Table of $48 million and a decrease of $19 million, respectively, to the carrying value of the TRA obligation as a result of adjustments to the timing of forecasted taxable income and state apportionment due to the expansion of Vistra Energy's state income tax profile, including Dynegy and Crius acquisitions.Contents

During the three and nine months ended September 30, 2018, we recorded a decrease of $32 million and an increase of $14 million, respectively, to the carrying value of the TRA obligation related to changes in the timing of estimated payments resulting from the Merger, including new multistate tax impacts.

The following table summarizes the changes to the TRA obligation, reported as other current liabilities and Tax Receivable Agreement obligation in our condensed consolidated balance sheets, for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019:


	Six Months Ended June 30,
	2020		2019
TRA obligation at the beginning of the period	$	455	$	420
Accretion expense	34		31
Changes in tax assumptions impacting timing of payments (a)	(20)		(67)
Impacts of Tax Receivable Agreement	14		(36)

TRA obligation at the end of the period	469		384
Less amounts due currently	(1)		—
TRA obligation at the end of the period (noncurrent)	$	468	$	384

____________

(a)During the three and six months ended June 30, 2020, we recorded decreases to the carrying value of the TRA obligation totaling $11 million and $20 million, respectively, as a result of adjustments to forecasted taxable income, including the impacts of the CARES Act changes to Section 163(j) percentage limitation amount. During the three and six months ended June 30, 2019, we recorded decreases to the carrying value of the TRA obligation totaling $48 million and ~~2018:~~$67 million, respectively, as a result of adjustments to forecasted taxable income and higher net operating losses acquired in the Merger.

Nine Months Ended September 30,
2019 2018
TRA obligation at the beginning of the period $ 420
$ 357
Accretion expense 45
51
Changes in tax assumptions impacting timing of payments (19 ) 14
Impacts of Tax Receivable Agreement 26
65
TRA obligation at the end of the period 446
422
Less amounts due currently (3 ) (20 )
Noncurrent TRA obligation at the end of the period $ 443
$ 402

As of ~~September~~June 30, ~~2019,~~2020, the estimated carrying value of the TRA obligation totaled ~~$446~~$469 million, which represents the discounted amount of projected payments under the TRA. The projected payments are based on certain assumptions, including but not limited to (a) the federal corporate income tax rate of 21%, (b) estimates of our taxable income in the current and future years and (c) additional states that Vistra ~~Energy~~ now operates in, including the relevant tax rate and apportionment factor for each state. Our taxable income takes into consideration the current federal tax code, various relevant state tax laws and reflects our current estimates of future results of the business. These assumptions are subject to change, and those changes could have a material impact on the carrying value of the TRA obligation. As of ~~September~~June 30, ~~2019,~~2020, the aggregate amount of undiscounted federal and state payments under the TRA is estimated to be approximately ~~$1.3~~$1.4 billion, with more than half of such amount expected to be ~~attributable to~~paid during the ~~first~~next 15 ~~tax~~ years, ~~following Emergence,~~ and the final payment expected to be made ~~approximately 40 years following Emergence~~around the year 2056 (if the TRA is not terminated earlier pursuant to its terms).

The carrying value of the obligation is being accreted to the amount of the gross expected obligation using the effective interest method. Changes in the amount of this obligation resulting from changes to either the timing or amount of TRA payments are recognized in the period of change and measured using the discount rate inherent in the initial fair value of the obligation.

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9.	~~EARNINGS PER SHARE~~

9. EARNINGS PER SHARE

Basic earnings per share available to common ~~shareholders~~stockholders are based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the treasury stock method and includes the effect of all potential issuances of common shares under stock-based incentive compensation arrangements.


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net income attributable to common stock — basic	$	166	$	356	$	222	$	581
Weighted average shares of common stock outstanding — basic (a)	488,680,442		499,778,235		488,312,503		499,213,522
Net income per weighted average share of common stock outstanding — basic	$	0.34	$	0.71	$	0.45	$	1.16
Dilutive securities: Stock-based incentive compensation plan	1,788,293		7,722,148		2,397,429		8,035,398
Weighted average shares of common stock outstanding — diluted	490,468,735		507,500,383		490,709,932		507,248,920
Net income per weighted average share of common stock outstanding — diluted	$	0.34	$	0.70	$	0.45	$	1.15

Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Net income attributable to common stock — basic $ 113
$ 330
$ 694
$ 132
Weighted average shares of common stock outstanding — basic 490,562,179
533,142,189
486,215,356
500,781,573
Net income per weighted average share of common stock outstanding — basic $ 0.23
$ 0.62
$ 1.43
$ 0.26
Dilutive securities: Stock-based incentive compensation plan 3,108,116
7,830,613
4,011,387
7,347,415
Weighted average shares of common stock outstanding — diluted 493,670,295
540,972,802
490,226,743
508,128,988
Net income per weighted average share of common stock outstanding — diluted $ 0.23
$ 0.61
$ 1.42
$ 0.26
____________

(a)For the three and six months ended June 30, 2019, the minimum settlement amount of tangible equity units, or 15,207,600 shares, are considered to be outstanding and are included in the computation of basic net income per share.

Stock-based incentive compensation plan awards excluded from the calculation of diluted earnings per share because the effect would have been antidilutive totaled ~~7,145,662~~13,978,168 and ~~7,094,687 shares~~2,910,226 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~7,104,523~~12,123,691 and ~~5,651,527~~7,577,246 shares for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.


~~10.~~	~~ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM~~

10. ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM

TXU Energy Receivables Company LLC (RecCo), an indirect subsidiary of Vistra, ~~Energy,~~ has an accounts receivable financing facility (Receivables Facility) provided by issuers of asset-backed commercial paper and commercial banks (Purchasers). The Receivables Facility was renewed in July ~~2019,~~2020, extending ~~its scheduled termination~~the term of the Receivables Facility from ~~August 2019~~July 2020 to July ~~2020,~~2021, with the ability to borrow ~~up to $600~~$550 million beginning with the settlement date in July 2020 until the settlement date in August 2020, $625 million from the settlement date in August 2020 until the settlement date in November ~~2019, after which~~2020, $550 million from the ~~amount available~~settlement date in November 2020 until the settlement date in December 2020 and $450 million thereafter for ~~RecCo to borrow will revert to $450 million.~~the remaining term of the Receivables Facility.

Under the Receivables Facility, TXU Energy and Dynegy Energy Services are obligated to sell or contribute, on an ongoing basis and without recourse, their accounts receivable to TXU Energy's special purpose subsidiary, RecCo, a consolidated, wholly owned, bankruptcy-remote, direct subsidiary of TXU Energy. RecCo, in turn, is subject to certain conditions, and may, from time to time, sell an undivided interest in all the receivables acquired from TXU Energy and Dynegy Energy Services to the Purchasers, and its assets and credit are not available to satisfy the debts and obligations of any person, including affiliates of RecCo. Amounts funded by the Purchasers to RecCo are reflected as short-term borrowings on the condensed consolidated balance sheets. Proceeds and repayments under the Receivables Facility are reflected as cash flows from financing activities in our condensed consolidated statements of ~~consolidated~~ cash flows. Receivables transferred to the Purchasers remain on ~~Vistra Energy's~~Vistra's balance sheet and Vistra ~~Energy~~ reflects a liability equal to the amount advanced by the Purchasers. The Company records interest expense on amounts advanced. TXU Energy continues to service, administer and collect the trade receivables on behalf of RecCo and the Purchasers, as applicable.

As of ~~September~~June 30, ~~2019,~~2020, outstanding borrowings under the receivables facility totaled ~~$600~~$450 million and were supported by ~~$835~~$639 million of RecCo gross receivables. As of December 31, ~~2018,~~2019, outstanding borrowings under the receivables facility totaled ~~$339 million.~~$450 million and were supported by $629 million of RecCo gross receivables.


~~11.~~	~~LONG-TERM DEBT~~

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11. LONG-TERM DEBT

Amounts in the table below represent the categories of long-term debt obligations incurred by the Company.

September 30,
2019 December 31,
2018
Vistra Operations Credit Facilities $ 3,798
$ 5,813
Vistra Operations Senior Secured Notes:
3.550% Senior Secured Notes, due July 15, 2024 1,200
—
4.300% Senior Secured Notes, due July 15, 2029 800
—
Total Vistra Operations Senior Secured Notes 2,000
—
Vistra Operations Senior Unsecured Notes:
5.500% Senior Notes, due September 1, 2026 1,000
1,000
5.625% Senior Notes, due February 15, 2027 1,300
—
5.000% Senior Notes, due July 31, 2027 1,300
—
Total Vistra Operations Senior Unsecured Notes 3,600
1,000
Vistra Energy Senior Unsecured Notes:
7.375% Senior Notes, due November 1, 2022 —
1,707
5.875% Senior Notes, due June 1, 2023 500
500
7.625% Senior Notes, due November 1, 2024 (a) 387
1,147
8.034% Senior Notes, due February 2, 2024 —
25
8.000% Senior Notes, due January 15, 2025 81
81
8.125% Senior Notes, due January 30, 2026 166
166
Total Vistra Energy Senior Unsecured Notes 1,134
3,626
Other:
7.000% Amortizing Notes, due July 1, 2019 —
24
Forward Capacity Agreements 191
236
Equipment Financing Agreements 114
120
Mandatorily redeemable subsidiary preferred stock (b) 70
70
8.82% Building Financing due semiannually through February 11, 2022 (c) 15
21
9.5% Promissory Notes, due July 2025 44
—
2% Term Loan due February 2027 8
—
Total other long-term debt 442
471
Unamortized debt premiums, discounts and issuance costs (d) (26 ) 155
Total long-term debt including amounts due currently 10,948
11,065
Less amounts due currently (220 ) (191 )
Total long-term debt less amounts due currently $ 10,728
$ 10,874


	June 30, 2020		December 31, 2019
Vistra Operations Credit Facilities	$	2,586	$	2,700
Vistra Operations Senior Secured Notes:
3.550% Senior Secured Notes, due July 15, 2024	1,500		1,500
3.700% Senior Secured Notes, due January 30, 2027	800		800
4.300% Senior Secured Notes, due July 15, 2029	800		800
Total Vistra Operations Senior Secured Notes	3,100		3,100
Vistra Operations Senior Unsecured Notes:
5.500% Senior Unsecured Notes, due September 1, 2026	1,000		1,000
5.625% Senior Unsecured Notes, due February 15, 2027	1,300		1,300
5.000% Senior Unsecured Notes, due July 31, 2027	1,300		1,300
Total Vistra Operations Senior Unsecured Notes	3,600		3,600
Vistra Senior Unsecured Notes:
5.875% Senior Unsecured Notes, due June 1, 2023	—		500
8.000% Senior Unsecured Notes, due January 15, 2025	—		81
8.125% Senior Unsecured Notes, due January 30, 2026 (a)	166		166
Total Vistra Senior Unsecured Notes	166		747
Other:
Forward Capacity Agreements	101		161
Equipment Financing Agreements	91		99
8.82% Building Financing due semiannually through February 11, 2022 (b)	13		15
Other	4		12
Total other long-term debt	209		287
Unamortized debt premiums, discounts and issuance costs (c)	(63)		(55)
Total long-term debt including amounts due currently	9,598		10,379
Less amounts due currently	(337)		(277)
Total long-term debt less amounts due currently	$	9,261	$	10,102

____________


~~(a)~~	On November 1, 2019, Vistra Energy redeemed all outstanding 7.625% Senior Notes due 2024 at a redemption price equal to 103.8% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding the date of redemption.


~~(b)~~	Shares of mandatorily redeemable preferred stock in PrefCo. This subsidiary preferred stock is accounted for as a debt instrument under relevant accounting guidance. On October 3, 2019, PrefCo redeemed all of the issued and outstanding preferred stock at a price per share equal to the preferred liquidation amount, plus accrued and unpaid dividends to and including the date of redemption.


~~(c)~~	Obligation related to a corporate office space finance lease. This obligation will be funded by amounts held in an escrow account that is reflected in other noncurrent assets in our condensed consolidated balance sheets.


~~(d)~~	~~Includes impact of recording debt assumed in the Merger at fair value.~~

(a)Vistra redeemed all of its outstanding 8.125% senior unsecured notes due 2026 in July 2020.

(b)Obligation related to a corporate office space finance lease. This obligation will be funded by amounts held in an escrow account that is reflected in other noncurrent assets in our condensed consolidated balance sheets.

(c)Includes impact of recording debt assumed in the Merger at fair value.

Vistra Operations Credit Facilities

At ~~September~~June 30, ~~2019,~~2020, the Vistra Operations Credit Facilities consisted of up to ~~$6.523~~$5.311 billion in senior secured, first-lien revolving credit commitments and outstanding term loans, which consisted of revolving credit commitments of up to $2.725 billion, including a $2.35 billion letter of credit sub-facility (Revolving Credit Facility) and term loans of ~~$1.897 billion (Term Loan B-1 Facility) and $1.901~~$2.586 billion (Term Loan B-3 Facility).

In March 2020, Vistra Operations repurchased $100 million principal amount of Term Loan B-3 Facility borrowings at a weighted average price of $93.875 and cancelled them. We recorded an extinguishment gain of $6 million on the transaction in the six months ended June 30, 2020.

During the six months ended June 30, 2020, we borrowed $925 million and repaid $725 million under the Revolving Credit Facility, with proceeds from the borrowings used for general corporate purposes.

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In June 2019, Vistra Operations used the net proceeds from the June 2019 Senior Secured Notes ~~Offering described below~~Offerings (described below) to repay $889 million under the Term Loan B-1 Facility, the entire amount outstanding of $977 million under Term Loan B-2 Facility (and together with the Term Loan B-1 Facility and the Term Loan B-3 Facility, the Term Loan B Facility) and $134 million under the Term Loan B-3 Facility. We recorded an extinguishment loss of $4 million on the transactions in the three months ended June 30, 2019.

~~These amounts reflect amendments to~~In March 2019 and May 2019 the Vistra Operations Credit Facilities ~~in March 2019 and May 2019~~were amended whereby we obtained $225 million of incremental Revolving Credit Facility commitments. The letter of credit sub-facility was also increased by $50 million. Fees and expenses related to the amendments to the Vistra Operations Credit Facilities totaled $2 million infor the ~~nine~~six months ended ~~September~~June 30, 2019, which were capitalized as a noncurrent asset.

