Slide 1: Third Quarter 2019 Results
November 5, 2019 Third Quarter 2019 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 Q3 2019 Highlights and 10-Year Fundamental Outlook Curt Morgan, President and Chief Executive Officer III Financial Highlights David Campbell, Executive Vice President and Chief Financial Officer Vi s tra Energy Inv es t or Pres e
Slide 5: Q3 2019 Highlights
Q3 2019 Highlights Curt Morgan Chief Executive Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q3 2019
Slide 6: Q3 2019 Financial Highlights
Q3 2019 FINANCIAL HIGHLIGHTS Q3 2019 Financial Results Ongoing Operations ($ millions) Q3 2019 Adjusted EBITDA1 $1,064 YTD 2019 Adjusted EBITDA1 $2,586 • Third quarter and year-to-date results are in-line with management expectations Narrowing and Raising 2019 Guidance Ongoing Operations ($ millions
Slide 7: Initiating 2020 Guidance
INITIATING 2020 GUIDANCE Initiating 2020 Guidance Ongoing Operations ($ millions) 2020 Illustrative 20202 Adjusted EBITDA1 $3,285 – $3,585 $3,355 – $3,655 Adjusted FCFbG1 $2,160 – $2,460 $2,230 – $2,530 FCF Conversion ~67% • 2020 guidance includes expected ($70) million in-year impact from execution
Slide 8: ERCOT Summer and Forward Curves
ERCOT SUMMER AND FORWARD CURVES ERCOT 2020 and 2021 forward curves rose following August and September volatility, with the greatest increase observed in 2020 forwards heading into the start of the delivery year Price Volatility Summer Performance • Sharp uplift in pricing observed as delivery year
Slide 9: Increasing OPI Value Lever Targets
INCREASING OPI VALUE LEVER TARGETS OPI value lever target increased to $425M/year, reflecting an additional $50M/year of opportunity identified in ongoing fleet operations plus an expected EBITDA annual uplift of a net $100M from required MISO plant retirements; Vistra’s merger value lever target is
Slide 10: 10-Year Fundamental Outlook
10-Year Fundamental Outlook Curt Morgan Chief Executive Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q3 2019
Slide 11: Vistra 10-Year Fundamental Outlook
VISTRA 10-YEAR FUNDAMENTAL OUTLOOK We believe Vistra’s integrated business is well -positioned for success over the next decade and beyond • Vistra has announced a goal to reduce CO2 equivalent emissions by more than 50% by 2030 as compared to a 2010 baseline ‒ Vistra has already retired, or announc
Slide 12: ERCOT 10-Year Perspective
ERCOT 10-YEAR PERSPECTIVE ERCOT Demand Growth Additional Capacity Retirements 2019-30E, GW • Since 2008, ERCOT has added ~36.5 • Generation supply stack includes ~15 GW of capacity - 15.9 GW of thermal GW of generation potentially at risk of generation and 20.6 GW of retirement. Vistra modeled retir
Slide 13: Example of ERCOT Scarcity Pricing
EXAMPLE OF ERCOT SCARCITY PRICING AUGUST 15, 2019 Intermittency of generation resources is a key driver of scarcity pricing events in ERCOT ERCOT MARKET DYNAMICS August 15, 2019 Highlights AUGUST 15, 2019 All-time Peak Peak Price ERCOT demand levels were in the Demand 74,666 MW $9,000/MWh seasonally
Slide 14: ERCOT 2019 Backcast
ERCOT 2019 BACKCAST Given the high penetration of renewables, scarcity events are likely to continue in ERCOT Number of Days with 100°F + in Dallas, 97°F + in Houston 2010-19 ✓ 2019 was not an outlier of extreme temperature days ✓ Average temperatures do not cause scarcity/ORDC events, rather it is
Slide 15: PJM 10-Year Perspective
PJM 10-YEAR PERSPECTIVE On Peak Spark Spread Capacity Prices $/MWh $/MW-Day 25 250 20 200 150 15 100 10 50 5 0 0 2016 2017 2018 2019 ComEd Western/RTO EMAAC ComEd RTO EMAAC • Vistra’s fundamental analysis results in expectations of flat to gradually rising overall energy and capacity pricing in PJM,
Slide 16: Growth Opportunities vs. EBITDA at Risk
