Vistra Corp. · NYSE:VST
Vistra — Vistra Energy — Q2 2017 Earnings Presentation
28 slides from Vistra's earnings presentation, Aug 4, 2017
Slide 1: Vistra Energy Second Quarter 2017 Results
Vistra Energy Second Quarter 2017 Results August 4, 2017
Slide 2: Safe Harbor Statements
Safe Harbor Statements Cautionary Note Regarding Forward-Looking Statements This presentation includes forward-looking statements, which are subject to risks and uncertainties. All statements, other than statements of historical facts, are forward- looking statements. These statements are often, but
Slide 3: Safe Harbor Statements, Continued
Safe Harbor Statements, Continued 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 describe
Slide 4: Agenda
Agenda Welcome and Safe Harbor Molly Sorg, Vice President, Investor Relations Q2 2017 Highlights and Operational Review Curt Morgan, President and Chief Executive Officer Q2 Hot Topics Jim Burke, Chief Operating Officer & Sara Graziano, SVP Corporate Development Q2 2017 Financial Review Bill Holden,
Slide 5: Q2 2017 Highlights & Operational Review
Q2 2017 Highlights & Operational Review Curt Morgan, President and Chief Executive Officer
Slide 6: Q2 2017 Highlights
Q2 2017 Highlights • Financial Performance – Adjusted EBITDA: $345mm Q2 2017 and $621mm YTD Solid results despite Comanche Peak Unit 2 unplanned outage – Full Year 2017 adjusted EBITDA and adjusted Free Cash Flow guidance ranges reaffirmed • Capital Allocation – Closed on acquisition of 1,054 MW O
Slide 7: Q2 2017 Highlights, Continued
Q2 2017 Highlights, Continued • Operations Performance Initiative – Interim Update – Initial phase of operations performance initiative reviews complete EBITDA enhancements identified to date are as follows (full year run-rate assumes no changes to our existing fleet): 2017 EBITDA Full Year Enhanc
Slide 8: Commercial Operations
Commercial Operations Strong Commercial Performance Realized Prices and Volumes ($/MWh) • Fossil Fleet Commercial Availability1 of 96% in the second quarter of 2017 $32.93 $33.26 ~50 TWhs3 $5.00 39.91 TWhs • Consistent results from our commercial team, $10.30 with YTD realized prices coming in ~46%
Slide 9: ERCOT Summer Heat Rates
ERCOT Summer Heat Rates NHUB 5x16 Summer Heat Rates¹ 27 25 2020 2021 mmbtu/MWh 23 2019 21 2018 19 17 1/30/2017 2/28/2017 3/31/2017 4/30/2017 5/31/2017 6/30/2017 • In the May 2017 CDR, ERCOT forecasted average annual load growth of 1.4% in the years 2018-2021 with a corresponding tightening of reserv
Slide 10: Q2 Hot Topics
Q2 Hot Topics Jim Burke, Chief Operating Officer and Sara Graziano, SVP Corporate Development
Slide 11: OPI Initiative
OPI Initiative What is the Operations Performance Initiative (OPI)? Structured process to identify improvement • Led by site leadership, Operations Excellence opportunities group, and outside consultants • Approximately 90% of site employees at all levels participate in process “Complex” view (m
Slide 12: Odessa Plant and Gas Supply Overview
Odessa Plant and Gas Supply Overview Plant Details: • 1,054 MW installed capacity • ERCOT West Zone El Paso • HR 7.1 MMBtu/MWh • Planned routine replacement of parts in 2019 and 2020 OneOk provides opportunity to economically improve heat rate, capacity, and length of time between outages ATMOS • Ac
Slide 13: Q2 2017 Financial Review
Q2 2017 Financial Review Bill Holden, Chief Financial Officer
Slide 14: Financial Results
