Vistra Corp. [VST] Filings

10-Q 1 vistra-20220930.htm 10-Q vistra-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

— OR —


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission File Number 001-38086

Vistra Corp.

(Exact name of registrant as specified in its charter)

Delaware

36-4833255

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

6555 Sierra Drive,

Irving,

Texas

75039

(214)

812-4600

(Address of principal executive offices) (Zip Code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.01 per share

VST

New York Stock Exchange

Warrants

VST.WS.A

New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of November 1, 2022, there were 397,953,513 shares of common stock, par value $0.01, outstanding of Vistra Corp.

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TABLE OF CONTENTS


		PAGE
GLOSSARY		ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2022 and 2021	1
	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Nine Months Ended September 30, 2022 and 2021	1
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2022 and 2021	2
	Condensed Consolidated Balance Sheets — September 30, 2022 and December 31, 2021	4
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	80
Item 4.	Controls and Procedures	85
PART II.	OTHER INFORMATION	86
Item 1.	Legal Proceedings	86
Item 1A.	Risk Factors	86
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86
Item 3.	Defaults Upon Senior Securities	86
Item 4.	Mine Safety Disclosures	86
Item 5.	Other Information	87
Item 6.	Exhibits	87
SIGNATURE		89

Vistra Corp.'s (Vistra) annual reports, quarterly reports, current reports and any amendments to those reports are made available to the public, free of charge, on the Vistra website at http://www.vistracorp.com, as soon as reasonably practicable after they have been filed with or furnished to the Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. Additionally, Vistra posts important information, including press releases, investor presentations, sustainability reports, and notices of upcoming events on its website and utilizes its website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. Investors may be notified of posting to the website by signing up for email alerts and RSS feeds on the "Investor Relations" page of Vistra's website. The information on Vistra's website shall not be deemed a part of, or incorporated by reference into, this quarterly report on Form 10-Q. The representations and warranties contained in any agreement that we have filed as an exhibit to this quarterly report on Form 10-Q, or that we have or may publicly file in the future, may contain representations and warranties that may (i) be made by and to the parties thereto at specific dates, (ii) be subject to exceptions and qualifications contained in separate disclosure schedules, (iii) represent the parties' risk allocation in the particular transaction, or (iv) be qualified by materiality standards that differ from what may be viewed as material for securities law purposes.

This quarterly report on Form 10-Q and other Securities and Exchange Commission filings of Vistra and its subsidiaries occasionally make references to Vistra (or "we," "our," "us" or "the Company"), Luminant, TXU Energy, Ambit, Value Based Brands, Dynegy Energy Services, Homefield Energy, TriEagle Energy, Public Power or U.S. Gas & Electric, when describing actions, rights or obligations of their respective subsidiaries. These references reflect the fact that the subsidiaries are consolidated with, or otherwise reflected in, the Vistra financial statements for financial reporting purposes. However, these references should not be interpreted to imply that the parent company is actually undertaking the action or has the rights or obligations of the relevant subsidiary company or vice versa.

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GLOSSARY

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below.