GROWTH OPPORTUNITIES VS. EBITDA AT RISK Investing an average of $500M/year over the next 10 years would result in a growing EBITDA profile that more than offsets the impact of potential future retirements while leaving significant excess cash to retur n to shareholders Illustrative Cash Generation •
Slide 17: Financial Highlights
Financial Highlights David Campbell Chief Financial Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q3 2019
Slide 18: Q3 2019 Financial Results
Q3 2019 FINANCIAL RESULTS Vistra executed well in the third quarter, delivering strong year -to-date results that are in-line with management expectations ONGOING OPERATIONS HIGHLIGHTS ADJUSTED EBITDA1 ($ millions) Q3 Ongoing Operations Adj. EBITDA1: $1,064 million 2,586 • $89M lower than 3Q18 resul
Slide 19: Narrowing and Updating 2019 Guidance
NARROWING AND UPDATING 2019 GUIDANCE Vistra’s integrated business once again demonstrated its stability, delivering solid results in the third quarter of 2019 and positioning the company for a strong year 2019E Guidance Prior Current 2019E Illustrative2 ($ millions) (November 2018) (November 2019) G
Slide 20: Initiating 2020 Guidance
INITIATING 2020 GUIDANCE 2020 is poised to be another strong year, with ongoing operations adjusted EBITDA forecast to be approximately $3.5 billion when excluding the in -year estimated impacts of NPV-positive, long-dated contracts with retail customers 2020E Guidance Initiating 2020E Illustrative2
Slide 21: Capital Allocation
CAPITAL ALLOCATION Vistra is committed to executing on previously-announced capital allocation plan Share Repurchase Program Dividend Program Leverage Target Focused on reducing debt to $335M Paid quarterly dividend of achieve long-term leverage target of of authorized $1.75B remains available for r
Slide 22: Q&A
Q&A Vi s tra Energy Inv es t or Pres en t a ti o n / Q3 2019
Slide 23: Appendix
Appendix Vi s tra Energy Inv es t or Pres en t a ti o n / Q3 2019
Slide 24: Corporate Debt Profile
CORPORATE DEBT PROFILE ($ millions) 9/30/19 2019E 2020E Term Loan B $3,798 $3,798 $3,798 Senior Secured Notes 2,000 2,000 2,000 Senior Notes1 4,734 4,347 3,600 Other2 957 1,020 420 Total Long Term Debt3 $11,489 $11,165 9,818 Less: cash and cash equivalents4 (707) (400) (400) Total Net Debt $10,782 $
Slide 25: Select Debt Balances
SELECT DEBT BALANCES FUNDED DEBT TRANCHES As of September 30, 20191 ($ millions) Issuer Series Principal Outstanding Secured Debt Vistra Operations Senior Secured Term Loan B-1 due August 2023 $1,897 Vistra Operations Senior Secured Term Loan B-3 due December 2025 1,901 Vistra Operations 3.550% Seni
Slide 26: Capital Expenditures
CAPITAL EXPENDITURES CAPITAL EXPENDITURES1 2019E - 2020E ($ millions) 2019E 2020E Nuclear & Fossil Maintenance2 $362 $533 Nuclear Fuel 81 85 Non-Recurring3 81 3 Growth 27 42 Total Capital Expenditures $551 $663 Non-Recurring3 (81) (3) Growth (27) (42) Adjusted Capital Expenditures $443 $618 1 Exclud
Slide 27: Third Quarter Retail Metrics
THIRD QUARTER RETAIL METRICS Q3 2019 RETAIL HIGHLIGHTS RETAIL VOLUME All markets (electric volumes in TWh) ✓ Closed the Ambit acquisition on 11/1, further diversifying 28.2 Retail marketing channels while adding ~$125M annual 24.4 3.4 adjusted EBITDA (on a full run-rate synergy basis) 21.3 2.2 2.6 3
Slide 28: Asset Closure Segment
ASSET CLOSURE SEGMENT Asset Closure cash flows forecast to decline meaningfully post -2022; forecast does not include optimization of cash expenditures and potential value from sales of property Asset Closure Segment Adj. FCF Projections1 ($ millions) 2020 2021 2022 2023 2024 2025 2026 2027 2028 202
Slide 29: Third Quarter Generation Metrics
THIRD QUARTER GENERATION METRICS TOTAL GENERATION CAPACITY FACTOR (CCGT) TWhs Q3 2018 Q3 2019 YTD 20181 YTD 2019 % Q3 2018 Q3 2019 YTD 20181 YTD 2019 ERCOT 26.2 26.2 63.7 65.2 ERCOT 68% 70% 60% 56% PJM 15.4 14.4 26.7 39.5 PJM 68% 76% 67% 70% NY/NE 6.0 5.0 9.8 13.6 NY/NE 55% 47% 48% 44% MISO 8.3 7.0
Slide 30: Hedge Profile & Portfolio Sensitivities
