Vistra Corp. · NYSE:VST
Vistra — Q2 2023 Earnings Presentation
47 slides from Vistra's earnings presentation, Aug 9, 2023
Slide 1: Second Quarter 2023 Results
Second Quarter 2023 Results Aug. 9, 2023 RESULTS
Slide 2: Safe Harbor Statements
Safe Harbor Statements Cautionary Note Regarding Forward-Looking Statements The information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, esti
Slide 3: Agenda
Agenda I. Welcome and Safe Harbor Meagan Horn, Vice President of Investor Relations II. Q2 2023 Highlights Jim Burke, President & Chief Executive Officer III. Q2 2023 Finance Update Kris Moldovan, Executive Vice President & Chief Financial Officer Vistra Investor Presentation / Q2 2023 3
Slide 4: Q2 2023 Highlights
Q2 2023 Highlights Jim Burke President & Chief Executive Officer VISTRA CORP. 04 Vistra Investor Presentation / Q2 2023 4
Slide 5: Continued and Steady Focus on our Four Strategic Priorities
Continued and Steady Focus on our Four Strategic Priorities Long-Term, Attractive Earnings Profile Significant and Consistent through the Integrated Business Model Shareholder Return of Capital • Strong generation, retail, and commercial team performance • Consistent execution on upsized $7.75 billi
Slide 6: Moss Landing Energy Storage Facility
Moss Landing Energy Storage Facility Phase III of the Moss Landing Energy Storage Facility came online June 2023 and brought the site's total energy storage capacity to 750MW / 3,000MWh Vistra Investor Presentation / Q2 2023 6
Slide 7: Results and Narrowing 2023 Guidance
Results Q2 2023 Financial Results Narrowing 2023 Guidance Ongoing Operations ($ millions) Ongoing Operations ($ millions) Adj. EBITDA1 $1,008 Initial Narrowed Guidance Guidance Highlights Adj. EBITDA1 $3,400 - $4,000 $3,600 - $4,000 • Favorable retail margin and counts performance as well as top-tie
Slide 8: Transformative Energy Harbor Acquisition - Update
Transformative Energy Harbor Acquisition - Update TRANSACTION Announced March 6, 2023 RECAP Will combine Energy Harbor’s nuclear (4 GW) and retail businesses with Vistra’s nuclear (2.4 GW) and retail businesses and certain Vistra Zero renewables and storage projects (“Vistra Vision”) Expected Run-Ra
Slide 9: Q2 2023 Finance Update
Q2 2023 Finance Update Kris Moldovan Executive Vice President & Chief Financial Officer VISTRA CORP. 04 Vistra Investor Presentation / Q2 2023 9
Slide 10: Q2 2023 Financial Results
Q2 2023 Financial Results Generation and Retail concluded second quarter 2023 with strong year-over-year performances ONGOING OPERATIONS ADJ. EBITDA1 ($ millions) $1,562 Generation3 1500 Q2 2023 is $157 million favorable as $1,297 469 compared to Q2 2022, primarily driven by: ✓ higher energy margins
Slide 11: Capital Allocation Update
Capital Allocation Update1 • Executed ~$2.9 billion from Nov. 2021 through Aug. 4, 2023 and ~$641 million from Jan. 2023 through Aug. 4, 2023 Share • Remaining ~$1.35 billion of authorization expected to be spent by year-end 2024 Repurchase • Aggregate share repurchases from Nov. 2021 through 2026 c
Slide 12: Market Curves and Hedge Position Update
Market Curves and Hedge Position Update Vistra’s comprehensive hedging program results in a more stable earnings profile and provides opportunities to lock-in significant gross margin Vistra Standalone ~86% hedged for 2023 - 20251 ✓ 2023 ~98% hedged (balance of year) ✓ 2024 ~95% hedged Increased con
Slide 13: Appendix
VICTPA aw bw = Appendix
Slide 14: Corporate Debt Profile
