable time.

(3)

Assumes share price of $20 as of Nov. 1, 2021 close.

(4)

Excludes the Asset Closure segment. Net Income from Ongoing Operations, Ongoing Operations Adjusted EBITDA, Ongoing Operations Adjusted EBITDA, excluding Uri, Ongoing Operations Illustrative Adjusted EBITDA, Ongoing Operations Adjusted FCFbG, and Ongoing Operations Illustrative Adjusted FCFbG are non-GAAP financial measures. See the "Non-GAAP Reconciliation" tables for further detail.

(5)

Excludes net $10 million benefit related to Uri, including ERCOT resettlement and revenue true-up benefit of $43 million net of $(33) million of bill credits applied to large commercial and industrial customer bills that curtailed during Uri.

(6)

The amount of the securitization proceeds reflects management's estimate.  The final amount is expected to be determined in December 2021, and the payment of the proceeds will be subject to ERCOT's ability to secure the financing.  The Company currently expects the proceeds to be reflected in Ongoing Operations Adjusted EBITDA for the quarter ended Dec. 31, 2021.  The inclusion of the securitization proceeds in Ongoing Operations Adjusted EBITDA guidance is a non-GAAP determination at this time, reflecting management's view of the financial impact of securitization on operating results, which offsets a portion of the Uri-related retail costs incurred during the first quarter of 2021, and the representative period for which the proceeds relate. The GAAP measurement is still under review. Management expects the GAAP determination will be finalized prior to the filing of the company's 2021 Form 10-K.

(7)

Excludes ~$185 million impact from bill credits applied to large commercial and industrial customers that curtailed during Uri and ~$55 million impact from retail term contract backwardation. Provided for illustrative purposes only and should not be read or viewed as Vistra's actual 2022 guidance, which is also set forth above.

 

Summary of Financial Results for Third Quarter Ended Sept. 30, 2021



Three Months Ended


Nine Months Ended

($ in millions)


Sept. 30, 2021

Sept. 30, 2020


Sept. 30, 2021

Sept. 30, 20203

Net Income (Loss)


$ 10

$ 442


$ (1,781)

$ 651

Ongoing Operations Net Income (Loss)1


$ 16

$ 502


$ (1,761)

$ 740

Ongoing Operations Adjusted EBITDA1


$ 1,177

$ 1,183


$ 776

$ 2,963

      Excluding Uri1,2


$ 1,167



$ 2,811


 

Adjusted EBITDA by Segment







Retail


$ 65

$ (140)


$ 376

$ 572

Texas


$ 858

$ 972


$ (350)

$ 1,452

East


$ 193

$ 245


$ 573

$ 691

West


$ 36

$ 23


$ 81

$ 59

Sunset


$ 36

$ 93


$ 115

$ 209

Corp./Other


$ (11)

$ (10)


$ (19)

$ (20)

Asset Closure


$ (4)

$ (46)


$ (32)

$ (78)

For the three months ended Sept. 30, 2021, Vistra reported Net Income of $10 million, Net Income from Ongoing Operations1 of $16 million, and Ongoing Operations Adjusted EBITDA1 of $1,177 million. Vistra's third quarter 2021 Ongoing Operations Adjusted EBITDA, excluding Uri1,2, was $1,167 million. Vistra's third quarter 2021 Net Income was $432 million lower than third quarter 2020 Net Income, driven primarily by unrealized hedging losses.

Vistra reported third quarter Adjusted EBITDA from the Retail segment of $65 million, $205 million higher than third quarter 2020 results, driven by the execution of Vistra's self-help initiatives following Uri and lower cost of goods sold period-over-period. Third quarter Adjusted EBITDA from the generation4 segments, on an aggregate basis, totaled $1,112 million, $211 million lower than third quarter 2020 results, primarily driven by lower energy margin in Texas, East, and Sunset.

"Vistra's integrated operations continued to operate well following Winter Storm Uri, delivering third quarter financial results that are in-line with the prior period, and capturing approximately 85% of the company's $500 million self-help target as of Sept. 30, with a clear line of sight to the balance," said Curt Morgan, Vistra's chief executive officer. "We continue to believe in the long-term value of the company. Our strategic review process, which management and the board undertook in the first three quarters of 2021, has led us toward the execution of a capital allocation plan that is focused on maximizing the value of our business, growing our Vistra Zero portfolio via cost-effective capital, and prioritizing the return of capital to our financial stakeholders. The closing of our preferred equity offering and announcement of our near-term $2 billion share repurchase program is an exciting first step in the execution of this plan, with the very real prospect of repurchasing over 60% of our current market cap by year-end 2026 and returning an additional $1.5 billion to shareholders through common dividends over that same time period for a grand total of $7.5 billion. All in all, at our current share price, the expected repurchases and dividends are forecast to result in an average annual cash yield on our current stock price of an attractive 15%."

(1)

Excludes results from the Asset Closure segment. Net Income from Ongoing Operations, Ongoing Operations Adjusted EBITDA, and Ongoing Operations Adjusted EBITDA, excluding Uri, are non-GAAP financial measures. See the "Non-GAAP Reconciliation" tables for further details. Total by segment may not tie due to rounding.

