Vistra Corp. · NYSE:VST
Vistra — Q1 2020 Earnings Presentation
33 slides from Vistra's earnings presentation, May 5, 2020
Slide 1: First Quarter 2020 Results
May 5, 2020 First Quarter 2020 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 impacts, reorganization items, and certain other items described from
Slide 4: Agenda
AGENDA I Welcome and Safe Harbor Molly Sorg, VP Investor Relations and Chief Sustainability Officer II COVID-19 Response and Impacts Curt Morgan, President and Chief Executive Officer III First Quarter 2020 Financial Highlights David Campbell, Executive Vice President and Chief Financial Officer V i
Slide 5: COVID-19 Response and Impacts
COVID-19 Response and Impacts Curt Morgan Chief Executive Officer V i s t ra I nv es t or P res ent at ion / Q1 2020
Slide 6: COVID-19: Vistra Response
COVID-19: VISTRA RESPONSE Vistra took actions early in the year to prepare our operations for a COVID -19 environment, putting Vistra in a position of relative strength while ensuring the health and safety of our employees and our ability to provide safe, reliable electricity to our customers • Oper
Slide 7: COVID-19: Key Takeaways
COVID-19: KEY TAKEAWAYS Vistra believes it is well-positioned to continue to deliver strong results in 2020 and is reaffir ming 2020 guidance ~99% hedged to direct commodity price risk for the balance of 2020, limiting the impact of changes in commodity prices on 2020 results ~90% of Retail EBIT
Slide 8: COVID-19: Observed Demand by Market
COVID-19: OBSERVED DEMAND BY MARKET Through mid-April, the range of observed demand declines has been more pronounced in the Midwest and Northeast markets while ERCOT has been relatively resilient Range of Observed Demand Declines thru Mid-April1 ERCOT Base ERCOT Peak PJM ISO-NE NYISO CAISO MISO 0%
Slide 9: COVID-19: Generation Segment
COVID-19: GENERATION SEGMENT Though demand is expected to be lower than pre-COVID-19 forecasts across all markets, actions taken by Vistra’s commercial team have put the company in a strong position heading into the COVID-19-led economic downturn • Generation Segment Outlook – Vistra’s generation se
Slide 10: COVID-19: Retail Segment
COVID-19: RETAIL SEGMENT With ~90% of Retail EBITDA derived from the Residential and Mass Business customer classes, Vistra believes it is well-positioned to continue to deliver strong results in 2020 BAD DEBT COMMERCIAL AND INDUSTRIAL • Expect an increase in ERCOT bad debt • Expect a negative impac
Slide 11: Reaffirming 2020 Guidance
REAFFIRMING 2020 GUIDANCE We expect Vistra’s integrated retail and generation business model to once again demonstrate its relative stability in 2020 – tracking strong 2020 Guidance: Adjusted EBITDA1 $3,285 – $3,585 RETAIL BAD DEBT: Ongoing Operations COVID 19 IMPACT ($ millions) Adjusted FCFbG1,2 $
Slide 12: COVID-19: Future Market Impacts
COVID-19: FUTURE MARKET IMPACTS We expect the decreased demand from COVID-19 could have offsetting impacts in the markets where we operate ERCOT PJM and ISO-NE • Renewable development likely to slow • No new thermal development – We are observing a slowdown in renewable – Current environment does no
Slide 13: COVID-19: 2021 Outlook
COVID-19: 2021 OUTLOOK Vistra currently expects its 2021 Ongoing Operations Adj. EBITDA to be within 10 percent of the 2020 guidance midpoint, with a meaningful possibility to achieve flat year -over-year results • 2021 Variables – Given the uncertainty introduced by COVID-19, Vistra expects a range
Slide 14: First Quarter 2020 Financial Highlights
First Quarter 2020 Financial Highlights David Campbell Chief Financial Officer V i s t ra I nv es t or P res ent at ion / Q1 2020
Slide 15: Q1 2020 Financial Results
Q1 2020 FINANCIAL RESULTS Vistra delivered first quarter 2020 results ahead of management expectations ONGOING OPERATIONS HIGHLIGHTS ADJUSTED EBITDA1 Q1 2020 Ongoing Ops Adj. EBITDA1: $850 million ($ millions) • $26 million higher than 1Q19 results driven by the acquisitions of 850 Ambit and Crius p
Slide 16: Capital Allocation
CAPITAL ALLOCATION Vistra is committed to achieving its long-term leverage target with significant debt reduction in 2020; despite COVID-19, a long-term capital allocation plan, including significant annual return of capital to shareholders, expected to be announced in September 2020 • Priority to r
Slide 17: Appendix
Appendix V i s t ra I nv es t or P res ent at ion / Q1 2020
Slide 18: Corporate Debt Profile