Corporate Debt Profile A strong balance sheet is core to Vistra’s strategy. Accordingly, Vistra remains committed to a long-term net leverage target (excluding any non-recourse debt at Vistra Zero) of less than 3x ($ millions) Q2 2023 Funded Revolving Credit Facility and Commodity Linked RCF $0 Term
Slide 15: Select Debt Balances
Select Debt Balances Funded Debt Tranches As of June 30, 20231 ($ millions) Issuer Series Principal Outstanding Secured Debt Vistra Operations Senior Secured Term Loan B-3 due December 2025 $2,500 Vistra Operations 4.875% Senior Secured Notes due May 2024 400 Vistra Operations 3.550% Senior Secured
Slide 16: Q2 2023 Retail Metrics
Q2 2023 Retail Metrics Highlights Retail Volume All markets (electric volumes in TWh) • Continued strong performance in Texas: ✓ Well positioned as a result of our core capabilities and diverse 25.1 brand and channel strategies 23.3 ✓ Strong customer acquisition performance through 2.5 1.4 different
Slide 17: Q2 2023 Generation Metrics
Q2 2023 Generation Metrics TOTAL GENERATION1 CAPACITY FACTOR (CCGT) TWhs Q2 2022 Q2 2023 YTD 2022 YTD 2023 % Q2 2022 Q2 2023 YTD 2022 YTD 2023 TEXAS 17.5 21.4 35.2 38.0 TEXAS 44% 59% 39% 47% EAST 11.4 13.9 25.7 28.5 EAST 48% 57% 55% 60% WEST 0.9 0.8 2.1 2.3 WEST 38% 33% 46% 51% SUNSET 4.6 2.8 10.5 6
Slide 18: Capital Expenditures
Capital Expenditures Projected Capital Expenditures1 ($ millions) 2023E Nuclear & Fossil Maintenance2,3 $746 Nuclear Fuel 166 Non-Recurring4 12 Solar & Energy Storage Development 664 Other Growth5 136 Total Capital Expenditures $1,722 Non-Recurring4 (12) Solar & Energy Storage Development (664) Othe
Slide 19: Hedge Profile & Portfolio Sensitivities
Hedge Profile & Portfolio Sensitivities Effective: 6/30/2023 Balance of 2023 2024 TEXAS WEST EAST SUNSET TOTAL TEXAS WEST EAST SUNSET TOTAL Nuclear/Renewable/Coal Gen Position Expected Generation (TWh) 24 - - 12 36 48 - - 26 74 % Hedged 99% - - 96% 98% 97% - - 61% 84% Net Position 0 - - 0 1 1 - - 10
Slide 20: Market Pricing
Market Pricing Effective: 6/30/2023 Jul-Dec'23 2024 Jul-Dec'23 2024 Power (ATC, $/MWh) Spark Spreads ($/mwhr) ERCOT North Hub $56.58 $45.24 Approx. Contrib ution ERCOT West Hub $55.02 $42.59 ERCOT PJM AD Hub $36.69 $42.44 ERCOT North Hub-Houston Ship Channel 90% $33.87 $17.74 PJM Ni Hub $31.43 $36.7
Slide 21: NE/NY and CAISO Market Curves
NE/NY and CAISO Market Curves Curves as of April 29, 2022 and Aug. 4, 2023. Spark spreads calculated using an assumed heat rate of 7.2 mmbtu/MWh with $2.50 variable O&M (VOM) costs (market power price –(7.2 x gas price + VOM)). Market power price weighted as NENY: 75% Mass Hub, 25% NY Zone A. Gas pr
Slide 22: Capacity Positions
Capacity Positions Effective: 6/30/2023 Segment Market Tenor MW Position Average Price Segment Market Tenor MW Position Average Price PJM1 $/mw-day CAISO RTO 2022/2023 3,332 $47.29 2023 1,483 2023/2024 3,296 $35.52 WEST 2024 1,770 2024/2025 3,156 $31.91 2025 1,510 2025/2026 400 $70.40 2026 950 ComEd
Slide 23: Asset Fleet Details
Asset Fleet Details Net Capacity Asset Location ISO Technology Primary Fuel (MW)1 Ennis Ennis, TX ERCOT CCGT Gas 366 Forney Forney, TX ERCOT CCGT Gas 1,912 Hays San Marcos, TX ERCOT CCGT Gas 1,047 Lamar Paris, TX ERCOT CCGT Gas 1,076 Midlothian Midlothian, TX ERCOT CCGT Gas 1,596 Odessa Odessa, TX E
Slide 24: Asset Fleet Details (cont'd)
Asset Fleet Details (cont’d) Net Capacity Asset Location ISO Technology Primary Fuel (MW)1 Independence Oswego, NY NYISO CCGT Gas 1,212 Bellingham Bellingham, MA ISO-NE CCGT Gas 566 Blackstone Blackstone, MA ISO-NE CCGT Gas 544 Casco Bay Veazie, ME ISO-NE CCGT Gas 543 Lake Road Dayville, CT ISO-NE C