(2)

Q3 2021 Excludes net $10 million benefit related to Uri, including ERCOT resettlement and revenue true-up benefit of $43 million net of $(33) million of bill credits applied to large commercial and industrial customer bills that curtailed during Uri. YTD 2021 excludes $2,035 million of Uri-related impacts.

(3)

Q3 2020 results decreased by $2 million and YTD 2020 results decreased by $1 million due to the recast of Wharton power plant, retired in 2020, to the Asset Closure segment.

(4)

Includes Texas, East, West, Sunset, and Corp./Other.

Guidance

($ in millions)

Prior 20212

Current 2021

2022

Illustrative 20223

Ongoing Ops. Adj. EBITDA1

1,475 – 1,875

1,890 – 2,090

$2,810 – $3,310

$3,050 – $3,550

Ongoing Ops. Adj. FCFbG1

200 – 600

100 – 300

$2,070 – $2,570

$1,810 – $2,310

Vistra is raising and narrowing its 2021 Ongoing Operations Adjusted EBITDA1 guidance range to $1,890 to $2,090 million and revising and narrowing its 2021 Ongoing Operations Adjusted FCFbG1 guidance range to $100 to $300 million.  Vistra's 2021 Ongoing Operations Adjusted EBITDA guidance range includes ~$500 million4 from ERCOT's securitization of certain Uri-related costs borne by load-serving entities, which partially offsets the retail portion of the greater than $2 billion financial loss Vistra recorded in the first quarter of 2021. Vistra expects to receive the ~$500 million of securitization proceeds in the first half of 2022. As a result, the cash flow impact of securitization is included in Vistra's 2022 Ongoing Operations Adjusted FCFbG guidance range.

Vistra is initiating its 2022 Ongoing Operations guidance ranges, forecasting Ongoing Operations Adjusted EBITDA1 of $2,810 to $3,310 million and Ongoing Operations Adjusted FCFbG1 of $2,070 to $2,570 million, an expected Adjusted EBITDA to Adjusted FCFbG conversion of ~76%. Vistra's 2022 guidance ranges include the negative impact of ~$185 million from bill credits applied to large commercial and industrial customers that curtailed during Uri and the negative impact of ~$55 million from the execution of NPV-positive, long-dated contracts with retail customers that will contribute positive EBITDA in future years. Excluding these impacts, which is reflective of the long-term earnings power of the business, Vistra's Ongoing Operations Illustrative Adjusted EBITDA1,3 guidance range is $3,050 to $3,550 million.

(1)

Excludes the Asset Closure segment. Ongoing Operations Adjusted EBITDA, Ongoing Operations Illustrative Adjusted EBITDA, Ongoing Operations Adjusted FCFbG, and Ongoing Operations Illustrative Adjusted FCFbG are non-GAAP financial measures. See the "Non-GAAP Reconciliation" tables for further detail.

(2)

As issued on April 26, 2021.

(3)

Illustrative Adj. EBITDA and Illustrative Adj. FCFbG exclude ~$185 million impact from bill credits applied to large commercial and industrial customer bills that curtailed during Uri and ~$55 million impact from retail term contract backwardation. Illustrative Adj. FCFbG excludes $500 million securitization proceeds. Provided for illustrative purposes only and should not be read or viewed as Vistra's actual 2022 guidance, which is also set forth above.

(4)

The amount of the securitization proceeds reflects management's estimate. The final amount is expected to be determined in December 2021, and the payment of the proceeds will be subject to ERCOT's ability to secure the financing.  The Company currently expects the proceeds to be reflected in Ongoing Operations Adjusted EBITDA for the quarter ended Dec. 31, 2021.  The inclusion of the securitization proceeds in Ongoing Operations Adjusted EBITDA guidance is a non-GAAP determination at this time, reflecting management's view of the financial impact of securitization on operating results, which offsets a portion of the Uri-related retail costs incurred during the first quarter of 2021, and the representative period for which the proceeds relate. The GAAP measurement is still under review. Management expects the GAAP determination will be finalized prior to the filing of the company's 2021 Form 10-K.

Liquidity

As of Sept. 30, 2021, Vistra had total available liquidity of ~$2,071 million, including cash and cash equivalents of $351 million, and $1,720 million of availability under its revolving credit facility.

Earnings Webcast

Vistra will host a webcast today, Nov. 5, 2021, beginning at 8 a.m. ET (7 a.m. CT) to discuss these results and related matters. The live webcast and the accompanying slides that will be discussed on the call can be accessed via Vistra's website at www.vistracorp.com under "Investor Relations" and then "Events & Presentations." Participants can also listen by phone by registering here prior to the start time of the call to receive a conference call dial-in number. A replay of the webcast will be available on the Vistra website for one year following the live event.