These amounts also reflect an amendment to the Vistra Operations Credit Facilities in June 2018 whereby we incurred $2.050 billion of borrowings under the new Term Loan B-3 Facility and obtained $1.640 billion of incremental Revolving Credit Facility commitments. The letter of credit sub-facility was also increased by $1.585 billion. The maturity date of the Revolving Credit Facility was extended from August 4, 2021 to June 14, 2023. As discussed below, the proceeds from the Term Loan B-3 Facility were used to repay borrowings under the credit agreement that Vistra Energy assumed from Dynegy in connection with the Merger. Additionally, letter of credit term loans totaling $500 million (Term Loan C Facility) were repaid using $500 million of cash from collateral accounts used to backstop letters of credit. Fees and expenses related to the amendment to the Vistra Operations Credit Facilities totaled $42 million in the nine months ended September 30, 2018, of which $23 million was recorded as interest expense and other charges on the statements of consolidated income, $9 million was capitalized as a reduction in the carrying amount of the debt and $10 million was capitalized as a noncurrent asset.

The Vistra Operations Credit Facilities and related available capacity at ~~September~~June 30, ~~2019~~2020 are presented below.


		September 30, 2019								June 30, 2020
Vistra Operations Credit Facilities	Maturity Date	Facility Limit		Cash Borrowings		Available Capacity		Vistra Operations Credit Facilities	Maturity Date	Facility Limit		Cash Borrowings		Available Capacity
Revolving Credit Facility (a)	June 14, 2023	$	2,725	$	—	$	1,844	Revolving Credit Facility (a)	June 14, 2023	$	2,725	$	550	$	1,287
Term Loan B-1 Facility	August 4, 2023	1,897		1,897		—
Term Loan B-3 Facility	December 31, 2025	1,901		1,901		—		Term Loan B-3 Facility	December 31, 2025	2,586		2,586		—
Total Vistra Operations Credit Facilities		$	6,523	$	3,798	$	1,844	Total Vistra Operations Credit Facilities		$	5,311	$	3,136	$	1,287

Table of ~~this matter, or estimate a range of reasonably possible costs, the result could have a material impact on our results of operations, liquidity or financial condition.~~Contents

Effluent Limitation Guidelines (ELGs)

In November 2015, the EPA revised the ELGs for steam electricity generation facilities, which will impose more stringent standards (as individual permits are renewed) for wastewater streams, such as flue gas desulfurization (FGD), fly ash, bottom ash and flue gas mercury control wastewaters. Various parties filed petitions for review of the ELG rule, and the petitions were consolidated in the Fifth Circuit Court. In April 2017, the EPA granted petitions requesting reconsideration of the ELG ~~final~~ rule and administratively stayed the rule's compliance date deadlines. In August 2017, the EPA announced that its reconsideration of the ~~2015~~ ELG ~~final~~ rule would be limited to a review of the effluent limitations applicable to FGD and bottom ash wastewaters and the agency subsequently postponed the earliest compliance dates in the ~~2015~~ ELG ~~Rule~~rule for the application of effluent limitations for FGD and bottom ash wastewaters from November 1, 2018 to November 1, 2020. Based on these administrative developments, the Fifth Circuit Court agreed to sever and hold in abeyance challenges to effluent limitations. The remainder of the case proceeded, and in April 2019 the Fifth Circuit Court vacated and remanded portions of the EPA's ELG rule pertaining to effluent limitations for legacy wastewater and leachate. In November 2019, the EPA issued a proposal that would extend the compliance deadline for FGD wastewater to no later than December 31, 2025 and maintains the December 31, 2023 compliance date for bottom ash transport water. The ~~EPA has not yet~~proposal also creates new sub-categories of facilities with more flexible FGD compliance options, including a retirement exemption to 2028 and a low utilization boiler exemption. The proposed ~~or finalized a~~ rule ~~reconsidering~~also modified some of the FGD ~~and bottom ash wastewater provisions of~~final effluent limitations. We filed comments on the ~~2015 ELG rule.~~proposal in January 2020.

Given the EPA's decision to reconsider the FGD and bottom ash wastewater provisions of the ELG rule, the rule postponing the ELG rule's earliest compliance dates for those provisions, the uncertainty stemming from the vacatur of the effluent limitations for legacy wastewater and leachate, and the intertwined relationship of the ELG rule with the Coal Combustion Residuals rule discussed below, which is also being reconsidered by the EPA, as well as pending legal challenges concerning both rules, substantial uncertainty exists regarding our projected capital expenditures for ELG compliance, including the timing of such expenditures. ~~While we cannot predict the outcome of this matter, or estimate a range of costs, it could have a material impact on our results of operations, liquidity or financial condition.~~

~~New Source Review and~~ CAA Matters

~~New Source Review~~ — Since 1999, the EPA has engaged in a nationwide enforcement initiative to determine whether coal-fueled power plants failed to comply with the requirements of the New Source Review (NSR) and New Source Performance Standard provisions under the CAA when the plants implemented changes. The EPA's NSR initiative focuses on whether projects performed at power plants triggered various permitting requirements, including the need to install pollution control equipment.

In August 2013, the U.S. Department of Justice (DOJ), acting as the attorneys for the EPA, filed a civil enforcement lawsuit against Luminant in federal district court in Dallas, alleging violations of the CAA, including its NSR standards, at our Big Brown and Martin Lake generation facilities. The lawsuit requests (i) the maximum civil penalties available under the CAA to the government of up to $32,500 to $37,500 per day for each alleged violation, depending on the date of the alleged violation, and (ii) injunctive relief, including an order to apply for pre-construction permits which may require the installation of best available control technology at the affected units. In August 2015, the district court granted Luminant's motion to dismiss seven of the nine claims asserted by the EPA in the lawsuit.

In January 2017, the EPA dismissed its two remaining claims with prejudice and the district court entered final judgment in Luminant's favor. In March 2017, the EPA and the Sierra Club appealed the final judgment to the Fifth Circuit Court. In October 2018, the Fifth Circuit Court affirmed in part, reversed in part, and remanded to the district court. The Fifth Circuit Court's decision held that the district court properly dismissed all of the civil penalties as time-barred. The Fifth Circuit Court further held that the grounds cited by the district court did not support dismissal of the injunctive relief claims at this early stage of the case and remanded the case back to the district court for further consideration. In November 2018, we filed a petition for rehearing en banc on two issues and the EPA has filed a response to that petition. In July 2019, the full Fifth Circuit Court granted our en banc petition and oral argument was scheduled to be held in September 2019. Following the Fifth Circuit Court's grant of oral argument, in August 2019, the EPA and the Sierra Club moved to dismiss their appeals of the district court's judgment, which the Fifth Circuit granted, ending this litigation.

Zimmer NOVs— In December 2014, the EPA issued a notice of violation (NOV) alleging violation of opacity standards at the Zimmer facility. The EPA previously had issued NOVs to Zimmer in 2008 and 2010 alleging violations of the CAA, the Ohio State Implementation Plan and the station's air permits including standards applicable to opacity, sulfur dioxide, sulfuric acid mist and heat input. ~~The NOVs remain unresolved.~~

~~Edwards CAA Citizen Suit~~ — In ~~April 2013, environmental groups~~January 2020, the U.S. Department of Justice filed a ~~CAA citizen suit~~complaint and proposed consent decree agreed to by Dynegy Zimmer, LLC in the U.S. District Court for the ~~Central~~Southern District of ~~Illinois alleging violations of opacity~~Ohio that would resolve claims alleged in the 2008, 2010 and particulate matter limits at our MISO segment's Edwards facility. In August 2016, the district court granted the plaintiffs' motion for summary judgment on certain liability issues. In March 2019, the court denied the parties' motions for summary judgment on remedy issues. In September 2019, the parties to the lawsuit announced a proposed settlement which, if2014 NOVs. The District Court approved ~~by the court, would require the retirement of the Edwards plant by the end of 2022 and funding for certain projects~~ that benefit Peoria-area communities. On October 15, 2019, following EPA and DOJ review, the parties filed a joint motion seeking the court's approval of a Consent Decree memorializing this settlement. If approved by the court, the proposed consent decree ~~would resolve this lawsuit. See Note 4 for information regarding the retirement of the Edwards plant.~~

~~Ultimate resolution of these CAA matters could have a material adverse impact on our future financial condition, results of operations, and cash flows. A resolution could result~~ in increased capital expenditures for the installation of pollution control equipment, increased operations and maintenance expenses, and penalties, or could result in an order or a decision to retire these plants. While we cannot predict the outcome of the unresolved legal proceedings, or estimate a range of costs, they couldMay 2020. The consent decree does not have a material impact on our results of operations, liquidity or financial condition.

Coal Combustion ~~Residuals/~~Residuals (CCR)/Groundwater

In July 2018, the EPA published a final rule, which became effective in August 2018, that amends certain provisions of the ~~Coal Combustion Residuals (CCR)~~CCR rule that the agency issued in 2015. Among other changes, the 2018 revisions extend closure deadlines to October 31, 2020, related to the aquifer location restriction and groundwater monitoring requirements. Also, onin August ~~21,~~ 2018, the D.C. Circuit Court issued a decision that vacates and remands certain provisions of the 2015 CCR rule, including an applicability exemption for legacy impoundments. The EPA is expected to undertake further revisions to its CCR regulations in response to the D.C. Circuit Court's ruling. In October 2018, the rule that extends certain closure deadlines to 2020 was challenged in the D.C. Circuit Court. In March 2019, the D.C. Circuit Court granted the EPA's request for remand without vacatur. In December 2019, the EPA issued a proposed rule containing a revised closure deadline for unlined CCR impoundments and new procedures for seeking extensions of that revised closure deadline. We filed comments on the proposal in January 2020. In July 2020, the EPA finalized the December 2019 proposal with a final deadline of April 11, 2021 to initiate closure of unlined CCR impoundments. The ~~EPA is expected~~final rule allows a generation plant to ~~issue proposed rules~~seek the EPA's approval to retire by either 2023 or 2028 (depending on ~~these and other aspects~~the size of the ~~CCR rule in the near term. While we cannot predict the impacts~~impoundment at issue) as a means of ~~these rule revisions (including whether and if so how the states in which we operate will utilize the authority delegated~~compliance. We may decide to ~~the states through the revisions), or estimate a range~~avail ourselves of ~~reasonably possible costs related to these revisions, the changes that result from these revisions could have a material impact on~~this compliance mechanism for some of our ~~results of operations, liquidity or financial condition.~~facilities.

MISO ~~Segment~~ — In 2012, the Illinois Environmental Protection Agency (IEPA) issued violation notices alleging violations of groundwater standards onsite at our Baldwin and Vermilion facilities' CCR surface impoundments. InThese violation notices remain unresolved; however, in 2016, the IEPA approved our closure and post-closure care plans for the Baldwin old east, east, and west fly ash CCR surface impoundments. We are working towards implementation of those closure plans.

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At our retired Vermilion facility, which was not subject to the EPA's 2015 CCR rule until the aforementioned D.C. Circuit ~~court~~Court decision in August 2018, we submitted proposed corrective action plans involving closure of 2 CCR surface impoundments (i.e., the old east and the north impoundments) to the IEPA in 2012, ~~with~~and we submitted revised plans ~~submitted~~ in 2014. In May 2017, in response to a request from the IEPA for additional information regarding the closure of these Vermilion surface impoundments, we agreed to perform additional groundwater sampling and closure options and riverbank stabilizing options. In May 2018, Prairie Rivers Network filed a citizen suit in federal court in Illinois against ~~our subsidiary Dynegy Midwest Generation, LLC (DMG),~~DMG, alleging violations of the Clean Water Act for alleged unauthorized discharges. In August 2018, we filed a motion to dismiss the lawsuit. In November 2018, the district court granted our motion to dismiss and judgment was entered in our favor. Plaintiffs have appealed the judgment to the ~~U.S~~U.S. Court of Appeals for the Seventh ~~Circuit. That~~Circuit and briefing on that appeal is now ~~stayed.~~underway. In April 2019, PRN also filed a complaint against DMG before the IPCB, alleging that groundwater flows allegedly associated with the ash impoundments at the Vermilion site have resulted in exceedances both of surface water standards and Illinois groundwater standards dating back to 1992. This matter is in the very early ~~stages and we dispute the allegations in the complaint. We dispute the allegations in both of these matters and will vigorously defend our position.~~stages.

In 2012, the IEPA issued violation notices alleging violations of groundwater standards at the Newton and Coffeen facilities' CCR surface impoundments. We are addressing these CCR surface impoundments in accordance with the federal CCR rule. In June 2018, the IEPA issued a violation notice for alleged seep discharges claimed to be coming from the surface impoundments at our retired Vermilion facility and that notice has since been referred to the Illinois Attorney General.

In December 2018, the Sierra Club filed a complaint with the IPCB alleging the disposal and storage of coal ash at the Coffeen, Edwards and Joppa generation facilities are causing exceedances of the applicable groundwater standards. ~~We dispute the allegations and will vigorously defend our position.~~

In July 2019, coal ash disposal and storage legislation in Illinois was enacted. The legislation addresses state requirements for the proper closure of coal ash ponds in the state of Illinois. The law tasks the IEPA and the IPCB to set up a series of guidelines, rules and permit requirements for closure of ash ponds. WeIn March 2020, IEPA issued its proposed rule and we expect the rulemaking process should ~~take about 18 months to complete.~~be completed by early 2021. Under the ~~new law,~~proposed rule, coal ash impoundment owners would be required to submit a closure alternative analysis to the IEPA for the selection of the best method for coal ash remediation at a particular site. The ~~law~~proposed rule does not mandate closure by removal at any site. ~~With respect to near-term costs,~~Public hearings for the ~~law requires that operators pay a one-time fee of $50,000~~proposed rule have been scheduled for ~~each closed site~~August 2020 and ~~$75,000 for each open site. This one-time fee is paid six months after~~September 2020. We will provide testimony during the effective date of the law. The law also requires annual permit fees. While we cannot predict the outcome of these proceedings, or estimate a range of costs, they could have a material impact on our results of operations, liquidity or financial condition.hearing process.