Slide 25: ERCOT Legislative Update
ERCOT Legislative Update HB 1500 – Passed • PCM approved; among other things, net cost to ERCOT market limited to $1 billion and participants limited to dispatchable generation; PCM design under construction by PUCT • Firming requirements for facilities (other than batteries) that sign an interconne
Slide 26: Vistra Zero & Sustainability Goals
Vistra Zero & Sustainability Goals VISTRA CORP. 04 Vistra Investor Presentation / Q2 2023 26
Slide 27: Leveraging our existing sites - Vistra Zero Portfolio
Leveraging our existing sites - Vistra Zero Portfolio Disciplined growth of our clean energy portfolio, Vistra Zero, with a focus on diversified generation sources, markets and revenue sources. DeCordova Energy Moss Landing Energy Storage Facility Storage Facility 260 MW/260 MWh 750 MW/3,000 MWh 350
Slide 28: Vistra Zero Portfolio
Vistra Zero Portfolio ~3,750 MW of zero-carbon generation currently online, including 2,400 MW of nuclear generation at Comanche Peak facility; named projects listed below reflect near-term development opportunities Capacity Asset Location ISO Status In-Service Year2 (MW) 1 NUCLEAR 2,400 MW Nuclear
Slide 29: Sustainability: Environmental Stewardship
Sustainability: Environmental Stewardship Vistra’s green-focused targets emphasize its sustainability transition that balances reliability and affordability of power EMISSIONS REDUCTIONS1 PORTFOLIO TRANSFORMATION Scope 1 and Scope 2 GHG Emissions ~3,750 MW2 60% by (in MMtCO2e) of zero-carbon generat
Slide 30: Sustainability: Social Responsibility & Governance
Sustainability: Social Responsibility & Governance Vistra’s Purpose: Lighting up people’s lives, powering a better way forward PEOPLE AND COMMUNITIES GOVERNANCE Diversity, Equity, and Inclusion • Oversight of Vistra’s ESG initiatives is governed by the full Vistra board, with oversight of subject ma
Slide 31: Energy Harbor Acquisition – Announced March 6, 2023
Energy Harbor Acquisition – Announced March 6, 2023 VISTRA CORP. 04 Vistra Investor Presentation / Q2 2023 31
Slide 32: Highlights
Highlights Vision Tradition Leading Zero Carbon Generation and Retail Integrated Platform: “Vistra Vision” • Transaction will combine Energy Harbor’s nuclear and retail businesses with Vistra’s nuclear and retail businesses and Vistra Zero renewables and storage projects under a newly-formed subsidi
Slide 33: Simplified Pro Forma Structure and Key Transaction Terms
Simplified Pro Forma Structure and Key Transaction Terms Transaction Structure Shareholders • Energy Harbor will merge into a subsidiary of Vistra Vision • Vistra will own a controlling 85% ownership interest in Vistra Vision; Nuveen and Avenue Capital will own the remaining 15% Vistra • Structure p
Slide 34: Energy Harbor Overview
Energy Harbor Overview Energy Harbor is an integrated, nuclear generation-focused power company that owns / operates three nuclear plants in PJM as well as a retail power platform in PJM / MISO 908 939 Capacity (MW) 4,048 MW Beaver Valley 1 Perry 933 Beaver Valley 2 Davis-Besse WI 1,268 MI 2 PA 1.8
Slide 35: Combines Two Leading Nuclear Operators
Combines Two Leading Nuclear Operators Energy Harbor and Vistra have extensive experience in safely operating nuclear assets; combination is supported by a comprehensive multi-month diligence process with site visits and third-party assessments ▪ Vistra is currently the fourth largest owner of merch
Slide 36: Transaction Expected to Unlock Significant Synergies
