Slide 1: Fourth Quarter and Full Year 2018 Results
February 28, 2019 Fourth Quarter and Full Year 2018 R E S U LT S
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: Safe Harbor Statements (Cont'd)
SAFE HARBOR STATEMENTS (CONT’D) Information About Non-GAAP Financial Measures and Items Affecting Comparability "Adjusted EBITDA" (EBITDA as adjusted for unrealized gains or losses from hedging activities, tax receivable agreement obligations, reorganization items, and certain other items described
Slide 4: Agenda
AGENDA I Welcome and Safe Harbor Molly Sorg, VP Investor Relations II 2018 Highlights Curt Morgan, President and Chief Executive Officer III Current Topics Jim Burke, Executive Vice President and Chief Operating Officer IV Financial Highlights Bill Holden, Executive Vice President and Chief Financia
Slide 5: 2018 Highlights
2018 Highlights Curt Morgan Chief Executive Officer V i s t ra E n e rg y I n v e s t o r P re s e n t a t i o n / Q4 2018
Slide 6: 2018 Financial and Business Highlights
2018 FINANCIAL AND BUSINESS HIGHLIGHTS 2018 Financial Results1 Ongoing Operations Adjusted EBITDA $2,809 million1 nearly 60% Adjusted FCFbG $1,611 million1 FCF Conversion • Ongoing Operations Adjusted EBITDA1: – Excludes net investment in partial buybacks of Odessa earnout in February and May ($2,79
Slide 7: Merger Value Lever Targets on Track
MERGER VALUE LEVER TARGETS ON TRACK Synergy and OPI value lever target remains at $565 million per year – potential OPI upside remaining; after-tax, annual free cash flow value levers increased to $310 million 1 SYNERGY ADJ. EBITDA OPI ADJ. EBITDA VALUE LEVERS ($mm) VALUE LEVERS ($mm) $290 $275 $275
Slide 8: 2019: Year of Execution
2019: YEAR OF EXECUTION Vistra is focused on achieving its financial and leverage targets, returning capital to shareholders, and meeting or exceeding its DYN and Crius synergy targets 2019 Guidance Reaffirmed Ongoing Operations ($ millions) Adjusted EBITDA $3,220 – $3,4201 66% Adjusted FCFbG $2,100
Slide 9: Markets Updates
MARKETS UPDATES ERCOT ORDC Reform • Public Utility Commission of Texas (PUCT) approved measured incremental changes to ERCOT’s scarcity pricing formula – also known as the Operating Reserve Demand Curve (ORDC) – Simplified the ORDC from 24 different curves (for different seasons and time of day) to
Slide 10: Current Topics: Crius Acquisition
Current Topics: Crius Acquisition Jim Burke Chief Operating Officer V i s t ra E n e rg y I n v e s t o r P re s e n t a t i o n / Q4 2018
Slide 11: Key Transaction Highlights
KEY TRANSACTION HIGHLIGHTS Vistra is executing on its strategy of selective, value -accretive Retail acquisitions with its agreement to purchase Crius Energy Trust VALUE CREATION • ~4x 2019E EV/EBITDA pro forma for run-rate synergies • Exceeds Vistra’s investment threshold of mid-to-high teens unlev
Slide 12: Crius: A Leading Retail Energy Provider
CRIUS: A LEADING RETAIL ENERGY PROVIDER With ~1 million residential customer equivalents, Crius represents a family of brands with differentiated value propositions and diversified market channels across a national footprint HIGH-GROWTH, HIGH-MARGIN INNOVATIVE SALES AND RETAIL STRATEGY MARKETING CHA
Slide 13: Expanding Retail Gas Product Portfolio
EXPANDING RETAIL GAS PRODUCT PORTFOLIO As one of the largest purchasers of natural gas in the nation, expanding Vistra’s retail gas product offering complements existing commercial operations with higher margin opportunity Coal 11 Retail Electricity and Gas TWh Nuclear Natural Gas & Retail Electrici
Slide 14: Integrated Operations
INTEGRATED OPERATIONS Following the closing of the Crius acquisition Vistra expects it will be 45-55% matched in its core operating markets of ERCOT, PJM, and ISO -NE, resulting in increased sales to its retail subsidiaries, the highest margin channel for wholesale length CHANNELS TO SELL VISTRA ENE
Slide 15: Financial Highlights