For all of the above matters, if ~~remediation~~certain corrective action measures, ~~concerning~~including groundwater treatment or removal of ash, are ~~necessary~~required at any of our coal-fueled facilities, we may incur significant costs that could have a material adverse effect on our financial condition, results of operations and cash flows. ~~At this time, in part because of~~Until the revisions to the ~~CCR rule that the EPA published in July 2018 and the D.C. Circuit Court's vacatur and remand of certain provisions of the~~ EPA's ~~2015~~ CCR rule and the Illinois coal ash rulemaking are finalized and we ~~cannot reasonably estimate~~undertake further site specific evaluations required by each program we will not know the ~~costs, or~~full range of costs of groundwater remediation, if any, that ultimately may be ~~required. The~~required under those rules. However, the currently anticipated CCR surface impoundment and landfill closure costs, as contained in our AROs, reflect the costs of ~~well-accepted~~ closure methods that our operations and environmental services teams believe are appropriate and protective of the environment for each location.

MISO 2015-2016 Planning Resource Auction

In May 2015, 3 complaints were filed at FERC regarding the Zone 4 results for the 2015-2016 planning resource auction (PRA) conducted by MISO. Dynegy is a named party in 1 of the complaints. The complainants, Public Citizen, Inc., the Illinois Attorney General and Southwestern Electric Cooperative, Inc. (Complainants), challenged the results of the PRA as unjust and unreasonable, requested rate relief/refunds, and requested changes to the MISO planning resource auction structure going forward. Complainants also alleged that Dynegy may have engaged in economic or physical withholding in Zone 4 constituting market manipulation in the PRA. The Independent Market Monitor for MISO (MISO IMM), which was responsible for monitoring the PRA, determined that all offers were competitive and that no physical or economic withholding occurred. The MISO IMM also stated, in a filing responding to the complaints, that there is no basis for the remedies sought by the Complainants. We filed our answer to these complaints explaining that we complied fully with the terms of the MISO tariff in connection with the PRA and disputing the allegations. The Illinois Industrial Energy Consumers filed a related complaint at FERC against MISO in June 2015 requesting prospective changes to the MISO tariff. Dynegy also responded to this complaint with respect to Dynegy's conduct alleged in the complaint.

In October 2015, FERC issued an order of nonpublic, formal investigation (the investigation) into whether market manipulation or other potential violations of FERC orders, rules and regulations occurred before or during the PRA.

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In December 2015, FERC issued an order on the complaints requiring a number of prospective changes to the MISO tariff provisions effective as of the 2016-2017 planning resource auction. The order did not address the arguments of the Complainants regarding the PRA and stated that those issues remained under consideration and would be addressed in a future order.

In July 2019, FERC issued an order denying the remaining issues raised by the complaints and noted that the investigation into Dynegy was closed. FERC found that Dynegy's conduct did not constitute market manipulation and the results of the PRA were just and reasonable because the PRA was conducted in accordance with MISO's tariff. With the issuance of the order, this matter has been resolved in Dynegy's favor. The request for rehearing was denied by FERC in March 2020. The order was appealed by Public Citizen, Inc. to the D.C. Circuit Court in May 2020, and Vistra, Dynegy and Illinois Power Marketing Company intervened in the case in June 2020. The appeal remains ~~subject to rehearing at FERC and appeal.~~pending.

Other Matters

We are involved in various legal and administrative proceedings in the normal course of business, the ultimate resolutions of which, in the opinion of management, are not anticipated to have a material effect on our results of operations, liquidity or financial condition.


~~14.~~	~~EQUITY~~

13. EQUITY

Share Repurchase Program

In June 2018, we announced that the Board had authorized a share repurchase program under which up to $500 million of our outstanding common stock may be purchased, and this authorized amount was fully utilized in 2018. In November 2018, we announced that the Board had authorized an incremental share repurchase program ~~(Program)~~ under which up to $1.250 billion of our outstanding stock may be ~~purchased.~~purchased, resulting in an aggregate $1.750 billion share repurchase program (Share Repurchase Program). No repurchases were made under the Share Repurchase Program in the three and six months ended June 30, 2020. In the three months ended ~~September~~June 30, 2019, ~~7,407,199~~8,558,712 shares of our common stock were repurchased under the Share Repurchase Program for approximately ~~$171~~$212 million (including related fees and expenses) at an average price of ~~$23.07~~$24.72 per share of common stock.In the ~~nine~~six months ended ~~September~~June 30, 2019, ~~25,507,528~~18,100,329 shares of our common stock were repurchased under the Share Repurchase Program for approximately ~~$619~~$448 million (including related fees and expenses) at an average price of ~~$24.27~~$24.75 per share of common stock. On a cumulative basis, ~~37,580,619~~59,817,182 shares of our common stock have been repurchased under the Share Repurchase Program for approximately ~~$897 million~~$1.418 billion (including related fees and expenses) at an average price of ~~$23.86~~$23.72 per share of common stock. ~~At September~~As of June 30, ~~2019,~~2020, approximately ~~$353~~$332 million was available for additional repurchases under the Share Repurchase Program.

Shares of the Company's common stock may be repurchased in open market transactions at prevailing market prices, in privately negotiated transactions, pursuant to plans complying with the Exchange Act, or by other means in accordance with federal securities laws. The actual timing, number and value of shares repurchased under the Program or otherwise will be determined at our discretion and will depend on a number of factors, including our capital allocation priorities, the market price of our stock, general market and economic conditions, applicable legal requirements and compliance with the terms of our debt agreements and the Tax Matters Agreement.

Dividends

In November 2018, Vistra ~~Energy~~ announced the Board ~~had~~ adopted a dividend program ~~pursuant to~~ which ~~Vistra Energy would initiate an annual dividend of approximately $0.50 per share expected to begin~~we initiated in the first quarter of 2019. Each dividend under the program will be subject to ~~the~~ declaration by the Board and, thus, may be subject to numerous factors in existence at the time of any such declaration including, but not limited to, prevailing market conditions, ~~Vistra Energy's~~Vistra's results of operations, financial condition and liquidity, Delaware law and ~~Delaware law.~~any contractual limitations.

In February 2019, May 2019, July 2019 and ~~July~~October 2019, the Board declared quarterly dividends of $0.125 per share that were paid in March 2019, June 2019, September 2019 and ~~September~~December 2019, respectively.

In ~~October 2019,~~February 2020 and April 2020, the Board declared quarterly dividends of $0.135 per share that were paid in March 2020 and June 2020, respectively. In July 2020, the Board declared a quarterly dividend of ~~$0.125~~$0.135 per share that will be paid in ~~December 2019. Vistra Energy did not declare or pay any dividends during the three months or nine months ended~~ September ~~30, 2018.~~2020.

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Dividend Restrictions

The Credit Facilities Agreement generally restricts the ability of Vistra Operations to make distributions to any direct or indirect parent unless such distributions are expressly permitted thereunder. As of ~~September~~June 30, ~~2019,~~2020, Vistra Operations can distribute approximately ~~$6.3~~$6.1 billion to Parent under the Credit Facilities Agreement without the consent of any party. The amount that can be distributed by Vistra Operations to Parent was partially reduced by distributions made by Vistra Operations to Parent of approximately ~~$270~~$740 million and ~~$3.465 billion~~$850 million during the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, respectively, and approximately $3.9 billion, $4.7 billion and $1.1 billion during the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, Vistra Operations may make distributions to Parent in amounts sufficient for Parent to make any payments required under the TRA or the Tax Matters Agreement or, to the extent arising out of Parent's ownership or operation of Vistra Operations, to pay any taxes or general operating or corporate overhead expenses. As of ~~September~~June 30, ~~2019,~~2020, the maximum amount of restricted net assets of Vistra Operations that may not be distributed to Parent totaled approximately ~~$2.0~~$1.5 billion.

~~Under~~In addition to the restrictions under the Credit Facilities Agreement, under applicable Delaware ~~General Corporate Law,~~law, we are ~~prohibited from paying any distribution~~only permitted to ~~the extent that such distribution exceeds the value~~make distributions either out of ~~our~~ "surplus," which is defined as the excess of our net assets above our capital (the aggregate par value of all outstanding shares of our stock)., or out of net profits for the fiscal year in which the distribution is declared or the prior fiscal year.

Warrants

At the Merger Date, the Company entered into an agreement whereby ~~holders~~the holder of each outstanding warrant previously issued by Dynegy ~~will~~would be entitled to receive, upon exercise, the equity securities to which the holder would have been entitled to receive of Dynegy common stock converted into shares of Vistra Energy common stock at the Exchange Ratio. As of September 30, 2019, 9000000 warrants expiring in 2024 withpaying an exercise price of $35.00 (subject to adjustment from time to time) ~~were outstanding, each~~, the number of ~~which can be redeemed for~~shares of Vistra common stock that such holder would have been entitled to receive if it had held one share of Dynegy common stock at the closing of the Merger, or 0.652 shares of Vistra common stock. Accordingly, upon exercise, a warrant holder would effectively pay $53.68 (subject to adjustment of the exercise price from time to time) per share of Vistra ~~Energy~~ common ~~stock.~~stock received. As of June 30, 2020, approximately 9000000 warrants expiring in 2024 were outstanding. The warrants are ~~recorded~~immaterial and reflected as equity in our condensed consolidated balance ~~sheet.~~sheets.

~~Tangible Equity Units (TEUs)~~

~~At the Merger Date, the Company assumed the obligations~~Table of Dynegy's 4,600,000 7.00% TEUs, each with a stated amount of $100.00 and each comprised of (i) a prepaid stock purchase contract that delivered to the holder, on July 1, 2019, 4.0813 shares of Vistra Energy common stock per contract with cash paid in lieu of any fractional shares at a rate of $22.5954 per share and (ii) a senior amortizing note with an outstanding principal amount of $38 million at the Merger Date that paid an equal quarterly cash installment of $1.75 per amortizing note (see Note 11). In the aggregate, the annual quarterly cash installments were equivalent to a 7.00% cash payment per year with respect to each $100.00 stated amount of TEUs. The amortizing notes were accounted for as debt while the stock purchase contract was included in equity based on the fair value of the contract at the Merger Date (see Note 11). The entire class of TEUs were suspended from trading on the New York Stock Exchange on July 1, 2019 and removed from listing and registration on July 12, 2019. On July 1, 2019, approximately 18.8 million treasury shares of Vistra Energy common stock were issued in connection with the settlement of all outstanding TEUs.Contents

Equity

The following table presents the changes to equity for the three months ended ~~September~~June 30, ~~2019:~~2020:

Common
Stock
Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Noncontrolling Interest Total Equity
Balance at June 30, 2019 $ 5
$ (1,226 ) $ 10,135
$ (989 ) $ (21 ) $ 7,904
$ —
$ 7,904
Stock repurchase —
(171 ) —
—
—
(171 ) —
(171 )
Shares issued for tangible equity unit contracts —
446
(446 ) —
—
—
—
—
Dividends declared on common stock —
—
—
(61 ) —
(61 ) —
(61 )
Effects of stock-based incentive compensation plans —
—
17
—
—
17
—
17
Net income —
—
—
113
—
113
1
114
Change in accumulated other comprehensive income (loss) (a) —
—
—
—
(13 ) (13 ) —
(13 )
Other —
—
2
1
—
3
(1 ) 2
Balance at
September 30, 2019
$ 5
$ (951 ) $ 9,708
$ (936 ) $ (34 ) $ 7,792
$ —
$ 7,792


	Common Stock (a)		Treasury Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at March 31, 2020	$	5	$	(973)	$	9,737	$	(780)	$	(53)	$	7,936	$	(10)	$	7,926


Dividends declared on common stock	—		—		—		(66)		—		(66)		—		(66)
Effects of stock-based incentive compensation plans	—		—		16		—		—		16		—		16
Net income (loss)	—		—		—		166		—		166		(2)		164

Change in accumulated other comprehensive income (loss)	—		—		—		—		1		1		—		1

Other	—		—		1		2		—		3		—		3
Balance at June 30, 2020	$	5	$	(973)	$	9,754	$	(678)	$	(52)	$	8,056	$	(12)	$	8,044

~~________________~~


~~(a)~~	~~Reflects remeasurement of our pension and OPEB plans resulting from the MISO segment plant closures (see Note 4).~~

The following table presents the changes to equity for the ~~nine~~six months ended ~~September~~June 30, ~~2019:~~2020:

Common
Stock (a)
Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Noncontrolling Interest Total Equity
Balance at
December 31, 2018
$ 5
$ (778 ) $ 10,107
$ (1,449 ) $ (22 ) $ 7,863
$ 4
$ 7,867
Stock repurchase —
(619 ) —
—
—
(619 ) —
(619 )
Shares issued for tangible equity unit contracts —
446
(446 ) —
—
—
—
—
Dividends declared on common stock —
—
—
(181 ) —
(181 ) —
(181 )
Effects of stock-based incentive compensation plans —
—
45
—
—
45
—
45
Net income —
—
—
694
—
694
(2 ) 692
Adoption of accounting standard —
—
—
(2 ) —
(2 ) —
(2 )
Change in accumulated other comprehensive income (loss) (b) —
—
—
—
(12 ) (12 ) —
(12 )
Other —
—
2
2
—
4
(2 ) 2
Balance at
September 30, 2019
$ 5
$ (951 ) $ 9,708
$ (936 ) $ (34 ) $ 7,792
$ —
$ 7,792


	Common Stock (a)		Treasury Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2019	$	5	$	(973)	$	9,721	$	(764)	$	(30)	$	7,959	$	1	$	7,960


Dividends declared on common stock	—		—		—		(132)		—		(132)		—		(132)
Effects of stock-based incentive compensation plans	—		—		30		—		—		30		—		30
Net income (loss)	—		—		—		222		—		222		(13)		209
Adoption of accounting standard	—		—		—		(4)		—		(4)		—		(4)
Change in accumulated other comprehensive income (loss)	—		—		—		—		(22)		(22)		—		(22)

Other	—		—		3		—		—		3		—		3
Balance at June 30, 2020	$	5	$	(973)	$	9,754	$	(678)	$	(52)	$	8,056	$	(12)	$	8,044

________________


~~(a)~~	~~Authorized shares totaled 1,800,000,000 at September 30, 2019. Outstanding shares totaled 487,783,432 and 493,215,309 at September 30, 2019 and December 31, 2018, respectively.~~


~~(b)~~	~~Reflects remeasurement of our pension and OPEB plans resulting from the MISO segment plant closures (see Note 4).~~

(a)Authorized shares totaled 1,800,000,000 at June 30, 2020. Outstanding common shares totaled 488,772,572 and 487,698,111 at June 30, 2020 and December 31, 2019, respectively. Treasury shares totaled 41,043,224 at both June 30, 2020 and December 31, 2019.

