Vistra Corp. [VST] Filings

10-Q 1 vistra-20220331.htm 10-Q vistra-20220331

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 MARCH 31, 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 May 3, 2022, there were 431,822,253 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 Months Ended March 31 , 202 2 and 202 1	1
	Condensed Consolidated Statements of Comprehensive Loss — Three Months Ended March 31 , 202 2 and 20 21	1
	Condensed Consolidated Statements of Cash Flows — T hree Months Ended March 31 , 202 2 and 202 1	2
	Condensed Consolidated Balance Sheets — March 31 , 202 2 and December 31, 202 1	3
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	69
PART II.	OTHER INFORMATION	70
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	71
Item 6.	Exhibits	71
SIGNATURE		73

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 or Ambit Energy						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
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
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

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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
Preferred Stock						Vistra's Series A Preferred Stock and Series B Preferred Stock
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
SG&A						selling, general and administrative
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 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 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 March 31,
		2022		2021
Operating revenues (Note 4)		$	3,125	$	3,207
Fuel, purchased power costs and delivery fees		(2,279)		(4,745)
Operating costs		(416)		(371)
Depreciation and amortization		(430)		(423)
Selling, general and administrative expenses		(288)		(251)


Operating loss		(288)		(2,583)
Other income (Note 17)		5		55
Other deductions (Note 17)		(4)		(5)
Interest expense and related charges (Note 17)		(7)		(29)
Impacts of Tax Receivable Agreement (Note 7)		(81)		37

Loss before income taxes		(375)		(2,525)
Income tax benefit (Note 6)		91		485
Net loss		$	(284)	$	(2,040)
Net income attributable to noncontrolling interest		(1)		(3)
Net loss attributable to Vistra		$	(285)	$	(2,043)
Cumulative dividends attributable to preferred stock		(38)		—
Net loss attributable to Vistra common stock		$	(323)	$	(2,043)
Weighted average shares of common stock outstanding:
Basic		451,603,354		484,699,267
Diluted		451,603,354		484,699,267
Net loss per weighted average share of common stock outstanding:
Basic		$	(0.72)	$	(4.21)
Diluted		$	(0.72)	$	(4.21)

See Notes to the Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited) (Millions of Dollars)


	Three Months Ended March 31,
		2022		2021
Net loss		$	(284)	$	(2,040)
Other comprehensive income (loss), net of tax effects:
Effects related to pension and other retirement benefit obligations (net of tax benefit of $— and $—)		—		2

Total other comprehensive income (loss)		—		2
Comprehensive loss		$	(284)	$	(2,038)
Comprehensive income attributable to noncontrolling interest		(1)		(3)
Comprehensive loss attributable to Vistra		$	(285)	$	(2,041)

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions of Dollars)
	Three Months Ended March 31,
	2022		2021
Cash flows — operating activities:
Net loss	$	(284)	$	(2,040)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	542		511
Deferred income tax expense (benefit), net	(84)		(524)




Unrealized net (gain) loss from mark-to-market valuations of commodities	360		(96)
Unrealized net gain from mark-to-market valuations of interest rate swaps	(126)		(88)
Asset retirement obligation accretion expense	9		11
Impacts of Tax Receivable Agreement	81		(37)
Stock-based compensation	14		16
Other, net	32		11
Changes in operating assets and liabilities:
Margin deposits, net	210		(134)

Accrued interest	(62)		(75)
Accrued taxes	(98)		(79)
Accrued employee incentive	(59)		(128)
Other operating assets and liabilities	56		999
Cash provided by (used in) operating activities	591		(1,653)
Cash flows — investing activities:
Capital expenditures, including nuclear fuel purchases and LTSA prepayments	(373)		(192)

Proceeds from sales of nuclear decommissioning trust fund securities	98		133
Investments in nuclear decommissioning trust fund securities	(103)		(138)
Proceeds from sales of environmental allowances	7		45
Purchases of environmental allowances	(116)		(28)
Insurance proceeds	1		40

Other, net	6		11
Cash used in investing activities	(480)		(129)
Cash flows — financing activities:

Borrowings under Term Loan A	—		1,000

Proceeds from forward capacity agreement	—		500
Repayments/repurchases of debt	(132)		(36)
Net borrowings under accounts receivable financing	500		425
Borrowings under Revolving Credit Facility	—		1,300
Repayments under Revolving Credit Facility	—		(1,000)
Share repurchases	(710)		(175)
Dividends paid to common stockholders	(77)		(74)


Other, net	6		(1)
Cash (used in) provided by financing activities	(413)		1,939
Net change in cash, cash equivalents and restricted cash	(302)		157
Cash, cash equivalents and restricted cash — beginning balance	1,359		444
Cash, cash equivalents and restricted cash — ending balance	$	1,057	$	601

See Notes to the Condensed Consolidated Financial Statements.

