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    Vistra Corp (VST)

    Board Change
    New Share Buyback Program

    Business Description

    Vistra Corp. operates as an integrated retail electricity and power generation company primarily in the U.S. markets. The company engages in competitive energy market activities, including electricity generation, wholesale energy sales and purchases, commodity risk management, and retail sales of electricity and natural gas to end users . Vistra's operations are divided into six reportable business segments: Retail, Texas, East, West, Sunset, and Asset Closure . The company provides electricity and natural gas to approximately 4 million residential, commercial, and industrial customers across 20 states and the District of Columbia .

    1. Retail - Provides electricity and natural gas to approximately 4 million residential, commercial, and industrial customers across 20 states and the District of Columbia through brands such as TXU Energy, Ambit Energy, Dynegy Energy Services, Homefield Energy, and U.S. Gas & Electric .
    2. Texas - Focuses on electricity generation operations in the ERCOT market .
    3. East - Covers operations in the Eastern Interconnection of the U.S. electric grid, including PJM, ISO-NE, and NYISO markets .
    4. West - Engages in electricity generation and related activities in the western U.S. markets .
    5. Sunset - Manages plants with announced retirement dates .
    6. Asset Closure - Involves the decommissioning of retired plants and mines .

    Q3 2024 Summary

    Initial Price$88.74July 1, 2024
    Final Price$122.55October 1, 2024
    Price Change$33.81
    % Change+38.10%

    What went well

    • Vistra Corp is strategically advancing its peaker projects in ERCOT, with the flexibility to proceed or pause depending on favorable market developments, demonstrating prudent capital allocation and responsiveness to market signals.
    • The company's nuclear assets command a premium due to their carbon-free, 24/7 attributes, aligning with customer preferences for sustainability, and positioning Vistra advantageously in the energy transition.
    • Despite regulatory uncertainties like the Susquehanna ISA ruling, Vistra maintains multiple growth avenues and continues positive customer engagements, highlighting the company's resilience and adaptability in pursuing both co-located and front-of-the-meter projects.

    What went wrong

    • Vistra faces uncertainties in ERCOT market design, which could delay or halt their planned peaker projects in Texas, impacting future earnings.
    • Complex and time-consuming discussions with customers over co-located generation solutions may result in delays and challenges in addressing resource adequacy concerns in ERCOT.
    • There may be lower profitability from gas assets compared to nuclear assets due to customer preferences for carbon-free energy, potentially affecting demand and margins for gas generation.

    Q&A Summary

    1. 2026 Guidance Outlook
      Q: What does 'meaningfully above' $6 billion in 2026 guidance imply?
      A: Vistra anticipates potential upside to its $6 billion 2026 guidance, driven by being only 64% hedged for that year, leaving room for favorable market movements and the impact of the PJM capacity auction results. They have built in some upside as they hedge more and observe auction outcomes.

    2. Data Center Co-location Plans
      Q: Can you update on data center co-location at nuclear and gas plants?
      A: Vistra is actively pursuing co-location deals at multiple sites, including nuclear and gas plants in ERCOT and PJM. They're in detailed discussions with several companies, considering co-location deals, nuclear uprates, and new builds. These complex deals take time but offer significant opportunities due to robust demand, particularly in Texas.

    3. Impact of PJM ISA Ruling and Texas Energy Fund
      Q: How do the PJM ISA ruling and Texas Energy Fund affect Vistra's strategy?
      A: The PJM ISA ruling adds complexity but doesn't necessarily favor ERCOT over PJM. While PJM's capacity market provides investment signals, recent interventions have caused delays. In Texas, uncertainties around the Texas Energy Fund (TEF) and market design impact Vistra's decisions on new projects like peaker plants. They are proceeding cautiously, awaiting further market developments before fully committing.

    4. EBITDA Impact from Data Center Deals
      Q: Will data center deals significantly impact EBITDA by 2026-2027?
      A: It's unlikely that data center deals will have a meaningful EBITDA impact by 2026-2027 due to long lead times. Building infrastructure and powering sites can take 4-5 years, so these deals aren't expected to affect near-term hedging or guidance.

    5. Pricing Differences: Nuclear vs Gas Assets
      Q: How do pricing and customer interest differ between nuclear and gas assets?
      A: While specific pricing isn't disclosed, nuclear assets may command a premium due to their carbon-free 24/7 attributes. Customers weigh factors like location, speed, and energy needs. There's significant interest in nuclear sites, but gas assets also attract interest for co-location deals.