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The following table presents the changes to equity for the three months ended ~~September~~June 30, ~~2018:~~2019:

Common
Stock
Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Noncontrolling Interest Total Equity
Balance at June 30, 2018 $ 5
$ (75 ) $ 10,090
$ (1,591 ) $ (16 ) $ 8,413
$ 7
$ 8,420
Stock repurchase —
(349 ) —
—
—
(349 ) —
(349 )
Effects of stock-based incentive compensation plans —
—
6
—
—
6
—
6
Net income —
—
—
330
—
330
—
330
Change in accumulated other comprehensive income (loss) —
—
—
—
1
1
—
1
Investment by noncontrolling interest —
—
—
—
—
—
(1 ) (1 )
Other —
—
(2 ) —
—
(2 ) —
(2 )
Balance at
September 30, 2018
$ 5
$ (424 ) $ 10,094
$ (1,261 ) $ (15 ) $ 8,399
$ 6
$ 8,405


	Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at March 31, 2019	$	5	$	(1,014)	$	10,119	$	(1,285)	$	(21)	$	7,804	$	2	$	7,806
Stock repurchase	—		(212)		—		—		—		(212)		—		(212)

Dividends declared on common stock	—		—		—		(59)		—		(59)		—		(59)
Effects of stock-based incentive compensation plans	—		—		16		—		—		16		—		16
Net income (loss)	—		—		—		356		—		356		(2)		354



Other	—		—		—		(1)		—		(1)		—		(1)
Balance at June 30, 2019	$	5	$	(1,226)	$	10,135	$	(989)	$	(21)	$	7,904	$	—	$	7,904

The following table presents the changes to equity for the ~~nine~~six months ended ~~September~~June 30, ~~2018:~~2019:

Common
Stock (a)
Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Noncontrolling Interest Total Equity
Balance at
December 31, 2017
$ 4
$ —
$ 7,765
$ (1,410 ) $ (17 ) $ 6,342
$ —
$ 6,342
Stock and stock compensation awards issued in connection with the Merger 1
—
1,891
—
—
1,892
—
1,892
Stock repurchase —
(424 ) —
—
—
(424 ) —
(424 )
Effects of stock-based incentive compensation plans —
—
69
—
—
69
—
69
Tangible equity units acquired —
—
369
—
—
369
—
369
Warrants acquired —
—
2
—
—
2
—
2
Net loss —
—
—
132
—
132
—
132
Adoption of accounting standard —
—
—
17
—
17
—
17
Change in accumulated other comprehensive income (loss) —
—
—
—
2
2
—
2
Investment by noncontrolling interest —
—
—
—
—
—
6
6
Other —
—
(2 ) —
—
(2 ) —
(2 )
Balance at
September 30, 2018
$ 5
$ (424 ) $ 10,094
$ (1,261 ) $ (15 ) $ 8,399
$ 6
$ 8,405


	Common Stock (a)		Treasury Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2018	$	5	$	(778)	$	10,107	$	(1,449)	$	(22)	$	7,863	$	4	$	7,867
Stock repurchase	—		(448)		—		—		—		(448)		—		(448)

Dividends declared on common stock	—		—		—		(120)		—		(120)		—		(120)
Effects of stock-based incentive compensation plans	—		—		28		—		—		28		—		28
Net income	—		—		—		581		—		581		(3)		578
Adoption of accounting standard	—		—		—		(2)		—		(2)		—		(2)
Change in accumulated other comprehensive income (loss)	—		—		—		—		1		1		—		1

Other	—		—		—		1		—		1		(1)		—
Balance at June 30, 2019	$	5	$	(1,226)	$	10,135	$	(989)	$	(21)	$	7,904	$	—	$	7,904

________________


~~(a)~~	~~Authorized shares totaled 1,800,000,000 at September 30, 2018. Outstanding shares totaled 507,391,134 and 428,398,802 at September 30, 2018 and December 31, 2017, respectively.~~

(a)Authorized shares totaled 1,800,000,000 at June 30, 2019. Outstanding common shares totaled 476,166,856 and 493,215,309 at June 30, 2019 and December 31, 2018, respectively. Treasury shares totaled 51,323,829 and 32,815,783 at June 30, 2019 and December 31, 2018, respectively.

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~~15.~~	~~FAIR VALUE MEASUREMENTS~~

14. FAIR VALUE MEASUREMENTS

We utilize several different valuation techniques to measure the fair value of assets and liabilities, relying primarily on the market approach of using prices and other market information for identical and/or comparable assets and liabilities for those items that are measured on a recurring basis. We use a mid-market valuation convention (the mid-point price between bid and ask prices) as a practical expedient to measure fair value for the majority of our assets and liabilities and use valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Our valuation policies and procedures were developed, maintained and validated by a centralized risk management group that reports to the Vistra ~~Energy~~ Chief Financial Officer.

Fair value measurements of derivative assets and liabilities incorporate an adjustment for credit-related nonperformance risk. These nonperformance risk adjustments take into consideration master netting arrangements, credit enhancements and the credit risks associated with our credit standing and the credit standing of our counterparties (see Note 1615 for additional information regarding credit risk associated with our derivatives). We utilize credit ratings and default rate factors in calculating these fair value measurement adjustments.

We categorize our assets and liabilities recorded at fair value based upon the following fair value hierarchy:

•Level 1 valuations use quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. Our Level 1 assets and liabilities include CME or ICE (electronic commodity derivative exchanges) futures and options transacted through clearing brokers for which prices are actively quoted. We report the fair value of CME and ICE transactions without taking into consideration margin deposits, with the exception of certain margin amounts related to changes in fair value on certain CME transactions that, beginning in January 2017, are legally characterized as settlement of derivative contracts rather than collateral.

•Level 2 valuations utilize over-the-counter broker quotes, quoted prices for similar assets or liabilities that are corroborated by correlations or other mathematical means, and other valuation inputs such as interest rates and yield curves observable at commonly quoted intervals. We attempt to obtain multiple quotes from brokers that are active in the markets in which we participate and require at least one quote from two brokers to determine a pricing input as observable. The number of broker quotes received for certain pricing inputs varies depending on the depth of the trading market, each individual broker's publication policy, recent trading volume trends and various other factors.

•Level 3 valuations use unobservable inputs for the asset or liability. Unobservable inputs are used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. We use the most meaningful information available from the market combined with internally developed valuation methodologies to develop our best estimate of fair value. Significant unobservable inputs used to develop the valuation models include volatility curves, correlation curves, illiquid pricing delivery periods and locations and credit-related nonperformance risk assumptions. These inputs and valuation models are developed and maintained by employees trained and experienced in market operations and fair value measurements and validated by the Company's risk management group.

With respect to amounts presented in the following fair value hierarchy tables, the fair value measurement of an asset or liability (e.g., a contract) is required to fall in its entirety in one level, based on the lowest level input that is significant to the fair value measurement.

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Assets and liabilities measured at fair value on a recurring basis consisted of the following at the respective balance sheet dates shown below:


	June 30, 2020																		December 31, 2019
	Level 1		Level 2		Level 3 (a)		Reclass (b)		Total		Level 1		Level 2		Level 3 (a)		Reclass (b)		Total
Assets:
Commodity contracts	$	1,033	$	158	$	314	$	36	$	1,541	$	1,047	$	172	$	239	$	11	$	1,469
Interest rate swaps	—		86		—		—		86		—		—		—		—		—
Nuclear decommissioning trust – equity securities (c)	523		—		—				523		564		—		—				564
Nuclear decommissioning trust – debt securities (c)	—		588		—				588		—		521		—				521
Sub-total	$	1,556	$	832	$	314	$	36	2,738		$	1,611	$	693	$	239	$	11	2,554
Assets measured at net asset value (d):
Nuclear decommissioning trust – equity securities (c)									355										366
Total assets									$	3,093									$	2,920
Liabilities:
Commodity contracts	$	970	$	484	$	200	$	36	$	1,690	$	985	$	439	$	313	$	11	$	1,748
Interest rate swaps	—		455		—		—		455		—		177		—		—		177
Total liabilities	$	970	$	939	$	200	$	36	$	2,145	$	985	$	616	$	313	$	11	$	1,925

September 30, 2019
Level 1 Level 2 Level 3 (a) Reclassification (b) Total
Assets:
Commodity contracts $ 729
$ 165
$ 176
$ 110
$ 1,180
Nuclear decommissioning trust –
equity securities (c) 516
—
—
—
516
Nuclear decommissioning trust –
debt securities (c) —
518
—
—
518
Sub-total $ 1,245
$ 683
$ 176
$ 110
2,214
Assets measured at net asset value (d):
Nuclear decommissioning trust –
equity securities (c) 336
Total assets $ 2,550
Liabilities:
Commodity contracts $ 776
$ 444
$ 228
$ 110
$ 1,558
Interest rate swaps —
232
—
—
232
Total liabilities $ 776
$ 676
$ 228
$ 110
$ 1,790
___________

(a)See table below for description of Level 3 assets and liabilities.

(b)Fair values are determined on a contract basis, but certain contracts result in a current asset and a noncurrent liability, or vice versa, as presented in our condensed consolidated balance sheets.

(c)The nuclear decommissioning trust investment is included in the investments line in our condensed consolidated balance sheets. See Note 18.

(d)The fair value amounts presented in this line are intended to permit reconciliation of the fair value hierarchy to the amounts presented in our condensed consolidated balance sheets. Certain investments measured at fair value using the net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

December 31, 2018
Level 1 Level 2 Level 3 (a) Reclassification (b) Total
Assets:
Commodity contracts $ 456
$ 152
$ 153
$ 1
$ 762
Interest rate swaps —
77
—
—
77
Nuclear decommissioning trust –
equity securities (c) 449
—
—
—
449
Nuclear decommissioning trust –
debt securities (c) —
443
—
—
443
Sub-total $ 905
$ 672
$ 153
$ 1
1,731
Assets measured at net asset value (d):
Nuclear decommissioning trust –
equity securities (c) 278
Total assets $ 2,009
Liabilities:
Commodity contracts $ 557
$ 766
$ 288
$ 1
$ 1,612
Interest rate swaps —
34
—
—
34
Total liabilities $ 557
$ 800
$ 288
$ 1
$ 1,646

~~____________~~


~~(a)~~	~~See table below for description of Level 3 assets and liabilities.~~


~~(b)~~	~~Fair values are determined on a contract basis, but certain contracts result in a current asset and a noncurrent liability, or vice versa, as presented in our condensed consolidated balance sheets.~~


~~(c)~~	~~The nuclear decommissioning trust investment is included in the investments line in our condensed consolidated balance sheets. See Note 19.~~


~~(d)~~	The fair value amounts presented in this line are intended to permit reconciliation of the fair value hierarchy to the amounts presented in our condensed consolidated balance sheets. Certain investments measured at fair value using the net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

Commodity contracts consist primarily of natural gas, electricity, coal and emissions agreements and include financial instruments entered into for economic hedging purposes as well as physical contracts that have not been designated as normal purchases or sales. Interest rate swaps are used to reduce exposure to interest rate changes by converting floating-rate interest to fixed rates. See Note 1615 for further discussion regarding derivative instruments.

Nuclear decommissioning trust assets represent securities held for the purpose of funding the future retirement and decommissioning of our nuclear generation facility. These investments include equity, debt and other fixed-income securities consistent with investment rules established by the NRC and the PUCT.

Table of Contents

The following tables present the fair value of the Level 3 assets and liabilities by major contract type and the significant unobservable inputs used in the valuations at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:


June 30, 2020
	Fair Value
Contract Type (a)	Assets		Liabilities		Total		Valuation Technique	Significant Unobservable Input	Range (b)								Average (b)
Electricity purchases and sales	$	149	$	(32)	$	117	Valuation Model	Hourly price curve shape (c)	$	—		to	$105			$53
															MWh
								Illiquid delivery periods for ERCOT hub power prices and heat rates (d)	$	20		to	$120			$73
												MWh
Options	74		(121)		(47)		Option Pricing Model	Gas to power correlation (e)	25		%	to	100%			63%
									Power and gas volatility (e)				5	%	to	675%	341%
Financial transmission rights	76		(13)		63		Market Approach (f)	Illiquid price differences between settlement points (g)	$	(5)		to	$50			$22
															MWh





Other (h)	15		(34)		(19)
Total	$	314	$	(200)	$	114

September 30, 2019
Fair Value
Contract Type (a) Assets Liabilities Total Valuation Technique Significant Unobservable Input Range (b)
Electricity purchases and sales $ 55
$ (52 ) $ 3
Valuation Model Hourly price curve shape (c) $ —
to $110
MWh
Illiquid delivery periods for hub power prices and heat rates (d) $ 20
to $120
MWh
Electricity and weather options 2
(128 ) (126 ) Option Pricing Model Gas to power correlation (e) 10 % to 100%
Power volatility (e) 5 % to 440%
Financial transmission rights 102
(17 ) 85
Market Approach (f) Illiquid price differences between settlement points (g) $ (5 ) to $10
MWh
Other (h) 17
(31 ) (14 )
Total $ 176
$ (228 ) $ (52 )