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VISTRA CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)
	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,022	$	1,325
Restricted cash (Note 17)	23		21
Trade accounts receivable — net (Note 17)	1,275		1,397
Income taxes receivable	21		15
Inventories (Note 17)	546		610
Commodity and other derivative contractual assets (Note 14)	6,004		2,513
Margin deposits related to commodity contracts	1,237		1,263
Uplift securitization proceeds receivable from ERCOT (Note 1)	544		544
Prepaid expense and other current assets	241		195
Total current assets	10,913		7,883
Restricted cash (Note 17)	12		13
Investments (Note 17)	1,952		2,049

Property, plant and equipment — net (Note 17)	12,887		13,056
Operating lease right-of-use assets	39		40

Goodwill (Note 5)	2,583		2,583
Identifiable intangible assets — net (Note 5)	2,158		2,146
Commodity and other derivative contractual assets (Note 14)	545		250
Accumulated deferred income taxes	1,400		1,302
Other noncurrent assets	344		361
Total assets	$	32,833	$	29,683
LIABILITIES AND EQUITY
Current liabilities:

Accounts receivable financing (Note 9)	$	500	$	—
Long-term debt due currently (Note 10)	124		254
Trade accounts payable	1,284		1,515
Commodity and other derivative contractual liabilities (Note 14)	6,835		3,023
Margin deposits related to commodity contracts	223		39

Accrued taxes other than income	109		207
Accrued interest	81		143
Asset retirement obligations (Note 17)	104		104
Operating lease liabilities	5		5

Other current liabilities	600		553
Total current liabilities	9,865		5,843
Long-term debt, less amounts due currently (Note 10)	10,473		10,477
Operating lease liabilities	37		38

Commodity and other derivative contractual liabilities (Note 14)	1,108		804

Tax Receivable Agreement obligation (Note 7)	475		394
Asset retirement obligations (Note 17)	2,347		2,346

Other noncurrent liabilities and deferred credits (Note 17)	1,226		1,489
Total liabilities	25,531		21,391

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VISTRA CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)
	March 31, 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: March 31, 2022 and December 31, 2021— 1,000,000); Series B (liquidation preference — $1,000; shares outstanding: March 31, 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: March 31, 2022 — 438,694,982; December 31, 2021 — 469,072,597)	5		5
Treasury stock, at cost (shares: March 31, 2022 — 95,887,643; December 31, 2021 — 63,856,879)	(2,170)		(1,558)
Additional paid-in-capital	9,844		9,824
Retained deficit	(2,363)		(1,964)
Accumulated other comprehensive loss	(16)		(16)
Stockholders' equity	7,300		8,291
Noncontrolling interest in subsidiary	2		1
Total equity	7,302		8,292
Total liabilities and equity	$	32,833	$	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 results of operations and operating cash flows.

Uplift Securitization Proceeds Receivable 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 expect to receive approximately $544 million of proceeds from ERCOT. The Company accounted for the proceeds we will receive 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. The proceeds are expected to be received from ERCOT in the second quarter of 2022, and 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, including any resulting corrective action taken by ERCOT or the PUCT to resettle pricing during the week of the storm.

Recent Developments

Dividends Declared — In May 2022, the Board declared a quarterly dividend of $0.177 per share of common stock that will be paid in June 2022. In May 2022, the Board declared a semi-annual dividend of $35.97 per share of Series B Preferred Stock that will be paid in June 2022.

Vistra Operations Credit Agreement Amendment — In April 2022, the Vistra Operations Credit Agreement was amended to, among other things, (i) establish extended revolving credit commitments of $2.8 billion (with ability to increase up to $3.0 billion pursuant to an incremental amendment), (ii) maintain non-extended revolving credit commitments of $200 million, (iii) increase revolving letter of credit commitments to allow for the full amount of all revolving credit commitments to be utilized to issue letters of credit (and as of the closing of the amendment, the aggregate amount of revolving letter of credit commitments was $2.595 billion) and (iv) extend the maturity date for the extended revolving credit commitments from June 14, 2023 to April 29, 2027 (see Note 10).

