Vistra Corp. · NYSE:VST
Vistra — Q1 2023 Earnings Presentation
44 slides from Vistra's earnings presentation, May 9, 2023
Slide 1: First Quarter 2023 Results
First Quarter 2023 Results May 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. Q1 2023 Highlights Jim Burke, President & Chief Executive Officer III. Q1 2023 Finance Update Kris Moldovan, Executive Vice President & Chief Financial Officer Vistra Investor Presentation / Q1 2023 3
Slide 4: Q1 2023 Highlights
Q1 2023 Highlights Jim Burke President & Chief Executive Officer VISTRA CORP. 04 Vistra Investor Presentation / Q1 2023 4
Slide 5: Continued and Steady Focus on our Four Strategic Priorities
Continued and Steady Focus on our Four Strategic Priorities We continue to execute on our strategic priorities Long-term, Sustainable Value Creation through Integrated Business Model: Comprehensive hedging program supported solid Q1 2023 performance despite milder weather and lower prices; integrate
Slide 6: Q1 2023 Results
Q1 2023 Results Q1 2023 Financial Results Reaffirming 2023 Guidance Ongoing Operations ($ millions) Ongoing Operations ($ millions) Adj. EBITDA1 $554 Adj. EBITDA1 $3,400 - $4,000 Highlights Adj. FCFbG1 $1,750 - $2,350 • Solid Q1 Financial Performance • Milder than normal weather throughout the U.S.
Slide 7: 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 Average EH Contribution to 2024 - 2025 midpoint businesses and Vistra Zero renewables and storage op
Slide 8: Finance Update
Finance Update Kris Moldovan Executive Vice President & Chief Financial Officer VISTRA CORP. 04 Vistra Investor Presentation / Q1 2023 8
Slide 9: Q1 2023 Financial Results
Q1 2023 Financial Results First quarter performance within range of guidance expectations ONGOING OPERATIONS Generation3 ADJUSTED EBITDA1 $205 million favorable as compared to Q1 2022 primarily driven by: ($ millions) benefits of in-the-money settled hedges at higher prices and the $554 recognition
Slide 10: Capital Allocation Update
Capital Allocation Update1 • Executed ~$2.70 billion from Nov. 2021 through May 4, 2023 Share • Remaining ~$1.55 billion of authorization expected to be spent by year-end 2024 Repurchase • Aggregate share repurchases through 2026 targeted at an upsized $6.25 billion2 Program • Share count of ~373 mi
Slide 11: Market Curves and Hedge Position Update
Market Curves and Hedge Position Update Vistra’s comprehensive hedging program results in a more stable earnings profile and provides opportunities to lock-in significant gross margin in the outer years Vistra Standalone3 Significantly hedged in 2023 and 2024; supports guidance and insulates near-te
Slide 12: Appendix
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Slide 13: Corporate Debt Profile
Corporate Debt Profile A strong balance sheet is core to Vistra’s strategy. Accordingly, Vistra remains committed to a long-term net leverage target (excluding any non-recourse debt at Vistra Zero) of less than 3x ($ millions) Q1 2023 Funded Revolving Credit Facility and Commodity Linked RCF $0 Term
Slide 14: Select Debt Balances
Select Debt Balances Funded Debt Tranches As of March 31, 20231 ($ millions) Issuer Series Principal Outstanding Secured Debt Vistra Operations Senior Secured Term Loan B-3 due December 2025 $2,507 Vistra Operations 4.875% Senior Secured Notes due May 2024 400 Vistra Operations 3.550% Senior Secured
Slide 15: Q1 2023 Retail Metrics
Q1 2023 Retail Metrics Highlights Retail Volume • Continued strong performance in Texas: All markets (electric volumes in TWh) ✓ Well positioned as a result of our core capabilities and diverse brand 23.3 and channel strategies 3.0 20.8 ✓ Strong residential and mass business customer counts performa
Slide 16: Q1 2023 Generation Metrics
Q1 2023 Generation Metrics TOTAL GENERATION1 CAPACITY FACTOR (CCGT) 1 TWhs Q1 2022 Q1 2023 % Q1 2022 Q1 2023 TEXAS 17.7 16.6 TEXAS 34% 35% EAST 14.3 14.6 EAST 62% 62% WEST 1.2 1.5 WEST 54% 70% SUNSET 5.9 3.5 Ong. Ops 39.1 36.2 Asset Closure 3.9 - CAPACITY FACTOR (COAL) 1 % Q1 2022 Q1 2023 COMMERCIAL
Slide 17: Capital Expenditures
Capital Expenditures Projected Capital Expenditures1 ($ millions) 2023E Nuclear & Fossil Maintenance2,3 $744 Nuclear Fuel 139 Non-Recurring4 12 Solar & Energy Storage Development 977 Other Growth5 151 Total Capital Expenditures $2,024 Non-Recurring4 (12) Solar & Energy Storage Development (977) Othe
Slide 18: Hedge Profile & Portfolio Sensitivities Effective: 3/31/2023
Hedge Profile & Portfolio Sensitivities Effective: 3/31/2023 Balance of 2023 2024 TEXAS WEST EAST SUNSET TOTAL TEXAS WEST EAST SUNSET TOTAL Nuclear/Renewable/Coal Gen Position Expected Generation (TWh) 35 - - 18 53 48 - - 24 72 % Hedged 98% - 94% 97% 97% - - 61% 85% Net Position 1 - - 1 2 1 - - 9 11