December 31, 2018
December 31, 2019																		December 31, 2019
	Fair Value																				Fair Value
Contract Type (a)	Assets		Liabilities			Total			Valuation Technique		Significant Unobservable Input		Range (b)					Contract Type (a)			Assets			Liabilities			Total			Valuation Technique		Significant Unobservable Input			Range (b)												Average (b)
Electricity purchases and sales	$	22	$	(48	)	$	(26	)	Valuation Model		Hourly price curve shape (c)		$	—		to	td10	Electricity purchases and sales			$	64		$	(53)		$	11		Valuation Model		Hourly price curve shape (c)			$	—		to			td15			$58
												MWh																													MWh
											Illiquid delivery periods for ERCOT hub power prices and heat rates (d)		$	20		to	td20																Illiquid delivery periods for ERCOT hub power prices and heat rates (d)				$	20		to		td20			$70
												MWh																									MWh
Electricity and weather options	31		(192		)	(161		)		Option Pricing Model			Gas to power correlation (e)		15		%	to	95%
											Power volatility (e)		5		%	to	435%
Options																		Options			38			(188)			(150)			Option Pricing Model		Gas to power correlation (e)			10		%	to			100%			55%
																																		Power and gas volatility (e)				5		%	to		440%			223%
Financial transmission rights	85		(20		)	65			Market Approach (f)		Illiquid price differences between settlement points (g)		$	(10	)	to	$50	Financial transmission rights			120			(26)			94				Market Approach (f)			Illiquid price differences between settlement points (g)				$	(10)		to		$40			td5
												MWh																													MWh

Other (h)	15		(28		)	(13		)												Other (h)			17			(46)			(29)
Total	$	153	$	(288	)	$	(135	)										Total			$	239		$	(313)		$	(74)

~~— See Note 13 to Financial Statements for a discussion~~Table of ~~greenhouse gas emissions, regional haze, state implementation plan and other recent EPA actions as well as related litigation.~~Contents

RESULTS OF OPERATIONS

Consolidated Financial Results — Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 Compared to Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019


	Three Months Ended June 30,						Favorable (Unfavorable) $ Change			Six Months Ended June 30,					Favorable (Unfavorable) $ Change
	2020		2019						2020			2019
Operating revenues	$	2,509	$	2,832	$	(323)	$	5,367		$	5,755		$	(388)
Fuel, purchased power costs and delivery fees	(1,029)		(1,139)		110		(2,362)			(2,600)			238
Operating costs	(412)		(370)		(42)		(792)			(755)			(37)
Depreciation and amortization	(455)		(384)		(71)		(875)			(790)			(85)
Selling, general and administrative expenses	(236)		(210)		(26)		(488)			(392)			(96)

Impairment of long-lived assets	—		—		—		(84)			—			(84)
Operating income	377		729		(352)		766			1,218			(452)
Other income	5		13		(8)		12			39			(27)
Other deductions	(4)		(2)		(2)		(35)			(5)			(30)
Interest expense and related charges	(141)		(274)		133		(440)			(495)			55
Impacts of Tax Receivable Agreement	(6)		33		(39)		(14)			36			(50)
Equity in earnings of unconsolidated investment	1		3		(2)		4			10			(6)
Income before income taxes	232		502		(270)		293			803			(510)
Income tax expense	(68)		(148)		80		(84)			(225)			141
Net income	$	164	$	354	$	(190)	$	209		$	578		$	(369)


	Three Months Ended June 30, 2020
	Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Operating revenues	$	1,956	$	865	$	412	$	131	$	121	$	—	$	(976)	$	2,509
Fuel, purchased power costs and delivery fees	(1,468)		(223)		(204)		(58)		(85)		—		1,009		(1,029)
Operating costs	(28)		(196)		(94)		(31)		(45)		(9)		(9)		(412)
Depreciation and amortization	(82)		(130)		(165)		(48)		(9)		—		(21)		(455)
Selling, general and administrative expenses	(146)		(20)		(15)		(12)		(14)		(5)		(24)		(236)


Operating income (loss)	232		296		(66)		(18)		(32)		(14)		(21)		377
Other income	—		3		1		—		1		—		—		5
Other deductions	—		(2)		(1)		—		—		—		(1)		(4)
Interest expense and related charges	(3)		2		(1)		—		(1)		—		(138)		(141)
Impacts of Tax Receivable Agreement	—		—		—		—		—		—		(6)		(6)
Equity in earnings of unconsolidated investment	—		—		1		—		—		—		—		1
Income (loss) before income taxes	229		299		(66)		(18)		(32)		(14)		(166)		232
Income tax expense	—		—		—		—		—		—		(68)		(68)
Net income (loss)	$	229	$	299	$	(66)	$	(18)	$	(32)	$	(14)	$	(234)	$	164

Table of Contents

Three Months Ended September 30,
Favorable (Unfavorable)
$ Change

Nine Months Ended
September 30,

Favorable (Unfavorable)
$ Change
2019 2018 2019 2018
Operating revenues $ 3,194
$ 3,243
$ (49 ) $ 8,949
$ 6,581
$ 2,368
Fuel, purchased power costs and delivery fees (1,687 ) (1,627 ) (60 ) (4,287 ) (3,492 ) (795 )
Operating costs (397 ) (346 ) (51 ) (1,153 ) (926 ) (227 )
Depreciation and amortization (424 ) (426 ) 2
(1,213 ) (967 ) (246 )
Selling, general and administrative expenses (246 ) (194 ) (52 ) (637 ) (711 ) 74
Operating income 440
650
(210 ) 1,659
485
1,174
Other income 6
6
—
45
25
20
Other deductions (4 ) (1 ) (3 ) (9 ) (4 ) (5 )
Interest expense and related charges (224 ) (154 ) (70 ) (720 ) (291 ) (429 )
Impacts of Tax Receivable Agreement (62 ) 17
(79 ) (26 ) (65 ) 39
Equity in earnings of unconsolidated investment 3
7
(4 ) 13
11
2
Income before income taxes 159
525
(366 ) 962
161
801
Income tax expense (45 ) (194 ) 149
(270 ) (31 ) (239 )
Net income $ 114
$ 331
$ (217 ) $ 692
$ 130
$ 562

Three Months Ended September 30, 2019
Retail ERCOT PJM NY/NE MISO
Asset
Closure
Eliminations / Corporate and Other
Vistra
Energy Consolidated
Operating revenues $ 2,207
$ 731
$ 443
$ 214
$ 197
$ —
$ (598 ) $ 3,194
Fuel, purchased power costs and delivery fees (1,358 ) (429 ) (281 ) (108 ) (164 ) —
653
(1,687 )
Operating costs (22 ) (166 ) (74 ) (24 ) (101 ) (4 ) (6 ) (397 )
Depreciation and amortization (86 ) (126 ) (135 ) (51 ) (5 ) —
(21 ) (424 )
Selling, general and administrative expenses (160 ) (21 ) (14 ) (11 ) (12 ) (5 ) (23 ) (246 )
Operating income (loss) 581
(11 ) (61 ) 20
(85 ) (9 ) 5
440
Other income —
1
—
—
1
1
3
6
Other deductions —
(2 ) —
—
(2 ) —
—
(4 )
Interest expense and related charges (8 ) 2
(2 ) (1 ) (2 ) —
(213 ) (224 )
Impacts of Tax Receivable Agreement —
—
—
—
—
—
(62 ) (62 )
Equity in earnings of unconsolidated investment —
—
1
2
—
—
—
3
Income (loss) before income taxes 573
(10 ) (62 ) 21
(88 ) (8 ) (267 ) 159
Income tax expense —
—
—
—
—
—
(45 ) (45 )
Net income (loss) $ 573
$ (10 ) $ (62 ) $ 21
$ (88 ) $ (8 ) $ (312 ) $ 114


	Three Months Ended June 30, 2019
	Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Operating revenues	$	1,421	$	1,671	$	686	$	254	$	188	$	58	$	(1,446)	$	2,832
Fuel, purchased power costs and delivery fees	(1,828)		(299)		(265)		(100)		(78)		(42)		1,473		(1,139)
Operating costs	(11)		(174)		(86)		(25)		(34)		(32)		(8)		(370)
Depreciation and amortization	(59)		(128)		(134)		(39)		(3)		—		(21)		(384)
Selling, general and administrative expenses	(104)		(23)		(16)		(12)		(27)		(11)		(17)		(210)


Operating income (loss)	(581)		1,047		185		78		46		(27)		(19)		729
Other income	—		8		—		—		2		1		2		13
Other deductions	—		(2)		—		—		—		—		—		(2)
Interest expense and related charges	(4)		3		(3)		(1)		(2)		—		(267)		(274)
Impacts of Tax Receivable Agreement	—		—		—		—		—		—		33		33
Equity in earnings of unconsolidated investment	—		—		1		2		—		—		—		3
Income (loss) before income taxes	(585)		1,056		183		79		46		(26)		(251)		502
Income tax expense	—		—		—		—		—		—		(148)		(148)
Net income (loss)	$	(585)	$	1,056	$	183	$	79	$	46	$	(26)	$	(399)	$	354

Three Months Ended September 30, 2018
Retail ERCOT PJM NY/NE MISO
Asset
Closure
Eliminations / Corporate and Other
Vistra
Energy Consolidated
Operating revenues $ 1,813
$ 1,396
$ 620
$ 301
$ 230
$ (1 ) $ (1,116 ) $ 3,243
Fuel, purchased power costs and delivery fees (1,689 ) (458 ) (321 ) (167 ) (150 ) —
1,158
(1,627 )
Operating costs (16 ) (155 ) (83 ) (23 ) (61 ) (3 ) (5 ) (346 )
Depreciation and amortization (80 ) (122 ) (141 ) (55 ) (3 ) —
(25 ) (426 )
Selling, general and administrative expenses (111 ) (18 ) (14 ) (11 ) (18 ) —
(22 ) (194 )
Operating income (loss) (83 ) 643
61
45
(2 ) (4 ) (10 ) 650
Other income —
—
1
—
—
—
5
6
Other deductions —
(2 ) —
—
—
—
1
(1 )
Interest expense and related charges (3 ) 2
(3 ) (1 ) (1 ) —
(148 ) (154 )
Impacts of Tax Receivable Agreement —
—
—
—
—
—
17
17
Equity in earnings of unconsolidated investment —
—
3
3
—
—
1
7
Income (loss) before income taxes (86 ) 643
62
47
(3 ) (4 ) (134 ) 525
Income tax expense —
—
—
—
—
—
(194 ) (194 )
Net income (loss) $ (86 ) $ 643
$ 62
$ 47
$ (3 ) $ (4 ) $ (328 ) $ 331

~~In the third quarter~~Our operating segments delivered strong operating performance with a disciplined focus on cost management, while generating and selling essential electricity in a safe and reliable manner during a period of 2019, we continued with our balanced capital allocation program, refinancing approximately $400 million of debt, which lowered interest rates and extended maturities, and returning approximately $171 million to stockholders through share repurchases. We produced results during the quarter in line with expectations, reflectingsignificant economic disruption. Our performance reflected the stability of our integrated model, ~~with the~~including a diversified generation fleet, ~~operating safely~~retail and ~~reliably over~~commercial and hedging activities in support of our integrated business, to produce results in line with expectations and significant cash from operations despite general uncertainty in the ~~volatile ERCOT summer while our Retail segment delivered stable pricing and growth in ERCOT residential customer counts.~~ overall economy.

Consolidated results decreased ~~$217~~$190 million to net income of ~~$114~~$164 million in the three months ended ~~September~~June 30, ~~2019~~2020 compared to the three months ended ~~September~~June 30, ~~2018.~~2019. The change in results ~~reflects higher power costs~~is driven by a $519 million decrease in ~~our Retail segment, lower revenue~~unrealized net ~~of fuel in our PJM, NY/NE and MISO segments, an increase in unrealized~~(gains) losses on hedging ~~transactions~~transactions.

For the three months ended June 30, 2020 and ~~interest rate swaps,~~2019, operating costs increased $42 million to $412 million primarily driven by increased LTSA costs and ~~one-time costs associated with~~incremental expense related to our COVID-19 response.

For the ~~MISO segment plant closures~~three months ended June 30, 2020 and 2019, selling, general and administrative expense increased by $26 million, primarily due to the increased expense resulting from the acquisition of Crius ~~Transaction; partially offset by higher revenue net of fuel~~ in ~~our ERCOT segment~~July 2019 and ~~a decrease~~Ambit in ~~income tax expense.~~November 2019.

Interest expense and related charges ~~increased $70~~decreased $133 million to ~~$224~~$141 million in the three months ended ~~September~~June 30, ~~2019~~2020 compared to the three months ended ~~September~~June 30, ~~2018 and reflected~~2019 driven by a ~~$114~~$101 million ~~increase~~decrease in unrealized mark-to-market losses on interest rate swaps ~~partially offset by~~and a ~~$24~~$33 million decrease in interest paid/accrued reflecting ~~repayments~~the reduction in higher interest Vistra senior unsecured notes through the Redemptions and ~~repurchases of long-term debt. Debt extinguishment gains totaled $2 million~~Tender Offers in 2019 ~~compared to debt extinguishment losses of $27 million in 2018.~~and 2020. See Note 1918 to the Financial Statements.

For the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Impacts of the Tax Receivable Agreement totaled expense of ~~$62~~$6 million and income of ~~$17~~$33 million, respectively. See Note 8 to the Financial Statements for discussion of the impacts of the Tax Receivable Agreement Obligation.

For the three months ended ~~September~~June 30, ~~2019,~~2020, income tax expense totaled ~~$45~~$68 million and the effective tax rate was ~~28.3%~~29.3%. For the three months ended ~~September~~June 30, ~~2018,~~2019, income tax expense totaled ~~$194~~$148 million and the effective tax rate was ~~37.0%~~29.5%. See Note 7 to the Financial Statements for reconciliation of the effective rates to the U.S. federal statutory rate.