About Non-GAAP Financial Measures and Items Affecting Comparability

"Adjusted EBITDA" (EBITDA as adjusted for unrealized gains or losses from hedging activities, tax receivable agreement impacts, reorganization items, and certain other items described from time to time in Vistra's earnings releases), "Adjusted Free Cash Flow before Growth" (or "Adjusted FCFbG") (cash from operating activities excluding changes in margin deposits and working capital and adjusted for capital expenditures (including capital expenditures for growth investments), other net investment activities, and other items described from time to time in Vistra's earnings releases), "Ongoing Operations Adjusted EBITDA" (adjusted EBITDA less adjusted EBITDA from Asset Closure segment), "Ongoing Operations Adjusted EBITDA, excluding Uri" (Ongoing Operations Adjusted EBITDA as further adjusted to exclude the impacts arising from Uri), "Ongoing Operations Illustrative Adjusted EBITDA" (Ongoing Operations Adjusted EBITDA as further adjusted to exclude the impacts arising from Uri and the Year 1 impacts from various long-dated, NPV-positive retail contracts), "Net Income from Ongoing Operations" (net income less net income from Asset Closure segment), "Ongoing Operations Adjusted Free Cash Flow before Growth" or "Ongoing Operations Adjusted FCFbG" (adjusted free cash flow before growth less cash flow from operating activities from Asset Closure segment before growth), and "Ongoing Operations Illustrative Adjusted FCFbG (Ongoing Operations Adjusted FCFbG as further adjusted to exclude the impacts arising from Uri and the Year 1 impacts from various long-dated, NPV-positive retail contracts), are "non-GAAP financial measures." A non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in Vistra's consolidated statements of operations, comprehensive income, changes in stockholders' equity and cash flows. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. Vistra's non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

Vistra uses Adjusted EBITDA as a measure of performance and believes that analysis of its business by external users is enhanced by visibility to both Net Income prepared in accordance with GAAP and Adjusted EBITDA. Vistra uses Adjusted Free Cash Flow before Growth as a measure of liquidity and believes that analysis of its ability to service its cash obligations is supported by disclosure of both cash provided by (used in) operating activities prepared in accordance with GAAP as well as Adjusted Free Cash Flow before Growth. Vistra uses Ongoing Operations Adjusted EBITDA as a measure of performance and Ongoing Operations Adjusted Free Cash Flow before Growth as a measure of liquidity and Vistra's management and Board have found it informative to view the Asset Closure segment as separate and distinct from Vistra's ongoing operations. Vistra uses Net Income from Ongoing Operations as a non-GAAP measure that is most comparable to the GAAP measure Net Income in order to illustrate the company's Net Income excluding the effects of the Asset Closure segment, as well as a measure to compare to Ongoing Operations Adjusted EBITDA. Vistra uses Ongoing Operations Adjusted EBITDA, excluding Uri to present a more normalized view of operating performance excluding the impacts of Uri. Vistra uses Ongoing Operations Illustrative Adjusted EBITDA to present a more normalized view of the long-term earnings power of the Company. The schedules attached to this earnings release reconcile the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

About Vistra
Vistra (NYSE: VST) is a leading, Fortune 275 integrated retail electricity and power generation company based in Irving, Texas, providing essential resources for customers, commerce, and communities. Vistra combines an innovative, customer-centric approach to retail with safe, reliable, diverse, and efficient power generation. The company brings its products and services to market in 20 states and the District of Columbia, including six of the seven competitive wholesale markets in the U.S. and markets in Canada and Japan, as well. Serving nearly 4.3 million residential, commercial, and industrial retail customers with electricity and natural gas, Vistra is one of the largest competitive residential electricity providers in the country and offers over 50 renewable energy plans. The company is also the largest competitive power generator in the U.S., with a capacity of approximately 39,000 megawatts powered by a diverse portfolio, including natural gas, nuclear, solar, and battery energy storage facilities. In addition, Vistra is a large purchaser of wind power. The company owns and operates a 400-MW/1,600-MWh battery energy storage system in Moss Landing, California, the largest of its kind in the world. Vistra is guided by four core principles: we do business the right way, we work as a team, we compete to win, and we care about our stakeholders, including our customers, our communities where we work and live, our employees, and our investors. Learn more about our environmental, social, and governance efforts and read the company's sustainability report at https://www.vistracorp.com/sustainability/.

