Vistra Corp. · NYSE:VST
Vistra — Q1 2019 Earnings Presentation
33 slides from Vistra's earnings presentation, May 3, 2019
Slide 1: First Quarter 2019 Results
May 3, 2019 First 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 Q1 2019 Highlights Curt Morgan, President and Chief Executive Officer III Financial Highlights Bill Holden, Executive Vice President and Chief Financial Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q1 2019 4
Slide 5: Q1 2019 Highlights
Q1 2019 Highlights Curt Morgan Chief Executive Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q1 2019
Slide 6: Q1 2019 Highlights
Q1 2019 HIGHLIGHTS Q1 2019 Financial Results Ongoing Operations ($ millions) Adjusted EBITDA: $8151 • First quarter results were above consensus and in-line with management expectations Retail Acquisition • Expect to close Crius Energy acquisition in the second quarter of 2019, pending FERC approval
Slide 7: 2019 Guidance and Capital Allocation Plan Reaffirmed
2019 GUIDANCE AND CAPITAL ALLOCATION PLAN REAFFIRMED 2019 continues to be the “year of execution” for Vistra with first quarter results meeting management expectations and setting up for an expected solid 2019 performance 2019 Guidance Reaffirmed Ongoing Operations ($ millions) Adjusted EBITDA $3,22
Slide 8: Market Update: ERCOT
MARKET UPDATE: ERCOT The backwardation in ERCOT forward curves is dislocated from market fundamentals ERCOT North Hub ATC Prices¹ & Summer Reserve Margins² 40 Target Reserve Margin: 13.75% 14.0% 35 $34.50 $31.28 Summer Reserve Margins 12.0% 30 $27.90 10.7% $25.12 10.0% 25 $23.73 10.0% $/MWh 8.0% 20
Slide 9: Market Update: MISO & PJM
MARKET UPDATE: MISO & PJM MISO PJM Coal to Solar Legislation Fast Start • Transition payments $150/MW-day; up to $140mm/year • Positive step forward for price formation in PJM • REC payments $35/MWh for 15 years • Estimated impact ~$0.50/MWh ATC; difficult to determine • Commit to CO2 reduction of 7
Slide 10: Financial Highlights
Financial Highlights Bill Holden Chief Financial Officer Vi s tra Energy Inv es t or Pres en t a ti o n / Q1 2019
Slide 11: Q1 2019 Financial Results
Q1 2019 FINANCIAL RESULTS Vistra delivered strong first quarter 2019 financial results that were in-line with management expectations for the quarter ONGOING OPERATIONS HIGHLIGHTS ADJUSTED EBITDA1 ($ in millions) Q1 Ongoing Operations Adj. EBITDA1: $815 million • Quarter in-line with management expe
Slide 12: Capital Structure
CAPITAL STRUCTURE Vistra expects to achieve its long-term leverage target of ~2.5x net debt to EBITDA by year-end 2020 ($ in millions) 3/31/19 2019E Term Loan B $5,798 $5,754 Senior Notes 4,673 3,8731 Other2 715 606 Total Long Term Debt3 $11,186 $10,233 Less: cash and cash equivalents (546) (400)4 N
Slide 13: Q&A
Q&A Vi s tra Energy Inv es t or Pres en t a ti o n / Q1 2019
Slide 14: Appendix
Appendix Vi s tra Energy Inv es t or Pres en t a ti o n / Q1 2019
Slide 15: Q1 Results Comparison
Q1 RESULTS COMPARISON ONGOING OPERATIONS ADJUSTED EBITDA1 ($ in millions) $815 $284 Q1 2018 Q1 2019 Adj. EBITDA by segment Q1 2018 Q1 2019 Variance Segment Drivers ($ in millions) Retail 194 257 63 Favorable ERCOT margins ERCOT 91 204 113 Unit performance and Dynegy contribution PJM -- 201 201 Contr
Slide 16: Capital Expenditures
CAPITAL EXPENDITURES CAPITAL EXPENDITURES1 2019E - 2020E ($ in millions) 2019E 2020E Nuclear & Fossil Maintenance2 $432 $474 Nuclear Fuel 74 76 Non-Recurring3 80 - Growth 43 - Total Capital Expenditures $629 $550 Non-Recurring3 (80) - Growth (43) - Adjusted Capital Expenditures $506 $550 1 Excludes
Slide 17: Select Debt Balances
SELECT DEBT BALANCES FUNDED DEBT TRANCHES As of March 31, 20191 ($ in millions) Issuer Series Principal Outstanding Secured Facilities Vistra Operations Senior Secured Term Loan B-1 due August 2023 $2,786 Vistra Operations Senior Secured Term Loan B-2 due December 2023 977 Vistra Operations Senior S
Slide 18: First Quarter Retail Metrics