~~Consolidated cash flow from operations produced $941 million in the three months ended September 30, 2019 compared to $892 million produced in the three months ended September 30, 2018.~~

Table of Contents

Nine Months Ended September 30, 2019
Retail ERCOT PJM NY/NE MISO
Asset
Closure
Eliminations / Corporate and Other
Vistra
Energy Consolidated
Operating revenues $ 5,014
$ 3,356
$ 1,833
$ 813
$ 697
$ —
$ (2,764 ) $ 8,949
Fuel, purchased power costs and delivery fees (4,383 ) (1,062 ) (862 ) (436 ) (436 ) —
2,892
(4,287 )
Operating costs (44 ) (525 ) (244 ) (74 ) (219 ) (25 ) (22 ) (1,153 )
Depreciation and amortization (204 ) (385 ) (399 ) (155 ) (11 ) —
(59 ) (1,213 )
Selling, general and administrative expenses (364 ) (60 ) (41 ) (33 ) (71 ) (14 ) (54 ) (637 )
Operating income (loss) 19
1,324
287
115
(40 ) (39 ) (7 ) 1,659
Other income —
21
—
—
5
2
17
45
Other deductions —
(6 ) —
—
(2 ) —
(1 ) (9 )
Interest expense and related charges (16 ) 7
(8 ) (2 ) (5 ) —
(696 ) (720 )
Impacts of Tax Receivable Agreement —
—
—
—
—
—
(26 ) (26 )
Equity in earnings of unconsolidated investment —
—
4
9
—
—
—
13
Income (loss) before income taxes 3
1,346
283
122
(42 ) (37 ) (713 ) 962
Income tax expense —
—
—
—
—
—
(270 ) (270 )
Net income (loss) $ 3
$ 1,346
$ 283
$ 122
$ (42 ) $ (37 ) $ (983 ) $ 692


	Six Months Ended June 30, 2020
	Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Operating revenues	$	3,864	$	1,731	$	1,060	$	417	$	263	$	—	$	(1,968)	$	5,367
Fuel, purchased power costs and delivery fees	(3,014)		(494)		(481)		(231)		(159)		—		2,017		(2,362)
Operating costs	(58)		(393)		(167)		(54)		(88)		(18)		(14)		(792)
Depreciation and amortization	(162)		(253)		(303)		(97)		(20)		—		(40)		(875)
Selling, general and administrative expenses	(301)		(39)		(41)		(25)		(26)		(12)		(44)		(488)

Impairment of long-lived assets	—		—		—		—		(84)		—		—		(84)
Operating income (loss)	329		552		68		10		(114)		(30)		(49)		766
Other income	—		4		—		1		4		1		2		12
Other deductions	—		(3)		(14)		(15)		—		(2)		(1)		(35)
Interest expense and related charges	(6)		4		(3)		(1)		(1)		—		(433)		(440)
Impacts of Tax Receivable Agreement	—		—		—		—		—		—		(14)		(14)
Equity in earnings of unconsolidated investment	—		—		2		2		—		—		—		4
Income (loss) before income taxes	323		557		53		(3)		(111)		(31)		(495)		293
Income tax expense	—		—		—		—		—		—		(84)		(84)
Net income (loss)	$	323	$	557	$	53	$	(3)	$	(111)	$	(31)	$	(579)	$	209


	Six Months Ended June 30, 2019
	Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Operating revenues	$	2,806	$	2,625	$	1,391	$	599	$	357	$	143	$	(2,166)	$	5,755
Fuel, purchased power costs and delivery fees	(3,024)		(633)		(581)		(329)		(171)		(101)		2,239		(2,600)
Operating costs	(22)		(359)		(169)		(50)		(68)		(71)		(16)		(755)
Depreciation and amortization	(118)		(259)		(265)		(104)		(7)		—		(37)		(790)
Selling, general and administrative expenses	(205)		(39)		(28)		(22)		(44)		(22)		(32)		(392)


Operating income (loss)	(563)		1,335		348		94		67		(51)		(12)		1,218
Other income	—		20		—		—		3		1		15		39
Other deductions	—		(4)		—		—		—		—		(1)		(5)
Interest expense and related charges	(8)		5		(5)		(1)		(3)		—		(483)		(495)
Impacts of Tax Receivable Agreement	—		—		—		—		—		—		36		36
Equity in earnings of unconsolidated investment	—		—		3		7		—		—		—		10
Income (loss) before income taxes	(571)		1,356		346		100		67		(50)		(445)		803
Income tax benefit	—		—		—		—		—		—		(225)		(225)
Net income (loss)	$	(571)	$	1,356	$	346	$	100	$	67	$	(50)	$	(670)	$	578

Table of Contents

Nine Months Ended September 30, 2018
Retail ERCOT PJM NY/NE MISO
Asset
Closure
Eliminations / Corporate and Other
Vistra
Energy Consolidated
Operating revenues $ 4,239
$ 2,190
$ 1,104
$ 487
$ 488
$ 48
$ (1,975 ) $ 6,581
Fuel, purchased power costs and delivery fees (3,290 ) (1,085 ) (560 ) (276 ) (283 ) (37 ) 2,039
(3,492 )
Operating costs (29 ) (503 ) (165 ) (48 ) (136 ) (33 ) (12 ) (926 )
Depreciation and amortization (237 ) (295 ) (266 ) (104 ) (6 ) —
(59 ) (967 )
Selling, general and administrative expenses (312 ) (73 ) (28 ) (23 ) (33 ) (4 ) (238 ) (711 )
Operating income (loss) 371
234
85
36
30
(26 ) (245 ) 485
Other income 29
20
1
—
—
2
(27 ) 25
Other deductions —
(5 ) —
—
—
—
1
(4 )
Interest expense and related charges (3 ) (13 ) (5 ) (1 ) (1 ) —
(268 ) (291 )
Impacts of Tax Receivable Agreement —
—
—
—
—
—
(65 ) (65 )
Equity in earnings of unconsolidated investment —
—
5
6
—
—

11
Income (loss) before income taxes 397
236
86
41
29
(24 ) (604 ) 161
Income tax benefit —
—
—
—
—
—
(31 ) (31 )
Net income (loss) $ 397
$ 236
$ 86
$ 41
$ 29
$ (24 ) $ (635 ) $ 130

~~In the nine months ended September 30, 2019, we refinanced approximately $4.5 billion of debt and returned approximately $619 million to stockholders through share repurchases.~~ Our operating segments delivered strong operating performance with a disciplined focus on cost management, while generating and selling essential electricity in a safe and reliable ~~manner.~~ manner during a period of significant economic disruption. Our performance reflected the stability of our integrated model, including a diversified generation fleet, retail and commercial and hedging activities in support of our integrated business, to produce results in line with expectations and significant cash from operations of $1.309 billion for the six months ended June 30, 2020 despite general uncertainty in the overall economy.

Consolidated results ~~increased $562~~decreased $369 million to net income of ~~$692~~$209 million in the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The change in results ~~reflects an increase~~is driven by a $580 million decrease in unrealized gains on hedging transactions, an $84 million impairment of assets related to our Joppa/EEI coal plant and a ~~full year~~$29 million loss on disposal of ~~operations acquired~~our equity method investment in Northeast Energy, LP (NELP). See Note 18 to the ~~Merger, partially offset~~Financial Statements.

For the six months ended June 30, 2020 and 2019, operating costs increased $37 million to $792 million primarily driven by ~~an increase~~increased LTSA costs and incremental expense related to our COVID-19 response.

For the six months ended June 30, 2020 and 2019, selling, general and administrative expense increased by $96 million, primarily due to the increased expense resulting from the acquisition of Crius in ~~interest~~July 2019 and ~~income tax expenses.~~Ambit in November 2019 and a nonrecurring charge of approximately $10 million related to gross receipts taxes.

Interest expense and related charges ~~increased $429~~decreased $55 million to ~~$720~~$440 million in the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2018 and~~2019 driven by a ~~$398~~$56 million ~~increase~~decrease in interest paid/accrued reflecting the reduction in higher interest Vistra senior unsecured notes through the Redemptions and Tender Offers in 2019 and 2020 and a $7 million decrease in unrealized mark-to-market losses on interest rate swaps and a $65 million increase in interest paid/accrued reflecting long-term debt assumed in the Merger. Debt extinguishment gains totaled $12 million in 2019 compared to debt extinguishment losses of $27 million in 2018.swaps. See Note 1918 to the Financial Statements.

For the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, the Impacts of the Tax Receivable Agreement totaled expense of ~~$26~~$14 million and ~~$65~~income of $36 million, respectively. See Note 8 to the Financial Statements for discussion of the impacts of the Tax Receivable Agreement Obligation.

For the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, income tax expense totaled ~~$270~~$84 million and the effective tax rate was ~~28.1%~~28.7%. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, income tax expense totaled ~~$31~~$225 million and the effective tax rate was ~~19.3%~~28.0%. See Note 7 to the Financial Statements for reconciliation of the effective rates to the U.S. federal statutory rate.

Discussion of Adjusted EBITDA

Non-GAAP Measures — In analyzing and planning for our business, we supplement our use of GAAP financial measures with non-GAAP financial measures, including EBITDA and Adjusted EBITDA as performance measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures included in the tables below, may provide a more complete understanding of factors and trends affecting our business. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures and are, by definition, an incomplete understanding of Vistra ~~Energy~~ and must be considered in conjunction with GAAP measures. In addition, non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

EBITDA and Adjusted EBITDA — We believe EBITDA and Adjusted EBITDA provide meaningful representations of our operating performance. We consider EBITDA as another way to measure financial performance on an ongoing basis. Adjusted EBITDA is meant to reflect the operating performance of our segments for the period presented. We define EBITDA as earnings (loss) before interest expense, income tax expense (benefit) and depreciation and amortization expense. We define Adjusted EBITDA as EBITDA adjusted to exclude (i) gains or losses on the sale or retirement of certain assets, (ii) the impacts of mark-to-market changes on derivatives, ~~related to our portfolio,~~ (iii) the impact of impairment charges, (iv) certain amounts associated with fresh-start reporting, acquisitions, dispositions, transition costs or restructurings, (v) non-cash compensation expense, (vi) impacts from the Tax Receivable Agreement and (vii) other material nonrecurring or unusual items.

Because EBITDA and Adjusted EBITDA are financial measures that management uses to allocate resources, determine our ability to fund capital expenditures, assess performance against our peers, and evaluate overall financial performance, we believe they provide useful information for investors.

Table of Contents

When EBITDA or Adjusted EBITDA is discussed in reference to performance on a consolidated basis, the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA is Net income (loss).

Adjusted EBITDA — Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 Compared to Three and Six Months Ended June 30, 2019


	Three Months Ended June 30,						Favorable (Unfavorable) $ Change			Six Months Ended June 30,					Favorable (Unfavorable) $ Change
	2020		2019						2020			2019
Net income	$	164	$	354	$	(190)	$	209		$	578		$	(369)
Income tax expense	68		148		(80)		84			225			(141)
Interest expense and related charges (a)	141		274		(133)		440			495			(55)
Depreciation and amortization (b)	472		399		73		912			824			88
EBITDA before Adjustments	845		1,175		(330)		1,645			2,122			(477)
Unrealized net (gain) loss resulting from hedging transactions	2		(517)		519		(123)			(703)			580

Fresh start/purchase accounting impacts	30		20		10		34			33			1
Impacts of Tax Receivable Agreement	6		(33)		39		14			(36)			50

Non-cash compensation expenses	17		11		6		30			24			6
Transition and merger expenses	—		27		(27)		19			44			(25)
Impairment of long-lived assets	—		—		—		84			—			84
Loss on disposal of investment in NELP	1		—		1		29			—			29
COVID-19-related expenses (c)	12		—		12		14			—			14
Other, net	3		9		(6)		3			10			(7)
Adjusted EBITDA	$	916	$	692	$	224	$	1,749		$	1,494		$	255

____________

(a)~~Nine Months~~Includes unrealized mark-to-market net losses on interest rate swaps of $18 million and $119 million for the three months ended June 30, 2020 and 2019, respectively, and $192 million and $199 million for the six months ended June 30, 2020 and 2019, respectively.

(b) ~~Ended September~~Includes nuclear fuel amortization in the ERCOT segment of $17 million and $15 million for the three months ended June 30, ~~2018~~2020 and 2019, respectively, and $37 million and $34 million for the six months ended June 30, 2020 and 2019, respectively.

(c)Includes material and supplies and other incremental costs related to our COVID-19 response.

Table of Contents

Three Months Ended September 30,
Favorable (Unfavorable)
$ Change

Nine Months Ended
September 30,

Favorable (Unfavorable)
$ Change
2019 2018 2019 2018
Net income $ 114
$ 331
$ (217 ) $ 692
$ 130
$ 562
Income tax expense 45
194
(149 ) 270
31
239
Interest expense and related charges (a) 224
154
70
720
291
429
Depreciation and amortization (b) 444
446
(2 ) 1,266
1,027
239
EBITDA before Adjustments 827
1,125
(298 ) 2,948
1,479
1,469
Unrealized net (gain) loss resulting from hedging transactions 79
8
71
(625 ) 207
(832 )
Generation plant retirement expenses 49
—
49
49
—
49
Fresh start/purchase accounting impacts (8 ) (8 ) —
26
26
—
Impacts of Tax Receivable Agreement 62
(17 ) 79
26
65
(39 )
Reorganization items and restructuring expenses —
—
—
—
62
(62 )
Non-cash compensation expenses 12
14
(2 ) 36
—
36
Transition and merger expenses 38
19
19
82
205
(123 )
Other, net 1
—
1
12
(4 ) 16
Adjusted EBITDA $ 1,060
$ 1,141
$ (81 ) $ 2,554
$ 2,040
$ 514


	Three Months Ended June 30, 2020
	Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Net income (loss)	$	229	$	299	$	(66)	$	(18)	$	(32)	$	(14)	$	(234)	$	164
Income tax expense	—		—		—		—		—		—		68		68
Interest expense and related charges (a)	3		(2)		1		—		1		—		138		141
Depreciation and amortization (b)	82		147		165		48		9		—		21		472
EBITDA before Adjustments	314		444		100		30		(22)		(14)		(7)		845
Unrealized net (gain) loss resulting from hedging transactions	81		(190)		67		33		14		—		(3)		2

Fresh start/purchase accounting impacts	5		(2)		12		7		8		—		—		30
Impacts of Tax Receivable Agreement	—		—		—		—		—		—		6		6

Non-cash compensation expenses	—		—		—		—		—		—		17		17
Transition and merger expenses	1		(4)		—		—		—		—		3		—
Loss on disposal of investment in NELP	—		—		1		—		—		—		—		1
COVID-19-related expenses (c)	—		9		2		—		1		—		—		12
Other, net	—		3		1		2		2		1		(6)		3
Adjusted EBITDA	$	401	$	260	$	183	$	72	$	3	$	(13)	$	10	$	916

____________


~~(a)~~	Includes unrealized mark-to-market net gains/losses on interest rate swaps of $76 million net losses and $38 million net gains for the three months ended September 30, 2019 and 2018, respectively, and $275 million net losses and $123 million net gains for the nine months ended September 30, 2019 and 2018, respectively.