2021 Form 10-K						Vistra's annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022
Ambit						Ambit Holdings, LLC, and/or its subsidiaries (d/b/a Ambit), depending on context
ARO						asset retirement and mining reclamation obligation
CAISO						The California Independent System Operator
CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CCGT						combined cycle gas turbine
CCR						coal combustion residuals
CFTC						U.S. Commodity Futures Trading Commission
CME						Chicago Mercantile Exchange
CO2						carbon dioxide
CPUC						California Public Utilities Commission
Crius						Crius Energy Trust and/or its subsidiaries, depending on context
Dynegy						Dynegy Inc., and/or its subsidiaries, depending on context
Dynegy Energy Services						Dynegy Energy Services, LLC and Dynegy Energy Services (East), LLC (each d/b/a Dynegy, Better Buy Energy, Brighten Energy, Honor Energy and True Fit Energy), indirect, wholly owned subsidiaries of Vistra, that are REPs in certain areas of MISO and PJM, respectively, and are engaged in the retail sale of electricity to residential and business customers.
EBITDA						earnings (net income) before interest expense, income taxes, depreciation and amortization
Effective Date						October 3, 2016, the date our predecessor completed its reorganization under Chapter 11 of the U.S. Bankruptcy Code
Emergence						emergence of our predecessor from reorganization under Chapter 11 of the U.S. Bankruptcy Code as subsidiaries of a newly formed company, Vistra, on the Effective Date
EPA						U.S. Environmental Protection Agency
ERCOT						Electric Reliability Council of Texas, Inc.
ESS						energy storage system
Exchange Act						Securities Exchange Act of 1934, as amended
FERC						U.S. Federal Energy Regulatory Commission
GAAP						generally accepted accounting principles
GHG						greenhouse gas
GWh						gigawatt-hours
Green Finance Framework						Framework adopted by the Company and made available on its website pursuant to which the Company may issue financial instruments to fund new or existing projects that support renewable energy and energy efficiency, with alignment to the Company's environmental, social, and governance strategy
Homefield Energy						Illinois Power Marketing Company (d/b/a Homefield Energy), an indirect, wholly owned subsidiary of Vistra, a REP in certain areas of MISO that is engaged in the retail sale of electricity to municipal customers
ICE						Intercontinental Exchange
IEPA						Illinois Environmental Protection Agency
IPCB						Illinois Pollution Control Board
IRC						Internal Revenue Code of 1986, as amended
IRS						U.S. Internal Revenue Service
ISO						independent system operator
ISO-NE						ISO New England Inc.
LIBOR						London Interbank Offered Rate, an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market
load						demand for electricity

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LTSA						long-term service agreements for plant maintenance
Luminant						subsidiaries of Vistra engaged in competitive market activities consisting of electricity generation and wholesale energy sales and purchases as well as commodity risk management
market heat rate						Heat rate is a measure of the efficiency of converting a fuel source to electricity. Market heat rate is the implied relationship between wholesale electricity prices and natural gas prices and is calculated by dividing the wholesale market price of electricity, which is based on the price offer of the marginal supplier (generally natural gas plants), by the market price of natural gas.
Merger						the merger of Dynegy with and into Vistra, with Vistra as the surviving corporation
Merger Date						April 9, 2018, the date Vistra and Dynegy completed the transactions contemplated by the Agreement and Plan of Merger, dated as of October 29, 2017, by and between Vistra and Dynegy
MISO						Midcontinent Independent System Operator, Inc.
MMBtu						million British thermal units
Moody's						Moody's Investors Service, Inc. (a credit rating agency)
MSHA						U.S. Mine Safety and Health Administration
MW						megawatts
MWh						megawatt-hours
NERC						North American Electric Reliability Corporation
NOX						nitrogen oxide
NRC						U.S. Nuclear Regulatory Commission
NYISO						New York Independent System Operator, Inc.
NYMEX						the New York Mercantile Exchange, a commodity derivatives exchange
Parent						Vistra Corp.
PJM						PJM Interconnection, LLC
Plan of Reorganization						Third Amended Joint Plan of Reorganization filed by the parent company of our predecessor in August 2016 and confirmed by the U.S. Bankruptcy Court for the District of Delaware in August 2016 solely with respect to our predecessor
PrefCo						Vistra Preferred Inc.
PrefCo Preferred Stock Sale						as part of the tax-free spin-off from Energy Future Holdings Corp. (EFH Corp.), executed pursuant to the Plan of Reorganization on the Effective Date by our predecessor, the contribution of certain of the assets of our predecessor and its subsidiaries by a subsidiary of TEX Energy LLC to PrefCo in exchange for all of PrefCo's authorized preferred stock, consisting of 70,000 shares, par value $0.01 per share
Public Power						Public Power, LLC (d/b/a Public Power), an indirect, wholly owned subsidiary of Vistra, a REP in certain areas of PJM, ISO-NE, NYISO and MISO that is engaged in the retail sale of electricity to residential and business customers
PUCT						Public Utility Commission of Texas
REP						retail electric provider
RCT						Railroad Commission of Texas, which among other things, has oversight of lignite mining activity in Texas, and has jurisdiction over oil and natural gas exploration and production, permitting and inspecting intrastate pipelines, and overseeing natural gas utility rates and compliance
RTO						regional transmission organization
S&P						Standard & Poor's Ratings (a credit rating agency)
SEC						U.S. Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
Series A Preferred Stock						Vistra's 8.0% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value, with a liquidation preference of $1,000 per share
Series B Preferred Stock						Vistra's 7.0% Series B Fixed-Rate Reset Cumulative Green Redeemable Perpetual Preferred Stock, $0.01 par value, with a liquidation preference of $1,000 per share
SO2						sulfur dioxide
Tax Matters Agreement						Tax Matters Agreement, dated as of the Effective Date, by and among EFH Corp., Energy Future Intermediate Holding Company LLC, EFIH Finance Inc. and EFH Merger Co. LLC