Cautionary Note Regarding Forward-Looking Statements
The information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which Vistra Corp. ("Vistra") operates and beliefs of and assumptions made by Vistra's management, involve risks and uncertainties, which are difficult to predict and are not guarantees of future performance, that could significantly affect the financial results of Vistra. All statements, other than statements of historical facts, that are presented herein, or in response to questions or otherwise, that address activities, events or developments that may occur in the future, including such matters as activities related to our financial or operational projections, the potential impacts of the COVID-19 pandemic on our results of operations, financial condition and cash flows, projected synergy, value lever and net debt targets, capital allocation, capital expenditures, liquidity, projected Adjusted EBITDA to free cash flow conversion rate, dividend policy, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of power generation assets, market and industry developments and the growth of our businesses and operations (often, but not always, through the use of words or phrases, or the negative variations of those words or other comparable words of a future or forward-looking nature, including, but not limited to: "intends," "plans," "will likely," "unlikely," "believe," "confident", "expect," "seek," "anticipate," "estimate," "continue," "will," "shall," "should," "could," "may," "might," "predict," "project," "forecast," "target," "potential," "goal," "objective," "guidance" and "outlook"),are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Although Vistra believes that in making any such forward-looking statement, Vistra's expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and risks that could cause results to differ materially from those projected in or implied by any such forward-looking statement, including, but not limited to: (i) adverse changes in general economic or market conditions (including changes in interest rates) or changes in political conditions or federal or state laws and regulations; (ii) the ability of Vistra to execute upon its contemplated strategic, capital allocation, performance, and cost-saving initiatives and to successfully integrate acquired businesses; (iii) actions by credit ratings agencies; (iv) the severity, magnitude and duration of pandemics, including the COVID-19 pandemic, and the resulting effects on our results of operations, financial condition and cash flows; (v) the severity, magnitude and duration of extreme weather events (including Winter Storm Uri), contingencies and uncertainties relating thereto, most of which are difficult to predict and many of which are beyond our control, and the resulting effects on our results of operations, financial condition and cash flows; and (vi) those additional risks and factors discussed in reports filed with the Securities and Exchange Commission by Vistra from time to time, including the uncertainties and risks discussed in the sections entitled "Risk Factors" and "Forward-Looking Statements" in Vistra's annual report on Form 10-K for the year ended December 31, 2020 and any subsequently filed quarterly reports on Form 10-Q.

Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law, Vistra will not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible to predict all of them; nor can Vistra assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.

VISTRA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (Millions of Dollars)


Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020

Operating revenues

$

2,991



$

3,552



$

8,763



$

8,919


Fuel, purchased power costs and delivery fees

(1,763)



(1,469)



(7,827)



(3,832)


Operating costs

(372)



(457)



(1,173)



(1,249)


Depreciation and amortization

(468)



(410)



(1,355)



(1,284)


Selling, general and administrative expenses

(269)



(268)



(771)



(755)


Impairment of long-lived assets



(272)



(38)



(356)


Operating income (loss)

119



676



(2,401)



1,443


Other income

16



8



108



19


Other deductions

(5)





(13)



(35)


Interest expense and related charges

(124)



(101)



(288)



(541)


Impacts of Tax Receivable Agreement

35



58



31



44


Equity in earnings of unconsolidated investment







4


Income (loss) before income taxes

41



641



(2,563)



934


Income tax (expense) benefit

(31)



(199)



569



(283)


Net income (loss)

$

10



$

442



$

(1,994)



$

651


Net (income) loss attributable to noncontrolling interest

(3)



1



(6)



14


Net income (loss) attributable to Vistra

$

7



$

443



$

(2,000)



$

665


 


VISTRA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (Millions of Dollars)


Nine Months Ended September 30,


2021


2020

Cash flows — operating activities:




Net income (loss)

$

(1,994)



$

651


Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:




Depreciation and amortization

1,551



1,512


Deferred income tax expense (benefit), net

(587)



264


Impairment of long-lived assets

38



356


Loss on disposal of investment in NELP



29


Unrealized net (gain) loss from mark-to-market valuations of commodities

771



(444)


Unrealized net (gain) loss from mark-to-market valuations of interest rate swaps

(92)



181


Asset retirement obligation accretion expense

27



33


Impacts of Tax Receivable Agreement

(31)



(44)


Stock-based compensation

36



46


Other, net

79



115


Changes in operating assets and liabilities:




Margin deposits, net

(767)



60


Accrued interest

(55)



(97)


Accrued taxes

(63)



(35)


Accrued employee incentive

(86)



(20)


Other operating assets and liabilities

680



(257)


Cash provided by (used in) operating activities

(493)



2,350


Cash flows — investing activities:




Capital expenditures, including nuclear fuel purchases and LTSA prepayments

(790)



(838)


Proceeds from sales of nuclear decommissioning trust fund securities

366



291


Investments in nuclear decommissioning trust fund securities

(382)



(307)


Proceeds from sales of environmental allowances

102



91


Purchases of environmental allowances

(247)



(210)


Insurance proceeds

74



15


Proceeds from sale of assets

7



23


Other, net

27



8


Cash used in investing activities

(843)



(927)


Cash flows — financing activities:




Issuances of long-term debt

1,250




Borrowings under Term Loan A

1,250




Repayment under Term Loan A

(1,250)




Proceeds from forward capacity agreement

500




Repayments/repurchases of debt

(234)



(955)


Net borrowings under accounts receivable financing

175



175


Borrowings under Revolving Credit Facility

1,300



1,075


Repayments under Revolving Credit Facility

(1,300)



(1,425)


Share repurchases

(175)




Dividends paid to stockholders

(219)



(198)


Debt tender offer and other financing fees

(13)



(17)


Other, net

(5)



(3)


Cash provided by (used in) financing activities

1,279



(1,348)


Net change in cash, cash equivalents and restricted cash

(57)



75


Cash, cash equivalents and restricted cash — beginning balance

444



475


Cash, cash equivalents and restricted cash — ending balance

$

387



$

550


 

 


VISTRA CORP.

NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

(Unaudited) (Millions of Dollars)



Retail


Texas


East


West


Sunset


Eliminations / Corp and Other


Ongoing Operations Consolidated


Asset Closure


Vistra Corp. Consolidated

Net income (loss)

$

779



$

4



$

(233)



$

(18)



$

(375)



$

(141)



$

16



$

(6)



$

10


Income tax expense

2











29



31





31


Interest expense and related charges (a)

2



(3)



5



(1)



1



119



123



1



124


Depreciation and amortization (b)

53



200



164



15



40



17



489





489


EBITDA before Adjustments

836



201



(64)



(4)



(334)



24



659



(5)



654


Unrealized net (gain) loss resulting from hedging transactions

(739)



654



254



39



381





589





589


Generation plant retirement expenses









4



1



5





5


Fresh start/purchase accounting impacts

(2)



(2)







(13)





(17)





(17)


Impacts of Tax Receivable Agreement











(35)



(35)





(35)


Non-cash compensation expenses











11



11





11


Transition and merger expenses

(4)











2



(2)





(2)


Impairment of long-lived assets



2











2





2


COVID-19-related expenses (c)



1











1





1


Winter Storm Uri impacts (d)

(31)



(2)











(33)





(33)


Other, net

5



4



3



1



(2)



(14)



(3)



1



(2)


Adjusted EBITDA

$

65



$

858



$

193



$

36



$

36



$

(11)



$

1,177



$

(4)



$

1,173


Other Winter Storm Uri impacts (e)

(13)



3











(10)





(10)


Adjusted EBITDA, excluding Winter Storm Uri impacts

$

52



$

861



$

193



$

36



$

36



$

(11)



$

1,167



$

(4)



$

1,163








(a)  

Includes $13 million of unrealized mark-to-market net gains on interest rate swaps.

(b) 

Includes nuclear fuel amortization of $21 million in Texas segment.

(c)  

Includes material and supplies and other incremental costs related to our COVID-19 response.

(d) 

Includes bill credits related to large commercial and industrial customers that curtailed during Winter Storm Uri as the credits are applied to customer bills and a small reduction of ERCOT default uplift charges, partially offset by ongoing Winter Storm Uri related legal fees and other costs.

(e)   

Includes the ERCOT resettlement and revenue true-up benefit of $43 million net of bill credits of $(33) million applied to large commercial and industrial customer bills that curtailed during Uri.

 

 


VISTRA CORP.

NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(Unaudited) (Millions of Dollars)



Retail


Texas


East


West


Sunset


Eliminations / Corp and Other


Ongoing Operations Consolidated


Asset Closure


Vistra Corp. Consolidated

Net income (loss)

$

2,677



$

(3,651)



$

(332)



$

(62)



$

(841)



$

235



$

(1,974)



$

(20)



$

(1,994)


Income tax expense (benefit)

2











(571)



(569)





(569)


Interest expense and related charges (a)

7



(10)



11



(9)



1



287



287



1



288


Depreciation and amortization (b)

160



523



553



30



99



51



1,416





1,416


EBITDA before Adjustments

2,846



(3,138)



232



(41)



(741)



2



(840)



(19)



(859)


Unrealized net (gain) loss resulting from hedging transactions

(2,840)



2,269



407



120



815





771





771


Generation plant retirement expenses









19





19





19


Fresh start/purchase accounting impacts

1



(3)



(74)





(20)





(96)





(96)


Impacts of Tax Receivable Agreement











(31)



(31)





(31)


Non-cash compensation expenses











40



40





40


Transition and merger expenses

(2)













(2)



(15)



(17)


Impairment of long-lived assets



2







38





40





40


COVID-19-related expenses (c)



3



1





1



1



6





6


Winter Storm Uri impacts (d)

354



511







1





866





866


Other, net

17



6



7



2



2



(31)



3



2



5


Adjusted EBITDA

376



(350)



573



81



115



(19)



776



(32)



744


Other Winter Storm Uri impacts (e)

551



1,551



(50)





(17)





2,035





2,035


Adjusted EBITDA, excluding Winter Storm Uri impacts

$

927



$

1,201



$

523



$

81



$

98



$

(19)



$

2,811



$

(32)



$

2,779








(a)  

Includes $92 million of unrealized mark-to-market net gains on interest rate swaps.

(b)   

Includes nuclear fuel amortization of $61 million in the Texas segment.

(c)  

Includes material and supplies and other incremental costs related to our COVID-19 response.

(d)   

Includes the following amounts, which we believe are not reflective of our operating performance: $194 million for allocation of ERCOT default uplift charges which are expected to be paid over more than 90 years under current protocols (net present value of $45 million applying a 4.25% discount rate); accrual of Koch earn-out disputed amounts of $286 million that the Company is contesting and does not believe should be paid; $386 million for future bill credits related to Winter Storm Uri as further described below and Winter Storm Uri related legal fees and other costs.  The adjustment for future bill credits relates to large commercial and industrial customers that curtailed during Winter Storm Uri and will reverse and impact Adjusted EBITDA in future periods as the credits are applied to customer bills.  We estimate the amounts to be applied in future periods are for the remainder of 2021 (approximately $43 million), 2022 (approximately $185 million), 2023 (approximately $84 million), 2024 (approximately $18 million), and 2025 (approximately $8 million). The Company believes the inclusion of the bill credits as a reduction to Adjusted EBITDA in the years in which such bill credits are applied more accurately reflects its operating performance.