CORPORATE DEBT PROFILE ($ millions) Q1 2020 2020E Term Loan B and Funded Revolver1 $3,293 $2,572 Senior Secured Notes 3,100 3,100 Senior Unsecured Notes2 4,266 3,600 Other3 675 573 Total Long-Term Debt $11,334 $9,845 Less: cash and cash equivalents4 (742) (400) Total Net Debt $10,592 $9,445 Adjusted
Slide 19: Select Debt Balances
SELECT DEBT BALANCES FUNDED DEBT TRANCHES As of March 31, 20201 ($ millions) Issuer Series Principal Outstanding Secured Debt Vistra Operations Senior Secured Revolving Credit Loans2 $700 Vistra Operations Senior Secured Term Loan B-3 due December 2025 2,593 Vistra Operations 3.550% Senior Secured N
Slide 20: Capital Expenditures
CAPITAL EXPENDITURES CAPITAL EXPENDITURES ($ millions) 2020E Nuclear & Fossil Maintenance1,2 $533 Nuclear Fuel 85 Non-Recurring3 3 Growth4 315 Total Capital Expenditures $935 Non-Recurring3 (3) Growth4 (315) Adjusted Capital Expenditures $618 1 Reflects LTSA expenditures in the year installed (exclu
Slide 21: First Quarter Retail Metrics
FIRST QUARTER RETAIL METRICS Q1 2020 RETAIL HIGHLIGHTS RETAIL VOLUME All markets (electric volumes in TWh) 21.0 ✓ Weather for the quarter was consistently mild in all regions, including the mildest January on record for 3.0 16.3 much of the Midwest and Northeast 2.3 ✓ Maintained customer pricing dis
Slide 22: First Quarter Generation Metrics
FIRST QUARTER GENERATION METRICS TOTAL GENERATION CAPACITY FACTOR (CCGT) TWhs Q1 2019 Q1 2020 % Q1 2019 Q1 2020 ERCOT 20.1 19.7 ERCOT 49% 51% PJM 14.5 12.3 PJM 74% 72% NY/NE 4.9 3.7 NY/NE 49% 36% MISO 4.7 2.9 MISO -- -- CAISO 1.6 1.5 CAISO 72% 69% Ong. Ops 48.2 40.1 Asset Closure 2.4 0 CAPACITY FACT
Slide 23: Hedge Profile & Portfolio Sensitivities
HEDGE PROFILE & PORTFOLIO SENSITIVITIES Effective: 3/31/2020 Balance 2020 2021 MISO/ MISO/ ERCOT PJM NENY TOTAL ERCOT PJM NENY TOTAL CAISO CAISO Coal/Nuclear/Renewable Gen Position Expected Generation (TWh) 37 13 - 11 60 48 18 - 16 81 % Hedged 100% 100% - 100% 100% 73% 95% - 44% 72% Net Position 0 0
Slide 24: Market Pricing
MARKET PRICING Effective: 3/31/2020 Apr-Dec'20 2021 Apr-Dec'20 2021 Power (ATC, $/MWh) Spark Spreads ($/mwhr) ERCOT North Hub $32.04 $30.56 Approx. Contribution ERCOT West Hub $30.26 $28.68 ERCOT PJM AD Hub $22.16 $25.95 ERCOT North Hub-Houston Ship Channel 90% $15.37 $10.59 PJM Ni Hub $19.15 $22.12
Slide 25: Capacity Positions – PJM
CAPACITY POSITIONS – PJM (excludes MISO Imports) PJM Region Planning Year Average Price MW Position Average Price MW Position ($/MW-day) ($/MW-day) Legacy/Base Product Capacity Performance Product 2019 – 2020 $173.56 539 $97.33 4,852 RTO 2020 – 20211 N/A N/A $86.84 5,458 2021 – 2022 N/A N/A $140.00
Slide 26: 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 $6.81/kw-Mo 3,325 June 2019 to May 2020 $5.35/kw-Mo 3,121 June 2020 to May 2021 $4.57/kw-Mo 2,968 June 2021 to May 2022 $3.92/kw-Mo 3,091 June 2022 to May 2023 $2.16/kw-Mo 2,5
Slide 27: Capacity Position – MISO
CAPACITY POSITION – MISO MISO Capacity Position Price in $/kw-mo Total Capacity Revenue PY 19/201 MWs 2,542 Average Price $3.72 $114 MM PY 20/21 2 MWs 2,190 Average Price $3.68 $97 MM PY 21/222 MWs 1,266 Average Price $4.84 $74 MM Note: Capacity positions represent volumes cleared and purchased in p
Slide 28: Asset Fleet Details
ASSET FLEET DETAILS Asset Location ISO Technology Primary Fuel Net Capacity (MW)1 Ownership Interest2 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,
Slide 29: Asset Fleet Details (Cont'd)
ASSET FLEET DETAILS (CONT’D) Asset Location ISO Technology Primary Fuel Net Capacity (MW)1 Ownership Interest2 Independence Oswego, NY NYISO CCGT Gas 1,212 100% TOTAL NYISO 1,212 Bellingham Bellingham, MA ISO-NE CCGT Gas 566 100% Blackstone Blackstone, MA ISO-NE CCGT Gas 544 100 Casco Bay Veazie, ME
Slide 30: Non-GAAP Reconciliations – Q1 2020 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q1 2020 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED MARCH 31, 2020 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated Net Income
Slide 31: Non-GAAP Reconciliations – Q1 2019 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q1 2019 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED MARCH 31, 20191 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated Net Income
Slide 32: Non-GAAP Reconciliations – 2020 Guidance
NON-GAAP RECONCILIATIONS – 2020 GUIDANCE VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS 2020 GUIDANCE1 (Unaudited) (Millions of Dollars) Ongoing Operations Asset Closure Vistra Consolidated Low High Low High Low High Net Income (loss) 849 1,081 (95) (75) 754 1,006 Income tax expense 252 320 - - 252
Slide 33: End Slide
END SLIDE V i s t ra I nv es t or P res ent at ion / Q1 2020