iii

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TCEH						Texas Competitive Electric Holdings Company LLC, a direct, wholly owned subsidiary of Energy Future Competitive Holdings Company LLC, and, prior to the Effective Date, the parent company of our predecessor, depending on context, that were engaged in electricity generation and wholesale and retail energy market activities, and whose major subsidiaries included Luminant and TXU Energy
TCEQ						Texas Commission on Environmental Quality
TRA						Tax Receivable Agreement, containing certain rights (TRA Rights) to receive payments from Vistra related to certain tax benefits, including benefits realized as a result of certain transactions entered into at Emergence (see Note 7 to the Financial Statements)
TRE						Texas Reliability Entity, Inc., an independent organization that develops reliability standards for the ERCOT region and monitors and enforces compliance with NERC standards and monitors compliance with ERCOT protocols
TriEagle Energy						TriEagle Energy, LP (d/b/a TriEagle Energy, TriEagle Energy Services, Eagle Energy, Energy Rewards, Power House Energy and Viridian Energy), an indirect, wholly owned subsidiary of Vistra, a REP in certain areas of ERCOT and PJM that is engaged in the retail sale of electricity to residential and business customers
TXU Energy						TXU Energy Retail Company LLC (d/b/a TXU), an indirect, wholly owned subsidiary of Vistra that is a REP in competitive areas of ERCOT and is engaged in the retail sale of electricity to residential and business customers
U.S.						United States of America
U.S. Gas & Electric						U.S. Gas and Electric, Inc. (d/b/a USG&E, Illinois Gas & Electric and ILG&E), an indirect, wholly owned subsidiary of Vistra, a REP in certain areas of PJM, ISO-NE, NYISO and MISO that is engaged in the retail sale of electricity to residential and business customers
Value Based Brands						Value Based Brands LLC (d/b/a 4Change Energy, Express Energy and Veteran Energy), an indirect, wholly owned subsidiary of Vistra that is a REP in competitive areas of ERCOT and is engaged in the retail sale of electricity to residential and business customers
Vistra						Vistra Corp. and/or its subsidiaries, depending on context
Vistra Intermediate						Vistra Intermediate Company LLC, a direct, wholly owned subsidiary of Vistra
Vistra Operations						Vistra Operations Company LLC, an indirect, wholly owned subsidiary of Vistra that is the issuer of certain series of notes (see Note 10 to the Financial Statements) and borrower under the Vistra Operations Credit Facilities
Vistra Operations Credit Agreement						Credit agreement, dated as of October 3, 2016 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time), by and among Vistra Operations, Vistra Intermediate, the lenders party thereto, the letter of credit issuers party thereto, the administrative agent, the collateral agent, and the other parties named therein
Vistra Operations Credit Facilities						Vistra Operations senior secured financing facilities (see Note 10 to the Financial Statements)

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PART I. FINANCIAL INFORMATION

Item 1.FINANCIAL STATEMENTS

VISTRA CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (Millions of Dollars, Except Per Share Amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating revenues (Note 4)	$	5,146	$	2,991	$	9,859	$	8,763
Fuel, purchased power costs and delivery fees	(3,139)		(1,763)		(7,580)		(7,827)
Operating costs	(400)		(372)		(1,250)		(1,173)
Depreciation and amortization	(390)		(468)		(1,214)		(1,355)
Selling, general and administrative expenses	(323)		(269)		(894)		(771)

Impairment of long-lived assets (Note 17)	—		—		—		(38)
Operating income (loss)	894		119		(1,079)		(2,401)
Other income (Note 17)	10		16		88		108
Other deductions (Note 17)	(5)		(5)		(18)		(13)
Interest expense and related charges (Note 17)	(71)		(124)		(186)		(288)
Impacts of Tax Receivable Agreement (Note 7)	86		35		(29)		31