(e)  

Removes losses incurred due to the need to procure power in ERCOT at market prices at or near the price cap due to lower output from our natural gas-fueled power plants driven by natural gas deliverability issues and our coal-fueled power plants driven by coal fuel handling challenges, high fuel costs, and high retail load costs, partially offset by favorable prices on volumes produced in the East and Sunset segments.

 

 


VISTRA CORP.

NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(Unaudited) (Millions of Dollars)



Retail


Texas


East


West


Sunset


Eliminations / Corp and Other


Ongoing Operations Consolidated


Asset Closure


Vistra Corp. Consolidated

Net income (loss)

$

109



$

908



$

100



$

29



$

(368)



$

(276)



$

502



$

(60)



$

442


Income tax expense











199



199





199


Interest expense and related charges (a)

2



(2)



2



(3)



1



101



101





101


Depreciation and amortization (b)

67



127



181



5



22



17



419



12



431


EBITDA before Adjustments

178



1,033



283



31



(345)



41



1,221



(48)



1,173


Unrealized net (gain) loss resulting from hedging transactions

(316)



(78)



(40)



(9)



122





(321)





(321)


Generation plant retirement expenses









43





43





43


Fresh start / purchase accounting impacts

(6)





6














Impacts of Tax Receivable Agreement











(58)



(58)





(58)


Non-cash compensation expenses











16



16





16


Transition and merger expenses

1





(5)







2



(2)





(2)


Impairment of long-lived assets









272





272





272


COVID-19-related expenses (c)



2







1





3





3


Other, net

3



15



1



1





(11)



9



2



11


Adjusted EBITDA

$

(140)



$

972



$

245



$

23



$

93



$

(10)



$

1,183



$

(46)



$

1,137








(a)  

Includes $11 million of unrealized mark-to-market net gains on interest rate swaps.

(b)   

Includes nuclear fuel amortization of $20 million in Texas segment.

(c)    

Includes material and supplies and other incremental costs related to our COVID-19 response.

 

 

VISTRA CORP.

NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(Unaudited) (Millions of Dollars)



Retail


Texas


East


West


Sunset


Eliminations / Corp and Other


Ongoing Operations Consolidated


Asset Closure


Vistra Corp. Consolidated

Net income (loss)

$

433



$

1,484



$

119



$

49



$

(469)



$

(876)



$

740



$

(89)



$

651


Income tax expense











283



283





283


Interest expense and related charges (a)

8



(6)



6



(6)



2



537



541





541


Depreciation and amortization (b)

229



397



540



14



101



48



1,329



12



1,341


EBITDA before Adjustments

670



1,875



665



57



(366)



(8)



2,893



(77)



2,816


Unrealized net (gain) loss resulting from hedging transactions

(114)



(449)



(37)



(1)



157





(444)





(444)


Generation plant retirement expenses









43





43





43


Fresh start / purchase accounting impacts

1



(4)



23





14





34





34


Impacts of Tax Receivable Agreement











(44)



(44)





(44)


Non-cash compensation expenses











46



46





46


Transition and merger expenses

8



1



1







10



20



(3)



17


Impairment of long-lived assets









356





356





356


Loss on disposal of investment in NELP





29









29





29


COVID-19-related expenses (c)



12



2





3



1



18





18


Other, net

7



17



8



3



2



(25)



12



2



14


Adjusted EBITDA

$

572



$

1,452



$

691



$

59



$

209



$

(20)



$

2,963



$

(78)



$

2,885








(a)  

Includes $181 million of unrealized mark-to-market net losses on interest rate swaps.

(b)   

Includes nuclear fuel amortization of $57 million in Texas segment.

(c)   

Included material and supplies and other incremental costs related to our COVID-19 response.


 

 

VISTRA CORP.

NON-GAAP RECONCILIATIONS - 2021 GUIDANCE1

(Unaudited) (Millions of Dollars)



Ongoing

Operations


Asset

Closure


Vistra Corp.

Consolidated


Low


High


Low


High


Low


High

Net income (loss)

$

(1,918)



$

(1,764)



$

(67)



$

(47)



$

(1,985)



$

(1,811)


Income tax benefit

(509)



(463)







(509)



(463)


Interest expense and related charges (a)

417



417







417



417


Depreciation and amortization (b)

1,790



1,790







1,790



1,790


EBITDA before Adjustments

$

(220)



$

(20)



$

(67)



$

(47)



$

(287)



$

(67)


Unrealized net (gain)/loss resulting from hedging transactions

763



763







763



763


Fresh start / purchase accounting impacts

(78)



(78)







(78)



(78)


Impacts of Tax Receivable Agreement

(17)



(17)







(17)



(17)


Non-cash compensation expenses

48



48







48



48


Transition and merger expenses

27



27



(15)



(15)



12



12


Winter storm Uri impacts (c)

1,326



1,326







1,326



1,326


Other, net

41



41



2



2



43



43


Adjusted EBITDA guidance

$

1,890



$

2,090



$

(80)