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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.

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 768 MW of solar photovoltaic power generation facilities and 260 MW of battery ESS in Texas. The first 158 MW of solar generation came online in January and February 2022 and the battery ESS came online in April 2022. Estimated commercial operation dates for the remaining facilities range from fourth quarter of 2023 to fourth quarter of 2024. At March 31, 2022, we had accumulated approximately $309 million in construction-work-in-process for these Texas segment solar generation and battery ESS projects.

East Segment Solar Generation and Energy Storage Projects

In September 2021, we announced the planned development of up to 300 MW of solar photovoltaic power generation facilities and up to 150 MW of battery ESS at retired or to-be-retired plant sites in Illinois, based on the passage of Illinois Senate Bill 2408, the Energy Transition Act. Estimated commercial operation dates for these facilities range from 2023 to 2025.

West Segment Energy Storage Projects

Oakland — In June 2019, East Bay Community Energy (EBCE) signed a ten-year contract to receive resource adequacy capacity from the planned development of a 20 MW battery ESS at our Oakland Power Plant site in California. In April 2020, the project received necessary approvals from EBCE and from Pacific Gas and Electric Company (PG&E). The contract was amended to increase the capacity of the planned development to a 36.25 MW battery ESS. In April 2020, the concurrent Local Area Reliability Service (LARS) agreement to ensure grid reliability as part of the Oakland Clean Energy Initiative was signed, but required California Public Utilities Commission (CPUC) approval. PG&E did not receive CPUC approval as of April 15, 2021. On April 16, 2021, Vistra terminated the LARS agreement with PG&E. We are continuing development of the Oakland battery ESS project while seeking another contractual arrangement that will allow the investment to move forward.

Moss Landing — In June 2018, we announced that, subject to approval by the CPUC, we would enter into a 20-year resource adequacy contract with PG&E to develop a 300 MW battery ESS at our Moss Landing Power Plant site in California (Moss Landing Phase I). The CPUC approved the resource adequacy contract in November 2018. Under the contract, PG&E will pay us a fixed monthly resource adequacy payment, while we will receive the energy revenues and incur the costs from dispatching and charging the ESS. Moss Landing Phase I commenced commercial operations in May 2021.

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In May 2020, we announced that, subject to approval by the CPUC, we would enter into a 10-year resource adequacy contract with PG&E to develop an additional 100 MW battery ESS at our Moss Landing Power Plant site (Moss Landing Phase II). The CPUC approved the resource adequacy contract in August 2020. Moss Landing Phase II commenced commercial operations in July 2021.

In January 2022, we announced that, subject to approval by the CPUC, we would enter into a 15-year resource adequacy contract with PG&E to develop an additional 350 MW battery ESS at our Moss Landing Power Plant site (Moss Landing Phase III). The CPUC approved the resource adequacy contract in April 2022. Moss Landing Phase III is expected to enter commercial operations in the summer of 2023. At March 31, 2022, we had accumulated approximately $20 million in construction-work-in-process for Moss Landing Phase III.

Moss Landing Outages — In September 2021, Moss Landing Phase I experienced an incident impacting a portion of the battery ESS. A review found the root cause originated in systems separate from the battery system. The facility will be offline as we perform the work necessary to return the facility to service. Moss Landing Phase II was not affected by this incident.

In February 2022, Moss Landing Phase II experienced an incident impacting a portion of the battery ESS. A review found the root cause originated in systems separate from the battery system. The facility will be offline as we perform the work necessary to return the facility to service. Moss Landing Phase I was not affected by this incident.

We are continuing restoration work on the facilities and assuming our work continues as planned we expect to restore both facilities to service in phases beginning in June 2022 with approximately 350 MW anticipated to be online by the end of June 2022.

We do not expect these incidents to have a material impact on our results of operations.

3. RETIREMENT OF GENERATION FACILITIES

In 2020, we announced our intention to retire all of our remaining coal generation facilities in Illinois and Ohio, one coal generation facility in Texas and one natural gas facility in Illinois no later than year-end 2027 due to economic challenges, including incremental expenditures that would be required to comply with the CCR rule and ELG rule (see Note 11), and in furtherance of our efforts to significantly reduce our carbon footprint. In April 2021, we announced we would retire the Joppa generation facilities by September 1, 2022 in order to settle a complaint filed with the Illinois Pollution Control Board (IPCB) by the Sierra Club in 2018. We had previously announced that Joppa would retire no later than the end of 2027. In July 2021, we announced we would retire the Zimmer coal generation facility by May 31, 2022 due to the inability to secure capacity revenues for the plant in the latest PJM capacity auction held in May 2021. We had previously announced that Zimmer would retire no later than the end of 2027.

