2026 EBITDA Sensitivity
Q: How sensitive is 2026 EBITDA if fully unhedged?
A: Vistra is confident in the $6 billion EBITDA forecast for 2026, given current curves and hedge percentages. Sensitivity to power and spark moves is roughly twice that of 2025.

Free Cash Flow Conversion
Q: What drives free cash flow conversion from 50% to 60%?
A: Vistra targets a 55% to 60% free cash flow conversion rate. This year's lower rate is due to timing issues: a $100 million non-cash EBITDA increase from accounting changes, and timing mismatches in retail hedging costs versus revenue recognition. Adjusting for these, conversion would be closer to 55%, with improvements expected to reach 60% starting next year.

Share Buybacks Decision-Making
Q: What metrics guide your share buyback decisions?
A: Vistra considers free cash flow yield compared to alternative capital uses. While free cash flow yields have decreased with share price appreciation, they remain attractive. The company plans to continue buybacks totaling $2.25 billion through 2025 and evaluates other growth opportunities that offer competitive returns.

Coal Plant Retirement and EPA Compliance
Q: Any change in plans for retiring coal plants?
A: Vistra intends to retire all but two coal plants, Martin Lake and Oak Grove, by 2027 to comply with EPA regulations. Extending their operation would require carbon capture technology or co-firing with 40% gas, which is challenging. Operating in current coal configurations seems unlikely for Ohio and Illinois sites.

PJM Capacity Market Expectations
Q: What capacity price assumptions are embedded for PJM?
A: Vistra expects PJM capacity prices to improve modestly but remains conservative in forecasts. Bilateral trades indicate clears around $90 to $100 per megawatt-day. Historical averages were about $100, and supply-demand tightening suggests potential for higher prices.

Investment-Grade Metrics Timeline
Q: When will you reach investment-grade metrics?
A: Vistra is currently at 3x leverage and aims to reach investment-grade metrics in the next year or two. Deleveraging will occur through EBITDA growth and debt repayment from unallocated cash. Detailed discussions with rating agencies will follow upgrades to one notch below investment grade.

New Gas Builds in ERCOT
Q: What's your view on new gas builds and scarcity in ERCOT?
A: Vistra observes a modest increase in gas project applications, particularly peaker plants, due to EPA rules making combined cycle plants less attractive. Demand growth supports new supply, and Texas remains conducive to energy development. Current fundamentals differ from the early 2000s turbine surge.

2026 Hedging and Liquidity
Q: Can you elaborate on 2026 hedging and pricing?
A: At the end of 2023, Vistra was 25% hedged for 2026, increasing to 50% recently due to market movements and improved liquidity. Hedging is opportunistic, based on price, fundamentals, and market liquidity. Increased liquidity allows for larger hedge volumes, and further hedging may continue as conditions evolve.

Nuclear Fuel Supply and Hedging
Q: How are you positioned on nuclear fuel supply?
A: Vistra has secured physical supply for outages through 2027 and is significantly hedged financially into 2028. The average nuclear fuel cost is about $7 per megawatt-hour over this period, despite spot prices at $11 to $12. The company actively manages risks amid uncertainties like the Russian ban and aims to ensure ample market liquidity.

Data Center Opportunities with Nuclear Plants
Q: Update on data center opportunities at nuclear sites?
A: Interest in colocating data centers at Vistra's nuclear sites has increased. Two-unit sites are more desirable due to redundancy. Potential partners prioritize speed and reliability. Vistra is exploring options across its 40,000 MW fleet in 12 states, engaging in multiple discussions to identify the best opportunities.

Data Centers at Gas Plants and New Builds
Q: Are you considering data centers at gas plants or new builds?
A: Vistra sees existing combined cycle gas plants as suitable for data center colocation. Building new combined cycle plants is less attractive due to EPA regulations and carbon capture costs. Peaker plants and hybrid solutions may play a role, but investing in new baseload assets is challenging amid regulatory uncertainties.

Vistra Tradition Stand-Alone Viability
Q: Has rising sparks changed thoughts on Vistra Tradition's viability?
A: Increased sparks and fixed-price power have highlighted the value of Vistra Tradition. Integration with Vistra Vision's retail business provides operational advantages. While Tradition assets are hard to replicate and more valuable, there are no current plans to separate the businesses or provide GAAP segment reporting.

Retail Contract Duration and Pricing
Q: What's the average duration of retail contracts and pricing flexibility?
A: Business contracts range from 1 to 10 years, while residential contracts are typically 1 to 2 years. Sustained changes in wholesale power costs are reflected in retail prices over time. The integrated model aims for steady per-megawatt-hour margins, adjusting retail revenues with wholesale cost movements.

Regional Hedging Differences
Q: Is there a difference in hedging between ERCOT and PJM?
A: Vistra did not specify hedge percentages by region but acknowledged that ERCOT and PJM are the two largest portfolios. Hedging depends on market depth and the ability to transact volumes comfortably without impacting prices significantly.

Market Share Growth and Customer Counts
Q: How is market share and customer growth in retail?
A: Vistra's retail segment showed strong performance, with residential customer counts growing by 13% year-over-year due to the Energy Harbor acquisition and organic growth. The company aims to grow with or exceed Texas's market growth rate of 1.5% to 2%, leveraging multiple brands and advanced analytics to target specific populations effectively.