Net income (loss) before income taxes	914		41		(1,224)		(2,563)
Income tax (expense) benefit (Note 6)	(236)		(31)		262		569
Net income (loss)	$	678	$	10	$	(962)	$	(1,994)
Net income attributable to noncontrolling interest	(10)		(3)		(19)		(6)
Net income (loss) attributable to Vistra	$	668	$	7	$	(981)	$	(2,000)
Cumulative dividends attributable to preferred stock	(37)		—		(112)		—
Net income (loss) attributable to Vistra common stock	$	631	$	7	$	(1,093)	$	(2,000)
Weighted average shares of common stock outstanding:
Basic	413,762,896		482,516,965		431,381,151		483,150,213
Diluted	417,482,511		484,494,546		431,381,151		483,150,213
Net income (loss) per weighted average share of common stock outstanding:
Basic	$	1.53	$	0.01	$	(2.53)	$	(4.14)
Diluted	$	1.51	$	0.01	$	(2.53)	$	(4.14)

See Notes to the Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited) (Millions of Dollars)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	678	$	10	$	(962)	$	(1,994)
Other comprehensive income, net of tax effects:
Effects related to pension and other retirement benefit obligations (net of tax expense of $2, $4, $2 and $5)	6		14		6		17

Total other comprehensive income	6		14		6		17
Comprehensive income (loss)	$	684	$	24	$	(956)	$	(1,977)
Comprehensive income attributable to noncontrolling interest	(10)		(3)		(19)		(6)
Comprehensive income (loss) attributable to Vistra	$	674	$	21	$	(975)	$	(1,983)

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions of Dollars)
	Nine Months Ended September 30,
	2022		2021
Cash flows — operating activities:
Net loss	$	(962)	$	(1,994)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	1,575		1,551
Deferred income tax benefit, net	(298)		(587)

Impairment of long-lived assets	—		38


Unrealized net loss from mark-to-market valuations of commodities	2,027		771
Unrealized net gain from mark-to-market valuations of interest rate swaps	(261)		(92)
Asset retirement obligation accretion expense	26		27
Impacts of Tax Receivable Agreement	29		(31)
Stock-based compensation	48		36
Bad debt expense	136		86
Other, net	—		(7)
Changes in operating assets and liabilities:
Margin deposits, net	(1,805)		(767)
Uplift securitization proceeds receivable from ERCOT	544		—
Accrued interest	(31)		(55)
Accrued taxes	(46)		(63)
Accrued employee incentive	(17)		(86)
Other operating assets and liabilities	(873)		680
Cash provided by (used in) operating activities	92		(493)
Cash flows — investing activities:
Capital expenditures, including nuclear fuel purchases and LTSA prepayments	(909)		(790)

Proceeds from sales of nuclear decommissioning trust fund securities	428		366
Investments in nuclear decommissioning trust fund securities	(446)		(382)
Proceeds from sales of environmental allowances	358		102
Purchases of environmental allowances	(343)		(247)
Insurance proceeds	15		74
Proceeds from sale of assets	21		7
Other, net	(10)		27
Cash used in investing activities	(886)		(843)
Cash flows — financing activities:
Issuances of long-term debt	1,498		1,250
Borrowings under Commodity-Linked Facility	2,750		—
Repayments under Commodity-Linked Facility	(2,750)		—
Borrowings under Term Loan A	—		1,250
Repayment under Term Loan A	—		(1,250)
Proceeds from forward capacity agreement	—		500
Repayments/repurchases of debt	(232)		(234)
Net borrowings under accounts receivable financing	625		175
Borrowings under Revolving Credit Facility	1,500		1,300
Repayments under Revolving Credit Facility	(1,500)		(1,300)
Share repurchases	(1,590)		(175)
Dividends paid to common stockholders	(227)		(219)

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VISTRA CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions of Dollars)
	Nine Months Ended September 30,
	2022		2021
Dividends paid to preferred stockholders	(76)		—
Debt tender offer and other financing fees	(29)		(13)
Other, net	34		(5)
Cash provided by financing activities	3		1,279
Net change in cash, cash equivalents and restricted cash	(791)		(57)
Cash, cash equivalents and restricted cash — beginning balance	1,359		444
Cash, cash equivalents and restricted cash — ending balance	$	568	$	387