Operational results for plants with defined retirement dates are included in our Sunset segment beginning in the quarter when a retirement plan is announced and move to the Asset Closure segment at the beginning of the calendar year the retirement is expected to occur.

Facility

Location

ISO/RTO

Fuel Type

Net Generation Capacity (MW)

Expected Retirement Date (a)

Segment

Baldwin

Baldwin, IL

MISO

Coal

1,185

By the end of 2025

Sunset

Coleto Creek

Goliad, TX

ERCOT

Coal

650

By the end of 2027

Sunset

Edwards

Bartonville, IL

MISO

Coal

585

January 1, 2023

Sunset

Joppa

Joppa, IL

MISO

Coal

802

By September 1, 2022

Asset Closure

Joppa

Joppa, IL

MISO

Natural Gas

221

By September 1, 2022

Asset Closure

Kincaid

Kincaid, IL

PJM

Coal

1,108

By the end of 2027

Sunset

Miami Fort

North Bend, OH

PJM

Coal

1,020

By the end of 2027

Sunset

Newton

Newton, IL

MISO/PJM

Coal

615

By the end of 2027

Sunset

Zimmer

Moscow, OH

PJM

Coal

1,300

By May 31, 2022

Asset Closure

Total

7,486

____________

(a)Generation facilities may retire earlier than expected dates if economic or other conditions dictate.

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4. REVENUE


	Three Months Ended March 31, 2022
	Retail		Texas		East		West		Sunset		Asset Closure		Eliminations		Consolidated
Revenue from contracts with customers:
Retail energy charge in ERCOT	$	1,405	$	—	$	—	$	—	$	—	$	—	$	—	$	1,405
Retail energy charge in Northeast/Midwest	639		—		—		—		—		—		—		639
Wholesale generation revenue from ISO/RTO	—		151		402		58		170		135		—		916
Capacity revenue from ISO/RTO (a)	—		—		(6)		—		37		12		—		43
Revenue from other wholesale contracts	—		120		243		39		44		12		—		458
Total revenue from contracts with customers	2,044		271		639		97		251		159		—		3,461
Other revenues:
Intangible amortization	—		—		—		—		(2)		—		—		(2)
Hedging and other revenues (b)	(219)		—		309		(28)		(344)		(52)		—		(334)
Affiliate sales (c)	—		(1,366)		7		3		(45)		—		1,401		—
Total other revenues	(219)		(1,366)		316		(25)		(391)		(52)		1,401		(336)
Total revenues	$	1,825	$	(1,095)	$	955	$	72	$	(140)	$	107	$	1,401	$	3,125

____________

(a)Represents net capacity sold (purchased) in each ISO/RTO. The East segment includes $136 million of capacity purchased offset by $130 million of capacity sold. The Sunset segment includes $2 million of capacity purchased offset by $39 million of capacity sold. The Asset Closure segment includes $12 million of capacity sold.

(b)Includes $358 million of unrealized net losses from mark-to-market valuations of commodity positions. See Note 16 for unrealized net gains (losses) by segment.

(c)Texas, East and Sunset segments include $2.011 billion, $509 million and $153 million, respectively, of affiliated unrealized net losses from mark-to-market valuations of commodity positions with the Retail segment.

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	Three Months Ended March 31, 2021
	Retail		Texas		East		West		Sunset		Asset Closure		Eliminations		Consolidated
Revenue from contracts with customers:
Retail energy charge in ERCOT	$	1,149	$	—	$	—	$	—	$	—	$	—	$	—	$	1,149
Retail energy charge in Northeast/Midwest	586		—		—		—		—		—		—		586
Wholesale generation revenue from ISO/RTO	—		3,246		156		38		679		44		—		4,163
Capacity revenue from ISO/RTO (a)	—		—		(4)		—		29		10		—		35
Revenue from other wholesale contracts	—		2,028		163		21		57		1		—		2,270
Total revenue from contracts with customers	1,735

Vistra Corp. [VST] Filings
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]