    6. Transmission Capacity for PJM Assets
      Q: Is there sufficient transmission capacity for PJM assets like Beaver Valley?
      A: At Beaver Valley, studies show co-locating load wouldn't negatively impact the grid, offering a speed-to-market advantage over front-of-the-meter connections. However, thorough study processes are still required for any new load additions.

    7. Policy Changes and Resource Adequacy
      Q: How might recent policy changes affect new gas builds and the coal fleet?
      A: Vistra notes that potential revisions to GHG rules could affect both coal units and new gas builds. They emphasize their diversified portfolio across technologies and markets, positioning them to adapt to regulatory changes. It's too early to assess specific impacts, but they remain flexible to opportunities.

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDQ1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024
    Retail2,4273,3832,41210,5722,4943,168--
    - Contracts---576-108--
    - Other---1,255----
    Texas1911,5177623,823439173--
    East8466519094,2156371,193--
    West224344115914285202--
    Sunset3142244651,831239387--
    ERCOT--------
    PJM--------
    NY/NE--------
    MISO--------
    Asset Closure00-000--
    Corporate and Other-1-2-1--
    Eliminations-813-2,034-1,585-6,578-1,040-1,279--
    Total Revenue3,1894,0863,07914,7793,0543,8456,288-
    Revenue by Geography - in Millions of USDQ1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024
    Retail--------
    Texas1911,5177623,823439-4,104-
    East8466519094,215637-1,524-
    West224344115914285-242-
    Sunset3142244651,831239-469-
    Asset Closure-0-0--1-
    Eliminations-(2,033)--6,576---4,303-
    ERCOT--------
    PJM--------
    NY/NE--------
    MISO--------
    Corporate and Other--------
    Total Revenue3,1894,0863,07914,7793,0543,8456,288-
    KPIs - MetricQ1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024
    Retail Electricity Sales Volumes in ERCOT (GWh)17,08622,643--16,07418,96722,193-
    Retail Electricity Sales Volumes in Northeast/Midwest (GWh)6,2007,935--10,26115,98017,864-
    Production Volumes from Natural Gas Facilities (GWh)10,94915,635--8,15111,20115,152-
    Production Volumes from Lignite and Coal Facilities (GWh)6,1896,743--4,7974,7846,105-
    Production Volumes from Nuclear Facilities (GWh)4,0345,210--10,0435,0355,217-
    Production Volumes from Solar Facilities (GWh)391247--156216233-
    Capacity Factors for CCGT Facilities (%)58.877.2--43.859.378.3-
    Capacity Factors for Lignite and Coal Facilities (%)73.679.3--57.156.971.8-
    Capacity Factors for Nuclear Facilities (%)77.098.3--95.696.098.5-
    Cooling Degree Days (% of Normal)101.9120.5---118100-
    Heating Degree Days (% of Normal)90.481.5--9344--
    Average ERCOT North Power Price ($/MWh)36.53109.32--21.6628.6426.94-
    Average NYMEX Henry Hub Natural Gas Price ($/MMBtu)2.122.58--2.432.042.08-
    Residual Natural Gas Position Increase (Texas)-3-2--041-
    Residual Natural Gas Position Decrease (Texas)10---5-4-1-
    Clearing Price per MW-day ($)-34.13--34.13273.45269.92-
    Month-end Average VaR ($ million)243210--251294274-
    Month-end High VaR ($ million)423423--329371371-
    Month-end Low VaR ($ million)172127--197197196-