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)
	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	535	$	1,325
Restricted cash (Note 17)	23		21
Trade accounts receivable — net (Note 17)	1,854		1,397
Income taxes receivable	—		15
Inventories (Note 17)	590		610
Commodity and other derivative contractual assets (Note 14)	6,786		2,513
Margin deposits related to commodity contracts	3,066		1,263
Uplift securitization proceeds receivable from ERCOT (Note 1)	—		544
Prepaid expense and other current assets	291		195
Total current assets	13,145		7,883
Restricted cash (Note 17)	10		13
Investments (Note 17)	1,637		2,049

Property, plant and equipment — net (Note 17)	12,550		13,056
Operating lease right-of-use assets	39		40

Goodwill (Note 5)	2,583		2,583
Identifiable intangible assets — net (Note 5)	2,002		2,146
Commodity and other derivative contractual assets (Note 14)	1,062		250
Accumulated deferred income taxes	1,653		1,302
Other noncurrent assets	494		361
Total assets	$	35,175	$	29,683
LIABILITIES AND EQUITY
Current liabilities:

Accounts receivable financing (Note 9)	$	625	$	—
Long-term debt due currently (Note 10)	38		254
Trade accounts payable	1,398		1,515
Commodity and other derivative contractual liabilities (Note 14)	8,796		3,023
Margin deposits related to commodity contracts	37		39
Accrued income taxes	6		—
Accrued taxes other than income	154		207
Accrued interest	112		143
Asset retirement obligations (Note 17)	121		104
Operating lease liabilities	8		5

Other current liabilities	616		553
Total current liabilities	11,911		5,843
Long-term debt, less amounts due currently (Note 10)	11,947		10,477
Operating lease liabilities	33		38

Commodity and other derivative contractual liabilities (Note 14)	1,803		804

Tax Receivable Agreement obligation (Note 7)	423		394
Asset retirement obligations (Note 17)	2,340		2,346

Other noncurrent liabilities and deferred credits (Note 17)	1,117		1,489
Total liabilities	29,574		21,391

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VISTRA CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)
	September 30, 2022		December 31, 2021
Commitments and Contingencies (Note 11)
Total equity (Note 12):
Preferred stock, number of shares authorized — 100,000,000; Series A (liquidation preference — $1,000; shares outstanding: September 30, 2022 and December 31, 2021— 1,000,000); Series B (liquidation preference — $1,000; shares outstanding: September 30, 2022 and December 31, 2021 — 1,000,000)	2,000		2,000
Common stock (par value — $0.01; number of shares authorized — 1,800,000,000) (shares outstanding: September 30, 2022 — 405,444,072; December 31, 2021 — 469,072,597)	5		5
Treasury stock, at cost (shares: September 30, 2022 — 131,640,516; December 31, 2021 — 63,856,879)	(3,052)		(1,558)
Additional paid-in-capital	9,923		9,824
Retained deficit	(3,284)		(1,964)
Accumulated other comprehensive loss	(10)		(16)
Stockholders' equity	5,582		8,291
Noncontrolling interest in subsidiary	19		1
Total equity	5,601		8,292
Total liabilities and equity	$	35,175	$	29,683

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

References in this report to "we," "our," "us" and "the Company" are to Vistra and/or its subsidiaries, as apparent in the context. See Glossary for defined terms.

Vistra is a holding company operating an integrated retail and electric power generation business primarily in markets throughout the U.S. Through our subsidiaries, we are engaged in competitive energy market activities including electricity generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity and natural gas to end users.

Vistra has six reportable segments: (i) Retail, (ii) Texas, (iii) East, (iv) West, (v) Sunset and (vi) Asset Closure. See Note 16 for further information concerning our reportable business segments.

Winter Storm Uri

In February 2021, a severe winter storm with extremely cold temperatures affected much of the U.S., including Texas. This severe weather resulted in surging demand for power, gas supply shortages, operational challenges for generators, and a significant load shed event that was ordered by ERCOT beginning on February 15, 2021 and continuing through February 18, 2021. Winter Storm Uri had a material adverse impact on our 2021 results of operations and operating cash flows.