FIRST QUARTER RETAIL METRICS Q1 2019 RETAIL HIGHLIGHTS RETAIL VOLUME National (in GWh) 16,333 ✓ Demonstrated pricing discipline and risk management capabilities in higher power cost 2,338 environment 9,193 9,452 ✓ Continued strong sales performance in 4,536 Business markets 4,657 4,543 ✓ Expanded br
Slide 19: First Quarter Generation Metrics
FIRST QUARTER GENERATION METRICS TOTAL GENERATION CAPACITY FACTOR (CCGT) TWhs Q1 2018 Q1 2019 % Q1 2018 Q1 2019 ERCOT 17.1 20.1 ERCOT 72% 49% PJM -- 14.5 PJM -- 74% NY/NE -- 4.9 NY/NE -- 49% MISO -- 7.1 MISO -- -- CAISO -- 1.6 CAISO -- 72% Ong. Ops 17.1 48.2 Asset Closure 1.1 0 CAPACITY FACTOR (COAL
Slide 20: Commercial Operations
COMMERCIAL OPERATIONS Hub ATC Price Forecasted Premium Forecasted Discount ($/MWh) ERCOT PJM 47.5 95 48 96 48 96 47.5 95 $36.29 ~88 TWhs $37.83 ~84 TWhs 38 76 38 76 $31.21 37.5 75 37.5 75 $1.78 $6.55 $31.16 27.5 55 27.5 55 28 $1.87 56 28 $1.25 56 ~54 TWhs ~53 TWhs 17.5 $34.50 35 17.5 $31.28 35 18 ~5
Slide 21: Hedge Profile – ERCOT
HEDGE PROFILE – ERCOT NATURAL GAS HEDGE PROFILE HEAT RATE HEDGE PROFILE 99% 100% 100% 94% 91% 88% 52% 42% 12/29/17 3/30/18 9/30/18 3/29/19 12/31/18 3/30/1811 6/29/18 12/31/18 12/31/18 12/29/17 3/30/18 9/30/18 3/30/18 6/29/18 3/29/19 12/31/18 3/30/18 12/29/17 9/30/18 6/29/18 12/31/18 11 3/29/19 3/30/
Slide 22: Hedge Profile – Other Markets
HEDGE PROFILE – OTHER MARKETS GENERATION VOLUMES HEDGED (2019) GENERATION VOLUMES HEDGED (2020) MISO/CAISO NENY PJM MISO/CAISO NENY PJM 94% 95% 87% 81% 74% 65% 67% 57% 35% 37% 29% 32% 12/31 3/29 12/31 3/29 12/31 3/29 12/31 3/29 12/31 3/29 12/31 3/29 NATURAL GAS MARGIN SENSITIVITY1 HEAT RATE MARGIN S
Slide 23: Market Pricing – ERCOT
MARKET PRICING – ERCOT MONTHLY NORTH HUB ATC POWER PRICES IMPLIED NORTH HUB ATC MARKET HEAT RATES 120 August 19 40 August 19 $95.85 33.82 August 20 35 100 August 20 29.80 $77.00 30 (mmBtu/MWh) 80 ($/MWh) 25 60 20 $34.67 40 $26.58 15 11.53 9.28 20 10 - 5 2017A 2018A 2019E 2020F 2017A 2018A 2019E 2020
Slide 24: Market Pricing – Other Markets
MARKET PRICING – OTHER MARKETS MONTHLY AD HUB ATC POWER PRICES MONTHLY INDIANA HUB ATC POWER PRICES 60 60 50 50 40 40 ($/MWh) ($/MWh) 30 30 20 20 10 10 - - 2017A 2018A 2019E 2020F 2017A 2018A 2019E 2020F Settled 12/31/2018 Forward 3/29/2019 Forward Settled 12/31/2018 Forward 3/29/2019 Forward MONTHL
Slide 25: Capacity Position – MISO
CAPACITY POSITION – MISO MISO Capacity Position (excludes PJM exports) Price in $/kw-mo Total EBITDA Contribution 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 1,690 Average Price $4.02 $82 MM PY 21/22 MWs 664 Average Price $4.22 $34 MM MIS
Slide 26: Capacity Positions – PJM
CAPACITY POSITIONS – PJM (excludes MISO Imports) PJM Region Planning Year Average Price MW Position Average Price MW Position ($/MW-day) ($/MW-day) Legacy/Base Product Capacity Performance Product 2018 – 2019 $199.39 948 $165.13 4,599 2019 – 2020 $169.50 552 $98.12 4,809 RTO 2020 – 20211 N/A N/A $93
Slide 27: 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 $6.96/kw-Mo 3,282 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 28: 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 29: 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 30: 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, 2019 (Unaudited) (Millions of Dollars) Eliminations/ Ongoing Vistra Energy Retail ERCOT PJM NY/NE MISO Corp and Operations Asset Closure Consolidated Other Consolidated Net
Slide 31: Non-GAAP Reconciliations – Q1 2018 Adjusted EBITDA
NON-GAAP RECONCILIATIONS – Q1 2018 ADJUSTED EBITDA VISTRA ENERGY CORP. – NON-GAAP RECONCILIATIONS THREE MONTHS ENDED MARCH 31, 2018 (Unaudited) (Millions of Dollars) Eliminations / Ongoing Operations Vistra Energy Retail ERCOT Asset Closure Corp and Other Consolidated Consolidated Net Income (loss)
Slide 32: 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) 891 1,047 (65) (55) 826 992 Income tax expense (benefit) 26
Slide 33: End Slide
VICTDA owe = ENERGY END SLIDE