Slide 19: Market Pricing Effective: 3/31/2023
Market Pricing Effective: 3/31/2023 Apr-Dec'23 2024 Apr-Dec'23 2024 Power (ATC, $/MWh) Spark Spreads ($/mwhr) ERCOT North Hub $40.40 $43.15 Approx. Contrib ution ERCOT West Hub $37.34 $40.33 ERCOT PJM AD Hub $37.26 $44.82 ERCOT North Hub-Houston Ship Channel 90% $19.54 $15.74 PJM Ni Hub $32.15 $40.5
Slide 20: NE/NY and CAISO Market Curves
NE/NY and CAISO Market Curves Curves as of May 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 price weighted as NENY
Slide 21: Capacity Positions Effective: 3/31/2023
Capacity Positions Effective: 3/31/2023 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 1,481 2023/2024 3,234 $35.47 WEST 2024 1,770 2024/2025 3,156 $31.91 2025 1,260 2025/2026 400 $70.40 2026 750 ComEd
Slide 22: 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 23: 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 24: Vistra Zero & Sustainability Goals
Vistra Zero & Sustainability Goals VISTRA CORP. 04 Vistra Investor Presentation / Q1 2023 24
Slide 25: Strategic Green Energy Growth - Vistra Zero Portfolio
Strategic Green Energy Growth - Vistra Zero Portfolio Strategic 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 400 MW/1,600 MWh Expan
Slide 26: Vistra Zero Portfolio
Vistra Zero Portfolio ~3,400 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 27: Moss Landing Energy Storage Facility
Moss Landing Energy Storage Facility Phase III of the Moss Landing Energy Storage Facility will bring the site's total energy storage capacity to 750MW / 3,000MWh Vistra Investor Presentation / Q1 2023 27
Slide 28: 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 ~3,400 MW2 60% by (in MMtCO2e) of zero-carbon generat
Slide 29: 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 30: Energy Harbor Acquisition – Announced March 6, 2023
Energy Harbor Acquisition – Announced March 6, 2023 VISTRA CORP. 04 Vistra Investor Presentation / Q1 2023 30
Slide 31: 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 32: 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 33: 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 34: 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 35: 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) $125 Demonstrated Track-Rec
Slide 36: Pro Forma Vistra Vision Fleet Asset Details
Pro Forma Vistra Vision Fleet Asset Details Asset Location ISO Capacity (MW) 1 Status In-Service Year 2 NUCLEAR Com anche Peak Glen Rose, TX ERCOT 2,400 Online 1990 Beaver Valley I & II Shippingport, PA PJM 1,872 Online 1976 / 1987 Perry Perry, Ohio PJM 1,268 Online 1986 Davis-Besse Oak Harbor, Ohio
Slide 37: Scaled Pro Forma Clean Generation Footprint
Scaled Pro Forma Clean Generation Footprint Projected Merchant Nuclear Net Generation for 2023 (TWh)1 Vistra previously ranked #4 with 20 TWh prior to the transaction 169 53 20 2 30 19 18 16 9 33 CEG EH PEG TLN NEE D NRG Projected U.S. Clean Net Generation for 2023 (TWh)1 174 123 3 Vistra previously
Slide 38: Transaction to Increase Zero-Carbon Generation Baseload Capacity
Transaction to Increase Zero-Carbon Generation Baseload Capacity Consolidated Vision Operating & Under Development by Technology 6%1% 6% 1% (GW) 6% 27% 15% Gas Renewables Coal Nuclear 24% 38.4 GW 4.0 GW 8.9 GW 42.4 GW Oil 57% 63% 21% 73% 100% Operating & Under Development by Geography 5% 3% 4% 5% 3%
Slide 39: Nuclear PTC Overview
Nuclear PTC Overview Nuclear assets benefit from the Inflation Reduction Act’s (IRA) nuclear Production Tax Credit (PTC), which creates revenue stability during periods of lower power prices Illustrative Revenue Support PTC Mechanism ($/MWh) $53.31 (2032) • The nuclear PTC is a tax credit that provi
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations VISTRA CORP. 04 Vistra Investor Presentation / Q1 2023 40
Slide 41: Non-GAAP Reconciliations – Q1 2023 Adjusted EBITDA
Non-GAAP Reconciliations – Q1 2023 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED MARCH 31, 2023 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated Closure Consolidated Net incom
Slide 42: Non-GAAP Reconciliations – Q1 2022 Adjusted EBITDA
Non-GAAP Reconciliations – Q1 2022 Adjusted EBITDA VISTRA CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED MARCH 31, 2022 (Unaudited) (Millions of Dollars) Ongoing Eliminations / Operations Asset Vistra Corp. Retail Texas East West Sunset Corp and Other Consolidated(d) Closure Consolidated Net in
Slide 43: 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) 1,050 1,510 (180) (80) 870 1,430 Income tax expense 300 440 0 0 300 440
Slide 44: 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 November 4, 2022. (a) Includes unrealized (gain) / loss on interest rate swaps of $36 million (b) Includes