~~(b)~~	Includes nuclear fuel amortization in the ERCOT segment of $20 million and $20 million for the three months ended September 30, 2019 and 2018, respectively, and $53 million and $60 million for the nine months ended September 30, 2019 and 2018, respectively.

(a)Includes $18 million of unrealized mark-to-market net losses on interest rate swaps.

(b)Includes nuclear fuel amortization of $17 million in ERCOT segment.

(c)Includes material and supplies and other incremental costs related to our COVID-19 response.

Three Months Ended September 30, 2019
Retail ERCOT PJM NY/NE MISO
Asset
Closure
Eliminations / Corporate and Other
Vistra
Energy Consolidated
Net income (loss) $ 573

$ (10 )
$ (62 )
$ 21

$ (88 ) $ (8 ) $ (312 ) $ 114
Income tax expense —

—

—

—

—
—
45
45
Interest expense and related charges (a) 8

(2 )
2

1

2
—
213
224
Depreciation and amortization (b) 86

146

135

51

5
—
21
444
EBITDA before Adjustments 667

134

75

73

(81 ) (8 ) (33 ) 827
Unrealized net (gain) loss resulting from hedging transactions (769 )
682

139

5

43
—
(21 ) 79
Generation plant retirement expenses —

—

—

—

47
2
—
49
Fresh start/purchase accounting impacts (12 )
—

3

—

2
—
(1 ) (8 )
Impacts of Tax Receivable Agreement —

—

—

—

—
—
62
62
Non-cash compensation expenses —

—

—

—

—
—
12
12
Transition and merger expenses 24

5

1

1

1
1
5
38
Other, net 3

2

4

2

(1 ) 1
(10 ) 1
Adjusted EBITDA $ (87 )
$ 823

$ 222

$ 81

$ 11
$ (4 ) $ 14
$ 1,060

~~___________~~


~~(a)~~	~~Includes $76 million of unrealized mark-to-market net losses on interest rate swaps.~~


~~(b)~~	~~Includes nuclear fuel amortization of $20 million in ERCOT segment.~~


	Three Months Ended September 30, 2018																								Three Months Ended June 30, 2019
	Retail			ERCOT			PJM			NY/NE		MISO			Asset Closure			Eliminations / Corporate and Other			Vistra Energy Consolidated				Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		Eliminations / Corporate and Other		Vistra Consolidated
Net income (loss)	$	(86	)	$	643		$	62		$	47	$	(3	)	$	(4	)	$	(328	)	$	331		Net income (loss)	$	(585)	$	1,056	$	183	$	79	$	46	$	(26)	$	(399)	$	354
Income tax expense	—			—											—			194			194			Income tax expense	—		—								—		148		148
Interest expense and related charges (a)	3			(2		)	3			1		1			—			148			154			Interest expense and related charges (a)	4		(3)		3		1		2		—		267		274
Depreciation and amortization (b)	80			142			141			55		3			—			25			446			Depreciation and amortization (b)	59		143		134		39		3		—		21		399
EBITDA before Adjustments	(3		)	783			206			103		1			(4		)	39			1,125			EBITDA before Adjustments	(522)		1,196		320		119		51		(26)		37		1,175
Unrealized net (gain) loss resulting from hedging transactions	154			(195		)	21			—		32			—			(4		)	8			Unrealized net (gain) loss resulting from hedging transactions	797		(1,047)		(163)		(32)		(65)		—		(7)		(517)
Fresh start accounting impacts	(15		)	—			(1		)	5		3			—			—			(8		)

Fresh start/purchase accounting impacts																								Fresh start/purchase accounting impacts	15		(1)		2		1		3		1		(1)		20
Impacts of Tax Receivable Agreement	—			—			—			—		—			—			(17		)	(17		)	Impacts of Tax Receivable Agreement	—		—		—		—		—		—		(33)		(33)

Non-cash compensation expenses	—			—			—			—		—			—			14			14			Non-cash compensation expenses	—		—		—		—		—		—		11		11
Transition and merger expenses	—			3			5			1		1			—			9			19			Transition and merger expenses	—		5		1		1		17		—		3		27
Other, net	5			6			9			2		2			(8		)	(16		)	—			Other, net	3		3		7		2		5		—		(11)		9
Adjusted EBITDA	$	141		$	597		$	240		$	111	$	39		$	(12	)	$	25		$	1,141		Adjusted EBITDA	$	293	$	156	$	167	$	91	$	11	$	(25)	$	(1)	$	692

Nine Months Ended September 30,
ERCOT PJM NY/NE MISO
2019 2018 2019 2018 2019 2018 2019 2018
Operating revenues:
Electricity Sales $ 908
$ 939
$ 864
$ 462
$ 549
$ 331
$ 459
$ 211
Capacity —
—
144
283
175
162
30
44
Sales to affiliates 1,840
1,459
678
397
72
31
223
240
Rolloff of unrealized net gains (losses) representing positions settled in the current period 370
348
3
44
(20 ) 23
(28 ) 1
Unrealized net gains (losses) on hedging activities 100
(518 ) 55
(55 ) 40
(50 ) 41
(25 )
Unrealized net gains (losses) on hedging activities with affiliates 136
(37 ) 89
(27 ) —
(5 ) (15 ) 20
Other revenues 2
(1 ) —
—
(3 ) (5 ) (13 ) (3 )
Operating revenues 3,356
2,190
1,833
1,104
813
487
697
488

Table of Contents

Nine Months Ended September 30,
ERCOT PJM NY/NE MISO
2019 2018 2019 2018 2019 2018 2019 2018
Fuel, purchased power costs and delivery fees:
Fuel for generation facilities and purchased power costs (928 ) (976 ) (828 ) (569 ) (443 ) (258 ) (440 ) (313 )
Fuel for generation facilities and purchased power costs from affiliates —
—
(1 ) (8 ) (1 ) —
1
30
Unrealized (gains) losses from hedging activities 10
—
(32 ) 18
13
10
10
4
Ancillary and other costs (144 ) (109 ) (1 ) (1 ) (5 ) (28 ) (7 ) (4 )
Fuel, purchased power costs and delivery fees (1,062 ) (1,085 ) (862 ) (560 ) (436 ) (276 ) (436 ) (283 )
Net income (loss) $ 1,346
$ 236
$ 283
$ 86
$ 122
$ 41
$ (42 ) $ 29
Adjusted EBITDA $ 1,183
$ 809
$ 590
$ 394
$ 258
$ 185
$ 59
$ 57
Production volumes (GWh):
Natural gas facilities 30,255
26,413
27,989
17,969
13,593
9,795

Lignite and coal facilities 20,613
21,257
11,535
8,717
19,321
14,633
Nuclear facilities 13,951
15,744

Solar/Battery facilities 354
266

Capacity factors:
CCGT facilities 55.9 % 59.6 % 70.2 % 66.7 % 43.9 % 48.0 %
Lignite and coal facilities 69.9 % 75.7 % 50.6 % 59.6 % 56.1 % 59.4 %
Nuclear facilities 92.6 % 104.5 %
Weather - percent of normal (a):
Cooling degree days 100.0 % 102.0 % 109.0 % 118.0 % 100.0 % 116.0 % 110.0 % 133.0 %
Heating degree days 110.0 % 104.0 % 97.0 % 100.0 % 100.0 % 100.0 % 98.0 % 96.0 %
Market pricing:
Average ERCOT North power price ($/MWh) $ 40.38
$ 29.31

Average Market On-Peak Power Prices ($MWh) (b):
PJM West Hub $ 31.22
$ 42.59

AEP Dayton Hub $ 31.27
$ 40.57

NYISO Zone C $ 27.15
$ 37.01

Massachusetts Hub $ 34.83
$ 48.87

Indiana Hub $ 31.87
$ 38.13
Northern Illinois Hub $ 28.81
$ 33.98
Average natural gas price - (c)
TetcoM3 ($/MMBtu) $ 2.47
$ 3.73

Algonquin Citygates ($/MMBtu) $ 3.16
$ 4.78

~~____________~~


~~(a)~~	~~Reflects cooling degree days or heating degree days for the region based on Weather Services International (WSI) data.~~


~~(b)~~	~~Reflects the average of day-ahead quoted prices for the periods presented and does not necessarily reflect prices we realized.~~


~~(c)~~	~~Reflects the average of daily quoted prices for the periods presented and does not reflect costs incurred by us.~~

The following table presents changes in net income (loss) and Adjusted EBITDA for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019.


	Six Months Ended June 30, 2020 Compared to 2019
	ERCOT		PJM		NY/NE		MISO

Favorable/(unfavorable) change in revenue net of fuel	$	167	$	30	$	(39)	$	(8)
Favorable/(unfavorable) change in other operating costs	(24)		14		3		(19)
Unfavorable change in selling. general and administrative expenses	(6)		(3)		(3)		(12)
Other	(20)		(8)		(6)		3
Change in Adjusted EBITDA	$	117	$	33	$	(45)	$	(36)
Favorable/(unfavorable) change in depreciation and amortization	11		(38)		7		(13)
Change in unrealized net (gains)/losses on hedging activities	(927)		(256)		(50)		(74)
Fresh start/purchase accounting impacts	(3)		(19)		(4)		(4)
Transition and merger expenses	8		(4)		2		24
Impairment of long-lived assets	—		—		—		(84)
Loss on disposal of investment in NELP	—		(14)		(15)		—
Other (including interest)	(5)		5		2		9
Change in Net income (loss)	$	(799)	$	(293)	$	(103)	$	(178)

Nine Months Ended September 30, 2019
Compared to 2018
ERCOT PJM NY/NE MISO
Favorable impact related to operations acquired in the Merger (a) $ —
$ 201
$ 86
$ 47
Favorable/(unfavorable) change in revenue net of fuel 365
1
(7 ) (73 )
Favorable/(unfavorable) change in other operating costs (22 ) 1
(3 ) 25
Favorable/(unfavorable) change in selling. general and administrative expenses 13
(4 ) —
2
Other 18
(3 ) (3 ) 1
Change in Adjusted EBITDA $ 374
$ 196
$ 73
$ 2
Unfavorable change in depreciation and amortization (83 ) (133 ) (51 ) (5 )
Unrealized net gains on hedging activities 823
135
55
8
Fresh start/purchase accounting impacts 4
—
6
—
Transition and merger expenses (4 ) 3
(1 ) (20 )
Generation plant retirement expenses —
—
—
(47 )
Other (4 ) (4 ) (1 ) (9 )
Change in Net income $ 1,110
$ 197
$ 81
$ (71 )

~~____________~~


~~(a)~~	Impact related to PJM, NY/NE and MISO operations acquired in the Merger are the combined results for the first quarter of 2019, for which there is no comparable period for 2018 due to the Merger date of April 9, 2018.

The change in ERCOT segment results was driven by ~~a $365 million increase in generation revenue net of fuel reflecting an increase in production volumes~~lower unrealized hedging gains and lower insurance reimbursement, partially offset by higher realized ~~power prices.~~prices through hedging activities and plant optimization efforts.

The change in PJM segment results was driven by ~~$201 million related~~lower unrealized hedging gains, lower capacity revenue and loss on disposal of equity method investment in NELP for 100% ownership of North Jersey Energy Associates (see Note 18 to ~~operations in~~ the ~~first quarter of 2019 acquired in the Merger.~~Financial Statements), partially offset by higher realized prices through hedging activities and plant optimization efforts.

The change in NY/NE segment results was driven by ~~$86 million related~~lower capacity revenue and loss on disposal of equity method investment in NELP for 100% ownership of North Jersey Energy Associates (see Note 18 to ~~operations in~~ the ~~first quarter of 2019 acquired in the Merger.~~Financial Statements).

The change in MISO segment results was driven by ~~a $76 million decrease in revenue net~~lower unrealized hedging gains, higher operating costs and the impairment of ~~fuel reflecting lower realized price~~the Joppa/EEI coal facility and ~~lower capacity revenue, partially offset by $47 million~~ related ~~to operations in the first quarter of 2019 acquired in the Merger.~~inventory.

Asset Closure Segment —Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 Compared to Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019


	Three Months Ended June 30,						Favorable (Unfavorable) Change			Six Months Ended June 30,					Favorable (Unfavorable) Change
	2020		2019						2020			2019
Operating revenues	$	—	$	58	$	(58)	$	—		$	143		$	(143)
Fuel, purchased power costs and delivery fees	—		(42)		42		—			(101)			101
Operating costs	(9)		(32)		23		(18)			(71)			53

Selling, general and administrative expenses	(5)		(11)		6		(12)			(22)			10


Operating loss	(14)		(27)		13		(30)			(51)			21
Other income	—		1		(1)		1			1			—
Other deductions	—		—		—		(2)			—			(2)


Loss before income taxes	(14)		(26)		12		(31)			(50)			19

Net loss	$	(14)	$	(26)	$	12	$	(31)		$	(50)		$	19






Adjusted EBITDA	$	(13)	$	(25)	$	12	$	(30)		$	(47)		$	17
Production volumes (GWh)	—		1,816		(1,816)		—			4,292			(4,292)

Three Months Ended September 30,
Favorable (Unfavorable)
Change

Nine Months Ended
September 30,

Favorable (Unfavorable)
Change
2019 2018 2019 2018
Operating revenues $ —
$ (1 ) $ 1
$ —
$ 48
$ (48 )
Fuel, purchased power costs and delivery fees —
—
—
—
(37 ) 37
Operating costs (4 ) (3 ) (1 ) (25 ) (33 ) 8
Selling, general and administrative expenses (5 ) —
(5 ) (14 ) (4 ) (10 )
Operating loss (9 ) (4 ) (5 ) (39 ) (26 ) (13 )
Other income 1
—
1
2
2
—
Net loss $ (8 ) $ (4 ) $ (4 ) $ (37 ) $ (24 ) $ (13 )
Adjusted EBITDA $ (4 ) $ (12 ) $ 8
$ (32 ) $ (29 ) $ (3 )
Production volumes (GWh) —
—
—
—
1,513
(1,513 )

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Results for the Asset Closure segment primarily reflect the retirement of the ~~Stuart~~Coffeen, Duck Creek, Havana and ~~Killen~~Hennepin plants in ~~May 2018 (acquired in the Merger), retirement of the Northeastern waste coal plant in October 2018~~November and ~~the retirement of the Monticello, Sandow and Big Brown plants in January and February 2018~~December 2019 (see Note 4 to the Financial Statements). Operating costs for the ~~nine~~three and six months ended ~~September~~June 30, ~~2019~~2020 included ongoing costs associated with ~~closing these plants.~~the decommissioning and reclamation of retired plants and mines.