Transaction Expected to Unlock Significant Synergies Vistra, together with its independent consultants, spent months conducting diligence on the Energy Harbor platform to identify areas for optimization Significant Transaction Synergies from Energy Harbor Combination ($M) $125 Demonstrated Track-Rec
Slide 37: Pro Forma Vistra Vision Fleet Asset Details
Pro Forma Vistra Vision Fleet Asset Details Asset Location ISO Capacity (MW)2 Status In-Service Year3 NUCLEAR Comanche Peak Glen Rose, TX ERCOT 2,400 Online 1990 Beaver Valley I & II Shippingport, PA PJM 1,872 Online 1976 / 1987 Perry Perry, Ohio PJM 1,268 Online 1986 Davis-Besse Oak Harbor, Ohio PJ
Slide 38: Scaled Pro Forma Clean Generation Footprint
Scaled Pro Forma Clean Generation Footprint Projected Merchant Nuclear Net Generation for 2023 (TWh)1 Vistra previously ranked #4 with 20 TWh prior to the transaction 169 53 20 2 30 19 18 16 9 33 CEG EH PEG TLN NEE D NRG Projected U.S. Clean Net Generation for 2023 (TWh)1 174 123 3 Vistra previously
Slide 39: Transaction to Increase Zero-Carbon Generation Baseload Capacity
Transaction to Increase Zero-Carbon Generation Baseload Capacity Consolidated Vision Operating & Under Development by Technology 6%1% 6% 1% (GW) 6% 27% 15% Gas Renewables Coal Nuclear 24% 38.4 GW 4.0 GW 8.9 GW 42.4 GW Oil 57% 63% 21% 73% 100% Operating & Under Development by Geography 5% 3% 4% 5% 3%
Slide 40: Nuclear PTC Overview
Nuclear PTC Overview Nuclear assets benefit from the Inflation Reduction Act’s (IRA) nuclear Production Tax Credit (PTC), which creates revenue stability during periods of lower power prices Illustrative Revenue Support PTC Mechanism ($/MWh) $53.31 (2032) • The nuclear PTC is a tax credit that provi
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations VISTRA CORP. 04 Vistra Investor Presentation / Q2 2023 41
Slide 42: Non-GAAP Reconciliations – Q2 2023 Adjusted EBITDA
Non-GAAP Reconciliations – Q2 2023 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED JUNE 30, 2023 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated Closure Consolidated Net income
Slide 43: Non-GAAP Reconciliations – Q2 2023 Adjusted EBITDA
Non-GAAP Reconciliations – Q2 2023 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS SIX MONTHS ENDED JUNE 30, 2023 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated Closure Consolidated Net income (
Slide 44: Non-GAAP Reconciliations – Q2 2022 Adjusted EBITDA
Non-GAAP Reconciliations – Q2 2022 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED JUNE 30, 2022 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated Closure Consolidated $ Net inco
Slide 45: Non-GAAP Reconciliations – Q2 2022 Adjusted EBITDA
Non-GAAP Reconciliations – Q2 2022 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS SIX MONTHS ENDED JUNE 30, 2022 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated Closure Consolidated Net income (
Slide 46: Non-GAAP Reconciliations – 2023 Guidance
Non-GAAP Reconciliations – 2023 Guidance VISTRA CORP. – NON-GAAP RECONCILIATIONS 2023 GUIDANCE1 (Unaudited) (Millions of Dollars) Ongoing Operations Asset Closure Vistra Consolidated Low High Low High Low High Net Income (loss) 2,240 2,530 (70) 30 2,170 2,560 Income tax expense 630 740 0 0 630 740 I
Slide 47: Non-GAAP Reconciliations – 2023 Guidance
Non-GAAP Reconciliations – 2023 Guidance VISTRA CORP. – NON-GAAP RECONCILIATIONS 2023 GUIDANCE1 FOOTNOTES (Unaudited) (Millions of Dollars) 1 Regulation G Table for 2023 Guidance prepared as of August 9, 2023. (a) Includes unrealized (gain) / loss on interest rate swaps of $(1) million (b) Includes