Financial Results Highlights Q2 2017 Performance • Q2 2017 adjusted EBITDA of $345mm1 Adjusted EBITDA – $134mm Luminant ($ in millions) – $219mm TXU Energy TXUE Luminant $6212 • TXU Energy once again realized strong margin and cost management in the quarter, partially 230 offsetting the negative imp
Slide 15: Vistra Hedge Profile
Vistra Hedge Profile Natural Gas Hedge Profile Heat Rate Hedge Profile 100% 100% 92% 91% 64% 66% 51% 43% 4/21/17 6/30/17¹ 4/21/17 6/30/17 4/21/17 6/30/17¹ 4/21/17 6/30/17 2017 2018 2017 2018 Natural Gas Margin Sensitivity2 Heat Rate Margin Sensitivity2 ($ in millions) ($ in millions) 2017 2018 2017
Slide 16: Vistra Capital Structure
Vistra Capital Structure • Vistra’s capital structure provides financial flexibility and represents the lowest leverage among IPPs $ in millions 6/30/2017 2017E Long-term debt1 $4,575 $4,575 Pro forma term loan amortization and other debt repayments -- (22) Pro forma long-term debt $4,575 $4,553 Les
Slide 17: Q&A
VICTDA aw 8 Bw = ENERGY Q&A
Slide 18: Appendix
VICTRA ENERGY Appendix
Slide 19: Right-Sized Support Cost Structure
Right-Sized Support Cost Structure Percent Cost Reduction By Function1 ($ in millions) ~26% $300 $254 $250 $188 ~25% $200 $145 $150 $109 ~44% ~93% $100 ~44% ~57% ~51% ~12% ~62% ~51% ~45% ~41% $53 ~31% $50 $29 $33 $25 $31 $28 $24 $29 $21 $20 $13 $15 $12 $9 $6 $11 $7 $9 $3 $6 $4 $2 $0 O&M and IT Finan
Slide 20: Historical EBITDA Contribution and Realized Power Prices
Historical EBITDA Contribution and Realized Power Prices ($ in millions) Balanced EBITDA Contribution1 $1,768 $1,667 $1,575 $1,555 $1,603 $960 $985 $755 $730 $764 $46.56 $43.23 $43.51 $39.88 $37.57 $33.93 $30.50 $25.15 $23.78 $21.06 $808 $682 $845 $800 $839 2012 2013 2014 2015 2016 TXU Energy Lumina
Slide 21: ERCOT Market Pricing
ERCOT Market Pricing Monthly North Hub ATC Power Prices¹ Implied North Hub ATC Market Heat Rates $45.816 August $41.31 15.71 August 13.4216 $32.916 12.0416 $28.116 10.2616 12/31/16 3/1/17 12/31/16 3/1/17 Monthly Gas Prices (HSC)² Yearly Average Prices NHUB NHUB Gas - HSC PRB 8800 ATC ATC HR August 2
Slide 22: Luminant Asset Details
Luminant Asset Details Installed Environmental Control Equipment1 2017E Luminant Capacity Lignite Heat Rate FGD SNCR Bag- Assets (MW) Blend (btu/kWh) (Scrubber) ACI ESP / SCR house Big Brown 1,150 17% 10,761 SNCR 2 2 Monticello 1,880 0% 10,900 SNCR Martin Lake 2,250 52% 10,177 Sa
Slide 23: Luminant Asset Details, Continued
Luminant Asset Details, Continued Luminant Assets Facility Capacity (MW) COD Technology Decordova 260 1990 CT Simple Cycle Morgan Creek 390 1988 CT Permian Basin 325 1988 / 1990 CT Total Simple Cycle 975 Graham 630 1960 / 1969 ST Lake Hubbard 921 1970 / 1973 ST Steam Units Stryker Creek 685 1958 / 1
Slide 24: Retail Key Metrics
Retail Key Metrics Residential Customer Counts1 North Central Zone Energy Degree Days2 (in thousands) 1,478 1,476 589 Q1 2017 Q2 2017 541 Total EDDs 453 475 306 Q2 Retail Volumes (GWh) 468 277 193 289 4,749 4,621 240 203 161 5,032 5,090 Q2 2016 Q2 2017 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 25: Vistra Capital Expenditures
Vistra Capital Expenditures Capital Expenditures1 2015A-2017E ($ in millions) 2015A 2016A 2017E Nuclear Fuel $122 $74 $62 Nuclear & Fossil Maintenance 207 189 105 Environmental 82 62 20 IT, Corporate, and Other 44 27 32 Total Capital Expenditures $455 $352 $219 Non-recurring Capital Expenditures2 -
Slide 26: Reg G Reconciliation – Adjusted EBITDA
Reg G Reconciliation – Adjusted EBITDA 25
Slide 27: Reg G Reconciliation – Adjusted FCF
Reg G Reconciliation – Adjusted FCF 26
Slide 28: Reg G Reconciliation – 2017 Guidance
Reg G Reconciliation – 2017 Guidance 27