$

(60)



$

1,810



$

2,030


Interest paid, net

(504)



(504)







(504)



(504)


Tax (paid) / received (d)

(44)



(44)







(44)



(44)


Tax receivable agreement payments

(2)



(2)







(2)



(2)


Working capital and margin deposits

(738)



(738)



(4)



(4)



(742)



(742)


Accrued environmental allowances

253



253







253



253


Reclamation and remediation

(38)



(38)



(66)



(66)



(104)



(104)


Winter storm Uri impacts (e)

(500)



(500)







(500)



(500)


Other changes in other operating assets and liabilities

(120)



(120)



(42)



(42)



(162)



(162)


Cash provided by operating activities

$

197



$

397



$

(192)



$

(172)



$

5



$

225


Capital expenditures including nuclear fuel purchases and LTSA prepayments

(639)



(639)







(639)



(639)


Solar and Moss Landing development and other growth expenditures

(471)



(471)







(471)



(471)


(Purchase) / sale of environmental credits and allowances

(197)



(197)







(197)



(197)


Other net investing activities

(18)



(18)



8



8



(10)



(10)


Free cash flow

$

(1,128)



$

(928)



$

(184)



$

(164)



$

(1,312)



$

(1,092)


Working capital and margin deposits

738



738



4



4



742



742


Solar and Moss Landing development and other growth expenditures

471



471







471



471


Accrued environmental allowances

(253)



(253)







(253)



(253)


Purchase / (sale) of environmental credits and allowances

197



197







197



197


Transition and merger expenses

58



58



40



40



98



98


Transition capital expenditures

17



17







17



17


Adjusted free cash flow before growth guidance

$

100



$

300



$

(140)



$

(120)



$

(40)



$

180








1 Regulation G Table for 2021 Guidance prepared as of November 5, 2021.

(a)  

Includes unrealized (gain) / loss on interest rate swaps of ($105) million.

(b)  

Includes nuclear fuel amortization of $82 million.

(c)  

Includes $500 million securitization proceeds, $194 million for allocation of ERCOT default uplift charges; accrual of Koch earn-out disputed amounts of $286 million; $306 million for future bill credits related to Winter Storm Uri and Winter Storm Uri related legal fees and other costs.  The adjustment for future bill credits relates to large commercial and industrial customers that curtailed during Winter Storm Uri and will reverse in future periods as the credits are applied to customer bills. We estimate the amounts to be applied in future years are 2022 (~$185 million), 2023 (~$84 million), 2024 (~$18 million), and 2025 (~$8 million).

(d) 

Includes state tax payments.

(e)   

Adjustments for non-cash impact of securitization proceeds.


 

 

VISTRA CORP.

NON-GAAP RECONCILIATIONS - 2022 GUIDANCE1

(Unaudited) (Millions of Dollars)



Ongoing

Operations


Asset

Closure


Vistra Corp.

Consolidated


Low


High


Low


High


Low


High

Net income (loss)

$

1,027



$

1,401



$

(140)



$

(40)



$

887



$

1,361


Income tax expense

301



427







301



427


Interest expense and related charges (a)

467



467







467



467


Depreciation and amortization (b)

1,640



1,640







1,640



1,640


EBITDA before Adjustments

$

3,435



$

3,935



$

(140)



$

(40)



$

3,295



$

3,895


Unrealized net (gain)/loss resulting from hedging transactions

(557)



(557)







(557)



(557)


Fresh start / purchase accounting impacts

19



19







19



19


Impacts of Tax Receivable Agreement

65



65







65



65


Non-cash compensation expenses

38



38







38



38


Transition and merger expenses

2



2







2



2


Winter storm Uri impacts (c)

(185)



(185)







(185)



(185)


Other, net

(7)



(7)







(7)



(7)


Adjusted EBITDA guidance

$

2,810



$

3,310



$

(140)



$

(40)



$

2,670



$

3,270


Interest paid, net

(514)



(514)







(514)



(514)


Tax (paid) / received (d)

(44)



(44)







(44)



(44)


Tax receivable agreement payments

(1)



(1)







(1)



(1)


Working capital and margin deposits

644



644



18



18



662



662


Accrued environmental allowances

330



330







330



330


Reclamation and remediation

(19)



(19)



(89)



(89)



(108)



(108)


Winter storm Uri impacts (e)

500



500







500



500


Other changes in other operating assets and liabilities

58



58



(26)



(26)



32



32


Cash provided by operating activities

$

3,764



$

4,264



$

(237)



$

(137)



$

3,527



$

4,127


Capital expenditures including nuclear fuel purchases and LTSA prepayments

(717)



(717)







(717)



(717)


Solar and storage development expenditures (f)

TBD






TBD

Other growth expenditures

(120)



(120)







(120)



(120)


(Purchase) / sale of environmental credits and allowances

(229)



(229)







(229)



(229)


Other net investing activities

(20)



(20)







(20)



(20)


Free cash flow

$

2,678



$

3,178



$

(237)



$

(137)



$

2,441



$

3,041


Working capital and margin deposits

(644)



(644)



(18)



(18)



(662)



(662)


Solar and storage development expenditures (f)

TBD






TBD

Other growth expenditures

120



120







120



120


Accrued environmental allowances

(330)



(330)







(330)



(330)


Purchase / (sale) of environmental credits and allowances

229



229







229



229


Transition and merger expenses

11



11



25



25



36



36


Transition capital expenditures

6



6







6



6


Adjusted free cash flow before growth guidance

$

2,070



$

2,570



$

(230)



$

(130)



$

1,840



$

2,440








1 Regulation G Table for 2021 Guidance prepared as of November 5, 2021.

(a)  

Includes unrealized (gain) / loss on interest rate swaps of ($50) million.