Uplift Securitization Proceeds from ERCOT — As part of the 2021 regular Texas legislative sessions and in response to extraordinary costs incurred by electricity market participants during Winter Storm Uri, the Texas legislature passed House Bill (HB) 4492 for ERCOT to obtain financing to distribute to load-serving entities (LSEs) that were uplifted and paid to ERCOT exceptionally high price adders and ancillary service costs during Winter Storm Uri. In October 2021, the PUCT issued a Debt Obligation Order approving $2.1 billion financing and the methodology for allocation of proceeds to the LSEs. In December 2021, ERCOT finalized the amount of allocations to the LSEs, and we received $544 million of proceeds from ERCOT in the second quarter of 2022. The Company accounted for the proceeds we received by analogy to the contribution model within Accounting Standards Codification (ASC) 958-605, Not-for-Profit Entities - Revenue Recognition and the grant model within International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance, as a reduction to expenses in the statements of operations in the annual period for which the proceeds are intended to compensate. We concluded that the threshold for recognizing a receivable was met in December 2021 as the amounts to be received were determinable and ERCOT was directed by its governing body, the PUCT, to take all actions required to effectuate the $2.1 billion funding approved in the Debt Obligation Order. The final financial impact of Winter Storm Uri continues to be subject to the outcome of litigation arising from the event.

Recent Developments

Dividends Declared — In October 2022, the Board declared a quarterly dividend of $0.193 per share of common stock that will be paid in December 2022. In October 2022, the Board declared a semi-annual dividend of $35.00 per share of Series B Preferred Stock that will be paid in December 2022.

Commodity-Linked Revolving Credit Facility — On October 5, 2022, Vistra initiated an amendment to the Commodity-Linked Facility to, among other things, (i) extend the maturity date to October 2023 and (ii) reduce the aggregate available commitments to $1.25 billion. On October 21, 2022, the Commodity-Linked Facility was further amended to increase the aggregate available commitments to $1.35 billion.

Table of Contents

Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and on the same basis as the audited financial statements included in our 2021 Form 10-K. The condensed consolidated financial information herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal nature. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and footnotes required by U.S. GAAP, they should be read in conjunction with the audited financial statements and related notes contained in our 2021 Form 10-K. The results of operations for an interim period may not give a true indication of results for a full year. All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated. Certain prior period amounts have been reclassified to conform with the current year presentation.

In the third quarter of 2021, the Company determined that depreciation expense on certain property, plant, and equipment assets was calculated incorrectly in prior years as a result of incorrectly assigned useful lives to these assets, which resulted in a misstatement to depreciation expense and accumulated depreciation. Additionally, an error was identified related to assets that were incorrectly retired prior to the end of their useful lives. The Company identified that depreciation expense and accumulated depreciation was understated by $23 million, $39 million and $3 million for the years ended December 31, 2018, 2019, and 2020, respectively, and overstated by $20 million for the six-month period ended June 30, 2021. In order to correct for the misstatements, the Company recorded an out-of-period adjustment to depreciation expense of $45 million for the three months ended September 30, 2021. The Company evaluated the effects of this out-of-period adjustment, both qualitatively and quantitatively, and concluded that this adjustment was not material to the Company's financial position or results of operations for the third quarter of 2021 or any prior periods.

Use of Estimates

Preparation of financial statements requires estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including fair value measurements, estimates of expected obligations, judgments related to the potential timing of events and other estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

2. DEVELOPMENT OF GENERATION FACILITIES

Texas Segment Solar Generation and Energy Storage Projects

We have announced the planned development of up to

Vistra Corp. [VST] Filings
Vistra Corp. [VST-WTA] Filings
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-02-25]
10-Q	[2021-11-05]
10-Q	[2021-08-05]
10-Q	[2021-05-04]
10-K	[2021-02-26]
10-Q	[2020-11-04]
10-Q	[2020-08-05]
10-Q	[2020-05-05]
10-K	[2020-02-28]
10-Q	[2019-11-05]
10-Q	[2019-08-02]
10-Q	[2019-05-03]
10-K	[2019-02-28]
10-Q	[2018-11-02]
10-Q	[2018-08-06]
10-Q	[2018-05-04]
10-K	[2018-02-26]
10-Q	[2017-11-03]
10-Q	[2017-08-04]
10-Q	[2017-05-18]
S-1	[2016-12-23]

Vistra Corp. [VST] Filings

Vistra Corp. [VST-WTA] Filings