HEDGE PROFILE & PORTFOLIO SENSITIVITIES Effective: 9/30/2019 Balance of 2019 2020 MISO/ MISO/ ERCOT PJM NENY TOTAL ERCOT PJM NENY TOTAL CAISO CAISO Coal/Nuclear/Renewable Gen Position Expected Generation (TWh) 13 3 - 6 23 50 19 - 17 86 % Hedged 100% 100% - 95% 99% 100% 92% - 98% 98% Net Position 0 0
Slide 31: Market Pricing
MARKET PRICING Effective: 9/30/2019 Oct-Dec'19 2020 Oct-Dec'19 2020 Power (ATC, $/MWh) Spark Spreads ($/mwhr) ERCOT North Hub $22.74 $33.22 Approx. Contribution ERCOT West Hub $20.81 $31.41 ERCOT PJM AD Hub $28.10 $28.53 ERCOT North Hub-Houston Ship Channel 90% $3.55 $13.91 PJM Ni Hub $23.29 $24.27
Slide 32: Market Pricing – ERCOT
MARKET PRICING – ERCOT MONTHLY NORTH HUB ATC POWER PRICES IMPLIED NORTH HUB ATC MARKET HEAT RATES August 19 75 August 19 140 $131.48 62.74 65 120 August 20 August 20 $98.83 55 (mmBtu/MWh) 100 42.65 ($/MWh) 45 80 60 35 $34.67 25 40 $26.58 9.28 11.53 20 15 - 5 2017A 2018A 2019E 2020F 2017A 2018A 2019E
Slide 33: Market Pricing – Other Markets
MARKET PRICING – OTHER MARKETS MONTHLY AD HUB ATC POWER PRICES MONTHLY INDIANA HUB ATC POWER PRICES 60 60 50 50 40 40 ($/MWh) ($/MWh) 30 30 20 20 10 10 - - 2017A 2018A 2019E 2020F 2017A 2018A 2019E 2020F Settled 6/28/2019 Forward 9/30/2019 Forward Settled 6/28/2019 Forward 9/30/2019 Forward MONTHLY
Slide 34: Capacity Position – MISO
CAPACITY POSITION – MISO MISO Capacity Position (excludes PJM exports) Price in $/kw-mo Total Capacity Revenue PY 18/19 MWs 2,571 Average Price $3.24 $100 MM PY 19/20 MWs 2,127 Average Price $3.69 $94 MM PY 20/21 MWs 1,809 Average Price $3.79 $82 MM PY 21/22 MWs 685 Average Price $4.13 $34 MM MISO E
Slide 35: Capacity Positions – PJM (excludes MISO Imports)
CAPACITY POSITIONS – PJM (excludes MISO Imports) PJM Region Planning Year Average Price MW Position Average Price MW Position ($/MW-day) ($/MW-day) Legacy/Base Product Capacity Performance Product 2018 – 2019 $199.39 948 $165.13 4,599 2019 – 2020 $179.49 520 $126.87 4,797 RTO 2020 – 20211 N/A N/A $9
Slide 36: 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 $9.70/kw-Mo 3,395 June 2018 to May 2019 $6.91/kw-Mo 3,307 June 2019 to May 2020 $5.35/kw-Mo 3,262 June 2020 to May 2021 $4.58/kw-Mo 3,109 June 2021 to May 2022 $3.92/kw-Mo 3,2
Slide 37: 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 38: 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 39: Non-GAAP Reconciliations – Q3 2019 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q3 2019 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED SEPTEMBER 30, 2019 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated
Slide 40: Non-GAAP Reconciliations – YTD 2019 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – YTD 2019 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS NINE MONTHS ENDED SEPTEMBER 30, 2019 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated
Slide 41: Non-GAAP Reconciliations – Q3 2018 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q3 2018 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED SEPTEMBER 30, 2018 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated
Slide 42: Non-GAAP Reconciliations – YTD 2018 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – YTD 2018 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS NINE MONTHS ENDED SEPTEMBER 30, 2018 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated
Slide 43: 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) 865 940 (109) (89) 756 851 Income tax expense 248 273 - - 2
Slide 44: Non-GAAP Reconciliations – 2020 Guidance
NON-GAAP RECONCILIATIONS – 2020 GUIDANCE VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS 2020 GUIDANCE (Unaudited) (Millions of Dollars) Ongoing Operations Asset Closure Vistra Energy Consolidated Low High Low High Low High Net Income (loss) 849 1,081 (95) (75) 754 1,006 Income tax expense 252 320 -
Slide 45: End Slide
VICTDA owe = ENERGY END SLIDE