    Executive Team

    NamePositionStart DateShort Bio
    Kristopher E. MoldovanExecutive Vice President and Chief Financial OfficerAugust 2022Kristopher E. Moldovan has been with Vistra and its predecessor companies since 2006. He served as Senior Vice President and Treasurer from 2017 to 2022, and Assistant Treasurer from 2010 to 2017. He originally joined as Senior Counsel, focusing on finance and M&A .
    Stacey DoréChief Strategy & Sustainability Officer, Executive Vice President of Public AffairsAugust 2022Stacey Doré is responsible for corporate strategy, sustainability, regulatory and government affairs, communications, and community engagement. She was previously the president and CEO of Hunt Utility Services and Sharyland Utilities from 2019 to 2021 .
    Scott A. HudsonExecutive Vice President and President of Vistra RetailFebruary 2020Scott A. Hudson oversees all of the company's retail electricity brands. He was promoted to Executive Vice President in January 2022 and previously served as Senior Vice President of Vistra Corporate Services Company and President of TXU Energy .
    Carrie Lee KirbyExecutive Vice President and Chief Administrative OfficerOctober 3, 2016Carrie Lee Kirby was previously the Executive Vice President of Human Resources for Vistra's predecessor, leading HR functions across its subsidiaries. She joined TXU Energy in 2006 as a Human Resources Director .
    Stephanie Zapata MooreExecutive Vice President, General Counsel, and Chief Compliance OfficerOctober 2016Stephanie Zapata Moore has been with Vistra since November 2005, initially serving as Counsel and Senior Counsel. She became Vice President and General Counsel of Luminant in April 2012 before her current roles .
    Stephen J. MuscatoExecutive Vice President and President of Wholesale Operations & DevelopmentJanuary 2023Stephen J. Muscato was the Chief Commercial Officer starting in February 2020. He has held various senior leadership positions within Vistra and its subsidiaries, including Senior Vice President and Chief Commercial Officer of Luminant .
    John W. (Bill) PitesaIndependent Director and Chair of the Nuclear Oversight CommitteeMarch 2024 (expected)Bill Pitesa has extensive experience in the nuclear industry, including serving as the chief nuclear officer at Duke Energy and the Nuclear Energy Institute. He holds a Bachelor of Science degree in electrical engineering from Auburn University and is a registered professional engineer in North Carolina .

    Questions to Ask Management

    1. Given the FERC's recent rejection of the amended interconnection service agreement for data center co-location at your Susquehanna nuclear plant, how do you plan to navigate regulatory hurdles to advance your co-location projects, and what alternative strategies are you considering?

    2. With your net leverage expected to move slightly above 3x following the acquisition of the Vistra Vision 15% minority interest, how confident are you in your ability to quickly deleverage while executing on significant capital return plans and growth projects?

    3. Considering the uncertainty in policy changes affecting new gas and coal builds, especially after the recent election results, how does Vistra plan to manage the risk of investing in long-term assets amid potential regulatory shifts?

    4. Despite significant load growth projections from data centers and other industries in ERCOT and PJM, what challenges do you foresee in capturing these opportunities, particularly in light of infrastructure constraints and competition from other regions?

    5. Given the elevated free cash flow yield and your commitment to share repurchases, how do you balance returning capital to shareholders with the need to invest in growth opportunities like data center partnerships and renewable projects?

    Share Repurchase Program

    Program DetailsProgram 1Program 2Program 3Program 4Program 5
    Approval DateOctober 11, 2021 August 2022 March 2023 February 2024 October 2024
    End Date/DurationEnd of 2026 End of 2026 End of 2026 End of 2026 End of 2026
    Total Additional Amount$2.0 billion $1.25 billion $1.0 billion $1.5 billion $1.0 billion
    Remaining Authorization$0 $0 $0 $0.236 billion $1.0 billion
    DetailsTotal authorized as of November 4, 2024: $6.75 billion Total authorized as of November 4, 2024: $6.75 billion Total authorized as of November 4, 2024: $6.75 billion Total authorized as of November 4, 2024: $6.75 billion Total authorized as of November 4, 2024: $6.75 billion