Financial Highlights Bill Holden Chief Financial Officer V i s t ra E n e rg y I n v e s t o r P re s e n t a t i o n / Q4 2018
Slide 16: 2018 Financial Results
2018 FINANCIAL RESULTS Vistra delivered strong full year 2018 financial results with Ongoing Operations Adjusted EBITDA above consensus and Adjusted FCFbG above high -end of guidance range ONGOING OPERATIONS HIGHLIGHTS ADJUSTED EBITDA1 2018 Ongoing Operations Adj. EBITDA1: $2,809 million ($ in milli
Slide 17: Hedge Profile – ERCOT
HEDGE PROFILE – ERCOT NATURAL GAS HEDGE PROFILE HEAT RATE HEDGE PROFILE 93% 99% 91% 88% 78% 57% 42% 28% 12/29/17 3/30/18 11 3/30/18 6/29/18 3/30/18 12/29/17 11 9/30/18 3/30/18 6/29/18 12/31/18 12/29/17 3/30/18 9/30/18 12/31/18 9/30/18 6/29/18 3/30/18 12/31/18 3/30/18 12/29/17 9/30/18 6/29/18 3/30/18
Slide 18: Hedge Profile – Other Markets
HEDGE PROFILE – OTHER MARKETS GENERATION VOLUMES HEDGED (2019) GENERATION VOLUMES HEDGED (2020) MISO/CAISO NENY PJM MISO/CAISO NENY PJM 87% 81% 77% 75% 65% 58% 57% 37% 35% 29% 25% 21% 9/28 12/31 9/28 12/31 9/28 12/31 9/28 12/31 9/28 12/31 9/28 12/31 NATURAL GAS MARGIN SENSITIVITY1 HEAT RATE MARGIN S
Slide 19: Capital Structure
CAPITAL STRUCTURE Vistra remains on track to achieve its long-term leverage target of ~2.5x net debt to EBITDA by year-end 2020 ($ in millions) 2018A 2019E Term Loan B $5,813 $5,754 1 Senior Notes 4,627 3,827 Other2 719 603 3 Total Long Term Debt $11,159 $10,184 Less: cash and cash equivalents4 (693
Slide 20: Q&A
Q&A V i s t ra E n e rg y I n v e s t o r P re s e n t a t i o n / Q4 2018
Slide 21: Appendix
Appendix V i s t ra E n e rg y I n v e s t o r P re s e n t a t i o n / Q4 2018
Slide 22: Q4 Results Comparison
Q4 RESULTS COMPARISON ONGOING OPERATIONS ADJUSTED EBITDA1 ($ in millions) $719 $291 Q4 2017 Q4 2018 Adj. EBITDA by segment Q4 2017 Q4 2018 Variance Segment Drivers ($ in millions) Retail 207 250 43 Retail shaping and Dynegy assets contribution ERCOT 95 139 44 Unit performance, lower operating costs,
Slide 23: Capital Expenditures
CAPITAL EXPENDITURES CAPITAL EXPENDITURES1 2018A - 2019E ($ in millions) Illustrative 2018E 2018A Pro forma for 2019E 1-1-18 close Nuclear & Fossil Maintenance2 $208 $288 $432 Nuclear Fuel 118 118 74 Non-Recurring3 70 70 80 Growth -- -- 43 Total Capital Expenditures $396 $476 $629 Non-Recurring3 (70
Slide 24: Select Debt Balances
SELECT DEBT BALANCES FUNDED DEBT TRANCHES As of December 31, 20181 ($ in millions) Pro forma for January 5.625% note issuance and February tender offer and note redemptions Issuer Series Principal Outstanding Secured Facilities Vistra Operations Senior Secured Term Loan B-1 due August 2023 $2,793 Vi
Slide 25: Fourth Quarter Retail Metrics
FOURTH QUARTER RETAIL METRICS Q4 2018 RETAIL HIGHLIGHTS RETAIL VOLUME (GWh) By Type Robust financial and operating performance 16,054 continued in Q4 and wrapped up a strong 2018 2,783 8,965 9,676 ✓ Demonstrated pricing discipline and risk 8,752 management capabilities in higher power cost 4,489 5,1
Slide 26: Fourth Quarter Generation Metrics
FOURTH QUARTER GENERATION METRICS TOTAL GENERATION CAPACITY FACTOR (CCGT) TWhs Q4 2017 Q4 2018 YTD 2017 YTD 20181 % Q4 2017 Q4 2018 YTD 2017 YTD 20181 ERCOT 15.8 22 61.5 85.7 ERCOT 56% 54% 52% 59% PJM -- 13.9 -- 40.5 PJM -- 64% -- 68% NY/NE -- 4.7 -- 14.6 NY/NE -- 46% -- 48% MISO -- 6.1 -- 21.3 MISO
Slide 27: Commercial Operations
COMMERCIAL OPERATIONS Hub ATC Price Premium Discount ($/MWh) ERCOT PJM 48 96 48 96 38 $34.10 ~ 84 TWhs 76 38 $33.84 76 $4.10 28 56 28 56 ~54 TWhs 18 36 18 $34.92 36 $30.00 8 16 8 16 -2 (4) $(1.08) -2 (4) 2018 Realized 2018 Realized 2018 Generation 2018 Generation Price Price ISO-NE / NY MISO / CAISO
Slide 28: Commercial Operations
COMMERCIAL OPERATIONS Hub ATC Price Forecasted Premium Forecasted Discount ($/MWh) ERCOT PJM 48 95 48 95 48 96 48 96 38 $36.84 ~ 91 TWhs 75 38 $37.57 ~ 86 TWhs 75 38 76 38 76 $0.44 $6.07 $30.59 $30.20 28 55 28 55 28 56 28 $0.15 56 ~ 57 TWhs ~ 57 TWhs 18 $36.40 35 18 35 18 36 18 36 $31.50 $31.34 $30.
