Vistra Energy Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

vistra-20200630

Table of Contents

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 JUNE 30, 2020

— 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 July 31, 2020, there were 488,780,072 shares of common stock, par value $0.01, outstanding of Vistra Corp.

Table of Contents

TABLE OF CONTENTS


		PAGE
GLOSSARY		ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30 , 2020 and 2019	1
	Condensed Consolidated Statements of Comprehensive Income — Three and Six Months Ended June 30 , 2020 and 2019	1
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 3 0 , 2020 and 2019	2
	Condensed Consolidated Balance Sheets — June 30 , 2020 and December 31, 2019	3
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	75
PART II.	OTHER INFORMATION	76
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	77
SIGNATURE		80

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.

Table of Contents

GLOSSARY

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


2019 Form 10-K						Vistra's annual report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 28, 2020
Ambit						Ambit Holdings, LLC, and/or its subsidiaries (d/b/a Ambit), depending on context
ARO						asset retirement and mining reclamation obligation
CAA						Clean Air Act
CAISO						The California Independent System Operator
CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CCGT						combined cycle gas turbine
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, respectively), 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
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
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
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

Table of Contents


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 Agreement						the Agreement and Plan of Merger, dated as of October 29, 2017, by and between Vistra and Dynegy
Merger Date						April 9, 2018, the date Vistra and Dynegy completed the transactions contemplated by the Merger Agreement
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
NELP						Northeast Energy, LP, a joint venture between Dynegy Northeast Generation GP, Inc. and Dynegy Northeast Associates LP, Inc., both indirect subsidiaries of Vistra, and certain subsidiaries of NextEra Energy, Inc. NELP indirectly owned Bellingham NEA facility and the Sayreville facility.
NELP Transaction						a transaction among Dynegy Northeast Generation GP, Inc., Dynegy Northeast Associates LP, Inc. and certain subsidiaries of NextEra Energy, Inc. wherein the indirect subsidiaries of Vistra redeemed their ownership interest in NELP partnership in exchange for 100% ownership interest in NJEA, the entity which owns the Sayreville facility.
NERC						North American Electric Reliability Corporation
NJEA						North Jersey Energy Associates, a Limited Partnership
NO_X						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
OPEB						postretirement employee benefits other than pensions
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., 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, NYISO, ISO-NE 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
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
SO₂						sulfur dioxide

iii

Table of Contents


Tax Matters Agreement						Tax Matters Agreement, dated as of the Effective Date, by and among Energy Future Holdings Corp. (EFH Corp.), Energy Future Intermediate Holding Company LLC, EFIH Finance Inc. and EFH Merger Co. LLC
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 Receivables 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 8 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
TWh						terawatt-hours
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, NYISO, ISO-NE 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, 4Change Energy and Express 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. Effective July 2, 2020, Vistra Energy Corp. changed its name to Vistra Corp.
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 11 to the Financial Statements) and borrower under the Vistra Operations Credit Facilities
Vistra Operations Credit Facilities						Vistra Operations Company LLC's $5.311 billion senior secured financing facilities (see Note 11 to the Financial Statements).

Table of Contents

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 June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Operating revenues (Note 5)	$	2,509	$	2,832	$	5,367	$	5,755
Fuel, purchased power costs and delivery fees	(1,029)		(1,139)		(2,362)		(2,600)
Operating costs	(412)		(370)		(792)		(755)
Depreciation and amortization	(455)		(384)		(875)		(790)
Selling, general and administrative expenses	(236)		(210)		(488)		(392)

Impairment of long-lived assets (Note 18)	—		—		(84)		—
Operating income	377		729		766		1,218
Other income (Note 18)	5		13		12		39
Other deductions (Note 18)	(4)		(2)		(35)		(5)
Interest expense and related charges (Note 18)	(141)		(274)		(440)		(495)
Impacts of Tax Receivable Agreement (Note 8)	(6)		33		(14)		36
Equity in earnings of unconsolidated investment	1		3		4		10
Income before income taxes	232		502		293		803
Income tax expense (Note 7)	(68)		(148)		(84)		(225)
Net income	$	164	$	354	$	209	$	578
Net loss attributable to noncontrolling interest	2		2		13		3
Net income attributable to Vistra	$	166	$	356	$	222	$	581
Weighted average shares of common stock outstanding:
Basic	488,680,442		499,778,235		488,312,503		499,213,522
Diluted	490,468,735		507,500,383		490,709,932		507,248,920
Net income per weighted average share of common stock outstanding:
Basic	$	0.34	$	0.71	$	0.45	$	1.16
Diluted	$	0.34	$	0.70	$	0.45	$	1.15