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: FY 2024, FY 2025, FY 2026
    • Guidance:
      • FY 2024:
        • Ongoing Operations Adjusted EBITDA: $5.0 billion to $5.2 billion .
        • Ongoing Operations Adjusted Free Cash Flow Before Growth: $2.65 billion to $2.85 billion .
      • FY 2025:
        • Ongoing Operations Adjusted EBITDA: $5.5 billion to $6.1 billion .
        • Ongoing Operations Adjusted Free Cash Flow Before Growth: $3.0 billion to $3.6 billion .
      • FY 2026:
        • Ongoing Operations Adjusted EBITDA: Midpoint opportunity of over $6 billion .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: FY 2024, FY 2025
    • Guidance:
      • FY 2024:
        • Ongoing Operations Adjusted EBITDA: $4.550 billion to $5.050 billion .
      • FY 2025:
        • Ongoing Operations Adjusted EBITDA Midpoint Opportunity Range: $5.2 billion to $5.7 billion .
        • Conversion Rate of Ongoing Operations Adjusted EBITDA to Adjusted Free Cash Flow Before Growth: 55% to 60% .
        • Share Repurchases: At least $2.25 billion over 2024 and 2025, and at least an additional $1 billion in 2026 .
        • Net Leverage: Below 3x by the end of 2024 .
        • Dividends to Minority Investors in Vistra Vision: Approximately $135 million in 2024 .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: FY 2024
    • Guidance:
      • Ongoing Operations Adjusted EBITDA: $4,550,000,000 to $5,050,000,000 .
      • Ongoing Operations Adjusted Free Cash Flow Before Growth: $2,200,000,000 to $2,700,000,000 .
      • Conversion Rate from Adjusted EBITDA to Free Cash Flow: Below 55% to 60% for 2024, expected to return to target range in 2025 .
      • Vistra Vision and Vistra Tradition Contribution: Each expected to contribute roughly half of the adjusted EBITDA over time .
      • Energy Harbor Contribution: Expected run rate adjusted EBITDA contribution to exceed $1.1 billion beginning in 2026 .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: FY 2024, FY 2025
    • Guidance:
      • FY 2024:
        • Ongoing Operations Adjusted EBITDA: $3.7 billion to $4.1 billion for Vistra stand-alone .
        • Ongoing Operations Adjusted Free Cash Flow Before Growth: $1.9 billion to $2.3 billion for Vistra stand-alone .
        • Energy Harbor Contribution: 12-month 2024 ongoing operations adjusted EBITDA midpoint opportunity of $700 million .
      • FY 2025:
        • Ongoing Operations Adjusted EBITDA: Expected run rate ongoing operations adjusted EBITDA midpoint opportunity of $900 million .
        • Ongoing Operations Adjusted EBITDA for Vistra Stand-Alone: $3.8 billion to $4 billion .

    Latest news

    Recent developments and announcements about VST.

    Corporate Leadership

      Board Change

      ·
      Dec 30, 2024, 9:58 PM

      Rob Walters has been appointed as an independent director to the board of Vistra Corp, effective December 30, 2024. He will serve on the Sustainability and Risk Committee and the Nominating and Governance Committee, expanding the board to 11 members.

      Leadership Change

      ·
      Nov 20, 2024, 11:02 PM

      Stephen J. Muscato is leaving his position as Executive Vice President and President of Vistra Wholesale Operations & Development effective January 1, 2025. He will retire from Vistra Corp. on or about April 1, 2025. His responsibilities will be assumed by current members of the leadership team to ensure a smooth transition .

    Financial Actions

      Debt Issuance

      ·
      Dec 16, 2024, 11:34 AM

      Vistra Operations Company LLC, a subsidiary of Vistra Corp., has recently entered into a Credit Agreement Amendment on December 10, 2024. This amendment involves several key changes to their financial obligations:

      1. Interest Rate Reduction: The amendment reduces the interest rate margins applicable to both ABR Loans and Term SOFR Loans by 25 basis points. This change is likely to decrease the company's interest expenses, potentially improving its financial health by reducing the cost of borrowing .

      2. Amendment of Provisions: The amendment also includes changes to other provisions of the Credit Agreement, which could affect the company's financial flexibility and operational strategies .

      3. Seventeenth Amendment Repricing Transaction: This involves prepayment or repayment of 2018 Incremental Term Loans with new or replacement loans aimed at reducing the yield on these loans. This could potentially improve the company's balance sheet by optimizing its debt structure .

      These changes are part of Vistra's ongoing efforts to manage its financial obligations effectively, which could have a positive impact on its balance sheet and overall financial health. The amendment is documented in the company's Form 8-K filed with the SEC .

      Debt Issuance

      ·
      Dec 9, 2024, 10:47 PM

      VST has recently created a direct financial obligation or entered into an off-balance sheet arrangement. The details of this obligation are incorporated by reference in Item 1.01 of their current report .

      New Share Buyback Program

      ·
      Dec 9, 2024, 10:46 PM

      The new buyback program involves an offer to repurchase notes upon a Change of Control Trigger Event. Holders can require the company to repurchase their notes at 101% of the principal amount, plus accrued interest. This offer must be made within 30 days of the event, with a purchase date set between 10 to 60 days from the notice .