Slide 29: Market Pricing – ERCOT
MARKET PRICING – ERCOT MONTHLY NORTH HUB ATC POWER PRICES¹ IMPLIED NORTH HUB ATC MARKET HEAT RATES 120 August 19 37 August 19 $99.83 33 35.25 August 20 August 20 30.30 100 $77.53 29 (mmBtu/MWh) 80 25 ($/MWh) 60 21 $34.67 17 40 $26.58 11.53 13 9.28 20 9 0 5 2017A 2018A 2019F 2020F 2017A 2018A 2019F 2
Slide 30: Market Pricing – Other Markets
MARKET PRICING – OTHER MARKETS MONTHLY AD HUB ATC POWER PRICES MONTHLY INDIANA HUB ATC POWER PRICES 60 60 50 50 40 40 ($/MWh) ($/MWh) 30 30 20 20 10 10 - - 2017A 2018A 2019F 2020F 2017A 2018A 2019F 2020F Settled 9/28/2018 Forward 12/31/2018 Forward Settled 9/28/2018 Forward 12/31/2018 Forward MONTHL
Slide 31: Capacity Position – MISO
CAPACITY POSITION – MISO MISO Capacity Position (excludes PJM exports) Price in $/kw-mo Total EBITDA Contribution PY 18/19 MWs 2,533 Average Price $3.32 $101 MM PY 19/20 MWs 2,047 Average Price $3.86 $95 MM PY 20/21 MWs 1,663 Average Price $4.06 $81 MM PY 21/22 MWs 667 Average Price $4.10 $33 MM MIS
Slide 32: Capacity Positions – PJM (excludes MISO Imports)
CAPACITY POSITIONS – PJM (excludes MISO Imports) PJM Region Planning Year Average Price MW Position Average Price MW Position ($/MW-day) ($/MW-day) Legacy/Base Product Capacity Performance Product 2018 – 2019 $199.39 948 $165.13 4,599 2019 – 2020 $169.50 552 $100.27 4,684 RTO 2020 – 20211 N/A N/A $9
Slide 33: Capacity Positions – ISO-NE / NYISO / CAISO
CAPACITY POSITIONS – ISO-NE / NYISO / CAISO ISO/Region Contract Type Average Price MW Position Tenor ISO-NE1 ISO-NE Capacity $9.80/kw-Mo 3,347 June 2018 to May 2019 $7.02/kw-Mo 3,236 June 2019 to May 2020 $5.40/kw-Mo 3,229 June 2020 to May 2021 $4.80/kw-Mo 2,762 June 2021 to May 2022 $3.92/kw-Mo 3,2
Slide 34: Asset Fleet Details
ASSET FLEET DETAILS Asset Location ISO Technology Primary Fuel Net Capacity Ownership Interest Moss Landing 1 & 2 Moss Landing, CA CAISO CCGT Gas 1,020 100% Oakland Oakland, CA CAISO CT Oil 165 100 TOTAL CAISO 1,185 Forney Forney, TX ERCOT CCGT Gas 1,912 100% Lamar Paris, TX ERCOT CCGT Gas 1,076 100
Slide 35: Asset Fleet Details (Cont'd)
ASSET FLEET DETAILS (CONT’D) Asset Location ISO Technology Primary Fuel Net Capacity Ownership Interest Independence Oswego, NY NYISO CCGT Gas 1,212 100% TOTAL NYISO 1,212 Bellingham Bellingham, MA ISO-NE CCGT Gas 566 100% Bellingham NEA Bellingham, MA ISO-NE CCGT Gas 157 50 Blackstone Blackstone, M
Slide 36: Non-GAAP Reconciliations – Q4 2018 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q4 2018 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED DECEMBER 31, 2018 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated N
Slide 37: Non-GAAP Reconciliations – Q4 2017 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q4 2017 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED DECEMBER 31, 2017 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Vistra Energy Retail ERCOT Operations Asset Closure Corp and Other Consolidated Consolidated Net Income (los
Slide 38: Non-GAAP Reconciliations – 2018 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – 2018 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS FOR YEAR ENDED DECEMBER 31, 2018 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated Net Inco
Slide 39: Non-GAAP Reconciliations – 2018 Adjusted FCFbG
NON-GAAP RECONCILIATIONS – 2018 ADJUSTED FCFbG VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS FOR YEAR ENDED DECEMBER 31, 2018 (Unaudited) (Millions of Dollars) Ongoing Operations Vistra Energy Asset Closure Consolidated Consolidated Adjusted EBITDA 2,809 (49) 2,760 Interest paid, net (a) (636) - (6
Slide 40: Non-GAAP Reconciliations – 2019 Guidance
NON-GAAP RECONCILIATIONS – 2019 GUIDANCE VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS 2019 GUIDANCE (Unaudited) (Millions of Dollars) Ongoing Operations Asset Closure Vistra Energy Consolidated Low High Low High Low High Net Income (loss) 993 1,149 (66) (56) 927 1,093 Income tax expense (benefit)
Slide 41: End Slide
VICTDA owe = ENERGY END SLIDE