(b)  

Includes nuclear fuel amortization of $88 million.

(c) 

Adjustment for bill credits applied to large commercial and industrial customers that curtailed during 2021 Winter Storm Uri. We estimate the amounts to be applied in future years are 2023 (~$84 million), 2024 (~$18 million) and 2025 (~$8 million).

(d)  

Includes state tax payments.

(e) 

Receipt of securitization proceeds.

(f)  

Estimates for solar & energy capital expenditures in 2022 awaiting completion of renewables financing strategy.

 

 

VISTRA CORP.

NON-GAAP RECONCILIATIONS - ILLUSTRATIVE 2022 GUIDANCE1

(Unaudited) (Millions of Dollars)



Ongoing

Operations


Asset

Closure


Vistra Corp.

Consolidated


Low


High


Low


High


Low


High

Net income (loss)

$

1,027



$

1,401



$

(140)



$

(40)



$

887



$

1,361


Income tax expense

301



427







301



427


Interest expense and related charges (a)

467



467







467



467


Depreciation and amortization (b)

1,640



1,640







1,640



1,640


EBITDA before Adjustments

$

3,435



$

3,935



$

(140)



$

(40)



$

3,295



$

3,895


Unrealized net (gain)/loss resulting from hedging transactions

(557)



(557)







(557)



(557)


Fresh start / purchase accounting impacts

19



19







19



19


Impacts of Tax Receivable Agreement

65



65







65



65


Non-cash compensation expenses

38



38







38



38


Transition and merger expenses

2



2







2



2


Winter storm Uri impacts












Other, net (c)

48



48







48



48


Adjusted EBITDA guidance

$

3,050



$

3,550



$

(140)



$

(40)



$

2,910



$

3,510


Interest paid, net

(514)



(514)







(514)



(514)


Tax (paid) / received (d)

(44)



(44)







(44)



(44)


Tax receivable agreement payments

(1)



(1)







(1)



(1)


Working capital and margin deposits

644



644



18



18



662



662


Accrued environmental allowances

330



330







330



330


Reclamation and remediation

(19)



(19)



(89)



(89)



(108)



(108)


Winter storm Uri impacts












Other changes in other operating assets and liabilities

58



58



(26)



(26)



32



32


Cash provided by operating activities

$

3,504



$

4,004



$

(237)



$

(137)



$

3,267



$

3,867


Capital expenditures including nuclear fuel purchases and LTSA prepayments

(717)



(717)







(717)



(717)


Solar and storage development expenditures (e)

TBD






TBD

Other growth expenditures

(120)



(120)







(120)



(120)


(Purchase) / sale of environmental credits and allowances

(229)



(229)







(229)



(229)


Other net investing activities

(20)



(20)







(20)



(20)


Free cash flow

$

2,418



$

2,918



$

(237)



$

(137)



$

2,181



$

2,781


Working capital and margin deposits

(644)



(644)



(18)



(18)



(662)



(662)


Solar and storage development expenditures (e)

TBD






TBD

Other growth expenditures

120



120







120



120


Accrued environmental allowances

(330)



(330)







(330)



(330)


Purchase / (sale) of environmental credits and allowances

229



229







229



229


Transition and merger expenses

11



11



25



25



36



36


Transition capital expenditures

6



6







6



6


Adjusted free cash flow before growth guidance

$

1,810



$

2,310



$

(230)



$

(130)



$

1,580



$

2,180








1 Regulation G Table for 2021 Guidance prepared as of November 5, 2021. 2022 Illustrative Guidance excludes ~$185 million impact from bill credits applied to large commercial and industrial customer bills that curtailed during Uri and ~$55 million impact from retail term contract backwardation. Also excludes $500 million securitization proceeds from Adjusted FCFbG. Provided for illustrative purposes only and should not be read or viewed as Vistra's actual 2022 guidance, which is also set forth above.

(a) 

Includes unrealized (gain) / loss on interest rate swaps of ($50) million.

(b)

Includes nuclear fuel amortization of $88 million.

(c)

Includes $55 million adjustment for retail term contracts backwardation

(d)

Includes state tax payments.

(e)

Estimates for solar & energy capital expenditures in 2022 awaiting completion of renewables financing strategy.

 

 

SOURCE Vistra Corp.

For further information: Media, Meranda Cohn, 214-875-8004, Media.Relations@vistracorp.com; Analysts, Molly Sorg, 214-812-0046, Investor@vistracorp.com