See Notes to the Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) (Millions of Dollars)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net income	$	164	$	354	$	209	$	578
Other comprehensive income, net of tax effects:
Effects related to pension and other retirement benefit obligations (net of tax benefit of $—, $—, $7 and $—)	1		—		(22)		1

Total other comprehensive income (loss)	1		—		(22)		1
Comprehensive income	$	165	$	354	$	187	$	579
Comprehensive loss attributable to noncontrolling interest	2		2		13		3
Comprehensive income attributable to Vistra	$	167	$	356	$	200	$	582

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions of Dollars)
	Six Months Ended June 30,
	2020		2019
Cash flows — operating activities:
Net income	$	209	$	578
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	1,022		886
Deferred income tax expense, net	73		217

Impairment of long-lived assets (Note 18)	84		—
Loss on disposal of investment in NELP (Note 18)	29		—

Unrealized net gain from mark-to-market valuations of commodities	(123)		(703)
Unrealized net loss from mark-to-market valuations of interest rate swaps	192		199
Asset retirement obligation accretion expense	23		27
Impacts of Tax Receivable Agreement (Note 8)	14		(36)
Stock-based compensation	30		24
Other, net	55		73
Changes in operating assets and liabilities:
Margin deposits, net	58		112
Accrued interest	(6)		6
Accrued taxes	(59)		(67)
Accrued employee incentive	(70)		(72)
Other operating assets and liabilities	(222)		(362)
Cash provided by operating activities	1,309		882
Cash flows — investing activities:
Capital expenditures, including nuclear fuel purchases and LTSA prepayments	(588)		(303)
Proceeds from sales of nuclear decommissioning trust fund securities (Note 18)	224		292
Investments in nuclear decommissioning trust fund securities (Note 18)	(234)		(302)
Proceeds from sales of environmental allowances

Price	26.88	EPS	1
Shares	494	P/E	19
MCap	13,270	P/FCF	7
Net Debt	10,195	EBIT	1,685
TEV	23,465	TEV/EBIT	14
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-05
10-Q	2020-03-31	Filed 2020-05-05
10-K	2019-12-31	Filed 2020-02-28
10-Q	2019-09-30	Filed 2019-11-05
10-Q	2019-06-30	Filed 2019-08-02
10-Q	2019-03-31	Filed 2019-05-03
10-K	2018-12-31	Filed 2019-02-28
10-Q	2018-09-30	Filed 2018-11-02
10-Q	2018-06-30	Filed 2018-08-06
10-Q	2018-03-31	Filed 2018-05-04
10-K	2017-12-31	Filed 2018-02-26

8-K	2020-08-05	Earnings, Exhibits
8-K	2020-07-13	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2020-06-29	Amend Bylaw, Exhibits
8-K	2020-05-05
8-K	2020-04-29
8-K	2020-03-13
8-K	2020-02-28
8-K	2020-02-21
8-K	2019-11-15
8-K	2019-11-14
8-K	2019-11-06
8-K	2019-11-05
8-K	2019-09-18
8-K	2019-08-02
8-K	2019-07-15
8-K	2019-07-08
8-K	2019-06-20
8-K	2019-06-11
8-K	2019-06-04
8-K	2019-05-29
8-K	2019-05-28
8-K	2019-05-20
8-K	2019-05-03
8-K	2019-04-01
8-K	2019-03-29
8-K	2019-02-28
8-K	2019-02-05
8-K	2019-01-22
8-K	2018-11-14
8-K	2018-11-02
8-K	2018-08-21
8-K	2018-08-07
8-K	2018-08-06
8-K	2018-06-27
8-K	2018-06-15
8-K	2018-06-12
8-K	2018-05-04
8-K	2018-04-24
8-K	2018-04-09
8-K	2018-04-04
8-K	2018-03-02
8-K	2018-02-26
8-K	2018-02-22
8-K	2018-02-22
8-K	2018-01-26
8-K	2018-01-17

EX-31.1	vistra-20200630xex311.htm
EX-31.2	vistra-20200630xex312.htm
EX-32.1	vistra-20200630xex321.htm
EX-32.2	vistra-20200630xex322.htm
EX-95.1	vistra-20200630xex951.htm

VST 10Q Quarterly Report

Vistra Energy Earnings 2020-06-30