Energy-Related Commodity Contracts and Mark-to-Market Activities

The table below summarizes the changes in commodity contract assets and liabilities for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019. The net change in these assets and liabilities, excluding "other activity" as described below, reflects ~~$625~~$123 million and $703 million in unrealized net gains for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019, ~~and $207 million in unrealized net losses for the nine months ended September 30, 2018,~~respectively, arising from mark-to-market accounting for positions in the commodity contract portfolio.

Nine Months Ended September 30,
2019 2018
Commodity contract net asset (liability) at beginning of period $ (850 ) $ (96 )
Settlements/termination of positions (a) 321
416
Changes in fair value of positions in the portfolio (b) 304
(623 )
Acquired commodity contracts (c) (22 ) (452 )
Other activity (d) (131 ) 72
Commodity contract net asset (liability) at end of period $ (378 ) $ (683 )


	Six Months Ended June 30,
	2020		2019
Commodity contract net liability at beginning of period	$	(279)	$	(850)
Settlements/termination of positions (a)	(82)		(76)
Changes in fair value of positions in the portfolio (b)	205		779

Other activity (c)	7		(73)
Commodity contract net liability at end of period	$	(149)	$	(220)

____________

~~(a)~~

Represents reversals of previously recognized unrealized gains and losses upon settlement/termination (offsets realized gains and losses recognized in the settlement period). The nine months ended September 30, 2019 and 2018 include reversals of $1 million of unrealized losses and $10 million of previously recorded unrealized gains related to Vistra Energy beginning balances. The nine months ended September 30, 2019 and 2018 also include reversals of $116 million and $315 million, respectively, of previously recorded unrealized losses related to commodity contracts acquired in the Merger. Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.


~~(b)~~	Represents unrealized net gains (losses) recognized, reflecting the effect of changes in fair value. Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.


~~(c)~~	~~Includes fair value of commodity contracts acquired on the Crius Acquisition Date in 2019 and on the Merger Date in 2018 (see Note 2 to the Financial Statements).~~


~~(d)~~	Represents changes in fair value of positions due to receipt or payment of cash not reflected in unrealized gains or losses. Amounts are generally related to premiums related to options purchased or sold as well as certain margin deposits classified as settlement for certain transactions executed on the CME.

(a)Represents reversals of previously recognized unrealized gains and losses upon settlement/termination (offsets realized gains and losses recognized in the settlement period). The six months ended June 30, 2020 and 2019 include reversals of $1 million of previously recorded unrealized losses and $7 million of previously recorded unrealized gains related to Vistra beginning balances, respectively. The six months ended June 30, 2020 and 2019 also include reversals of $21 million and $13 million, respectively, of previously recorded unrealized losses related to commodity contracts acquired in the Merger, Crius Transaction and Ambit Transaction. Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.

(b)Represents unrealized net gains (losses) recognized, reflecting the effect of changes in fair value. Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.

(c)Represents changes in fair value of positions due to receipt or payment of cash not reflected in unrealized gains or losses. Amounts are generally related to premiums related to options purchased or sold as well as certain margin deposits classified as settlement for certain transactions executed on the CME.

Maturity Table — The following table presents the net commodity contract liability arising from recognition of fair values at ~~September~~June 30, ~~2019,~~2020, scheduled by the source of fair value and contractual settlement dates of the underlying positions.


	Maturity dates of unrealized commodity contract net liability at June 30, 2020
	Less than 1 year		1-3 years		4-5 years		Excess of 5 years		Total
Prices actively quoted	$	108	$	(43)	$	(2)	$	—	$	63
Prices provided by other external sources	(247)		(78)		1		(2)		(326)
Prices based on models	39		39		21		15		114
Total	$	(100)	$	(82)	$	20	$	13	$	(149)

Maturity dates of unrealized commodity contract net liability at September 30, 2019
Source of fair value
Less than
1 year
1-3 years 4-5 years
Excess of
5 years
Total
Prices actively quoted $ (35 ) $ 1
$ (13 ) $ —
$ (47 )
Prices provided by other external sources (304 ) 26
(1 ) —
(279 )
Prices based on models —
7
13
(72 ) (52 )
Total $ (339 ) $ 34
$ (1 ) $ (72 ) $ (378 )

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FINANCIAL CONDITION

Operating Cash Flows

~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 Compared to ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 — Cash provided by operating activities totaled ~~$1.823~~$1.309 billion and ~~$863~~$882 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The favorable change of ~~$960~~$427 million was primarily driven by increased cash from operations ~~reflecting operations acquired in the Merger~~ and a decrease in cash margin deposits posted with third-parties.

Depreciation and amortization expense reported as a reconciling adjustment in the condensed consolidated statements of ~~condensed consolidated~~ cash flows exceeds the amount reported in the condensed consolidated statements of ~~condensed consolidated income~~operations by ~~$181~~$147 million and ~~$103~~$96 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The difference represented amortization of nuclear fuel, which is reported as fuel costs in the condensed consolidated statements of ~~consolidated income~~operations consistent with industry practice, and amortization of intangible net assets and liabilities that are reported in various other condensed consolidated statements of ~~condensed consolidated income~~operations line items including operating revenues and fuel and purchased power costs and delivery fees.

Investing Cash Flows

Cash used in investing activities totaled $653 million and $399 million for the six months ended June 30, 2020 and 2019, respectively. Capital expenditures totaled $588 million and $303 million for the six months ended June 30, 2020 and 2019, respectively. Cash used in investing activities for the six months ended June 30, 2020 and 2019 also reflected net purchases of environmental allowances of $85 million and $107 million, respectively. For the six months ended June 30, 2020 and 2019, capital expenditures consisted of:


	Six Months Ended June 30,
	2020		2019
Capital expenditures, including LTSA prepayments	$	297	$	247
Nuclear fuel purchases	$	36	$	20
Growth and development expenditures	$	255	$	36
Capital expenditures	$	588	$	303

Financing Cash Flows

Cash used in financing activities totaled ~~$784~~$698 million and ~~$2.172 billion in~~$170 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~decrease in cash used in financing activities~~change was primarily driven by:

•the issuance of $4.6 billion principal amount of Vistra Operations senior secured and unsecured notes in ~~2019 compared to the issuance of $1.0 billion~~2019;

•$500 million principal amount of outstanding of 5.875% senior notes redeemed in June 2020;

•$100 million of term loans under the Vistra Operations ~~senior unsecured notes~~Credit Facility repaid in ~~2018;~~March 2020, and

~~redemption in 2018 of $850~~•$81 million principal amount of outstanding of 8.000% senior notes redeemed in January 2020,

partially offset by:

•cash tender offers to purchase approximately $2.0 billion of senior unsecured notes assumed in the ~~Merger;~~Merger in 2019;

~~the amendment to the Vistra Operations Credit Facilities in 2018, including the repayment of $500 million of term loans;~~

~~$89 million net decrease in incremental borrowings under the accounts receivable securitization program;~~

~~$46 million decrease in debt tender offer and other financing fees in 2019 compared to 2018,~~

~~partially offset by:~~

~~cash tender offers and early redemptions to purchase senior unsecured notes assumed in the Merger of $2.5 billion in 2019 compared to $1.5 billion in 2018;~~

•repayment of approximately $2.0 billion of term loans under the Vistra Operations Credit Facilities in 2019;

•$~~218~~457 million ~~increase~~ in cash paid for share repurchases in ~~2019~~2019;

•$200 million increase in net short-term borrowings under the Revolving Credit Facility in 2020, and

•$136 million decrease in debt tender offer and other financing fees in 2020 compared to ~~2018, and~~2019.

~~$181 million of cash dividend paid to stockholders.~~

~~Investing Cash Flows~~

Cash used in investing activities totaled $979 million in the nine months ended September 30, 2019 compared to cash provided by investing activities of $133 million in the nine months ended September 30, 2018. Capital expenditures (including LTSA prepayments, nuclear fuel purchases and development and growth expenditures) totaled $474 million and $303 million in the nine months ended September 30, 2019 and 2018, respectively. Cash used in investing activities in the nine months ended September 30, 2019 also reflected $374 million of net cash paid in the Crius Transaction and net purchases of environmental allowances of $137 million. Cash provided by investing activities in the nine months ended September 30, 2018 also reflected $445 million of cash acquired in the Merger (see Note 2 to the Financial Statements).

Debt Activity

See Note 11 to the Financial Statements for details of the Vistra Operations Credit Facilities and other long-term debt.

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Available Liquidity

The following table summarizes changes in available liquidity for the ~~nine~~six months ended ~~September~~June 30, ~~2019:~~2020:


	June 30, 2020		December 31, 2019		Change
Cash and cash equivalents	$	382	$	300	$	82
Vistra Operations Credit Facilities — Revolving Credit Facility	1,287		1,426		(139)

Total available liquidity	$	1,669	$	1,726	$	(57)

September 30, 2019 December 31, 2018 Change
Cash and cash equivalents $ 707
$ 636
$ 71
Vistra Operations Credit Facilities — Revolving Credit Facility 1,844
1,135
709
Vistra Operations — Alternative Letter of Credit Facility 11
—
11
Total available liquidity $ 2,562
$ 1,771
$ 791

The ~~$791~~$57 million ~~increase~~decrease in available liquidity infor the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 was primarily driven by cash from operations, $500 million of new Alternate LOC Facilities and $225 million of additional available capacity under the Revolving Credit Facility, partially offset by $632 million in cash paid for share repurchases, $474$588 million of capital expenditures (including LTSA prepayments, nuclear fuel and development and growth expenditures), ~~$374~~$500 million principal amount of outstanding 5.875% senior notes redeemed in June 2020, $100 million of ~~net cash paid~~term loans under the Vistra Operations Credit Facility repaid in ~~the Crius Transaction, $181~~March 2020, $81 million principal amount of outstanding of 8.000% senior notes redeemed in January 2020 and $132 million in dividends paid to shareholders, ~~and $170 million in debt tender offer and other financing fees.~~partially offset by cash from operations.

Based upon our current internal financial forecasts, we believe that we will have sufficient liquidity to fund our anticipated cash requirements, including those related to our capital allocation initiatives, through at least the next 12 months. Our operational cash flows tend to be seasonal and weighted toward the second half of the year.

Liquidity Effects of Commodity Hedging and Trading Activities

We have entered into commodity hedging and trading transactions that require us to post collateral if the forward price of the underlying commodity moves such that the hedging or trading instrument we hold has declined in value. We use cash, letters of credit and other forms of credit support to satisfy such collateral posting obligations. See Note 11 to the Financial Statements for discussion of the Vistra Operations Credit Facilities.

Exchange cleared transactions typically require initial margin (i.e., the upfront cash and/or letter of credit posted to take into account the size and maturity of the positions and credit quality) in addition to variation margin (i.e., the daily cash margin posted to take into account changes in the value of the underlying commodity). The amount of initial margin required is generally defined by exchange rules. Clearing agents, however, typically have the right to request additional initial margin based on various factors, including market depth, volatility and credit quality, which may be in the form of cash, letters of credit, a guaranty or other forms as negotiated with the clearing agent. Cash collateral received from counterparties is either used for working capital and other business purposes, including reducing borrowings under credit facilities, or is required to be deposited in a separate account and restricted from being used for working capital and other corporate purposes. With respect to over-the-counter transactions, counterparties generally have the right to substitute letters of credit for such cash collateral. In such event, the cash collateral previously posted would be returned to such counterparties, which would reduce liquidity in the event the cash was not restricted.

At ~~September~~June 30, ~~2019,~~2020, we received or posted cash and letters of credit for commodity hedging and trading activities as follows:

•$~~236~~161 million in cash has been posted with counterparties as compared to ~~$361~~$202 million posted at December 31, ~~2018;~~2019;

•$815 million in cash has been received from counterparties as compared to $4$8 million received at December 31, ~~2018;~~2019;

•$~~1.224~~1.117 billion in letters of credit have been posted with counterparties as compared to ~~$1.185~~$1.150 billion posted at December 31, ~~2018,~~2019, and

•$1317 million in letters of credit have been received from counterparties as compared to ~~$12~~$17 million received at December 31, ~~2018.~~2019.

Income Tax Payments

In the next 12 months, we do not expect to make federal income tax payments due to ~~Vistra Energy's forecasted taxable loss position in 2019. In February 2019, we received a refund~~Vistra's use of ~~$21 million related to Vistra Energy's 2017 federal tax return.~~NOL carryforwards. We expect to make approximately $55 million in state income tax payments, ~~of approximately $25~~offset by $13 million in state tax refunds, and $2$1 million in TRA payments in the next 12 months. ~~There~~In addition, we expect to receive approximately $129 million in AMT refundable credits in the next 12 months.

For the six months ended June 30, 2020, we received a refund of $37 million related to alternative minimum tax credits claimed on Dynegy tax returns. For the six months ended June 30, 2020, there were no federal income tax payments, ~~and $40~~$5 million in state income tax payments ~~for the nine months ended September 30, 2019. There were $66 million in state income tax payments in the nine months ended September 30, 2018.~~and no TRA payments.

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Financial Covenants

The Credit Facilities Agreement includes a covenant, solely with respect to the Revolving Credit Facility and solely during a compliance period (which, in general, is applicable when the aggregate revolving borrowings and issued revolving letters of credit (in excess of $300 million) exceed 30% of the revolving commitments), that requires the consolidated first-lien net leverage ratio not exceed 4.25 to 1.00. ~~Although the period ended September~~As of June 30, ~~2019 was not a compliance period,~~2020, we ~~would have been~~were in compliance with this financial ~~covenant if it was required to be tested at such date.~~covenant.

See Note 11 to the Financial Statements for discussion of other covenants related to the Vistra Operations Credit Facilities.

Collateral Support Obligations

The RCT has rules in place to assure that parties can meet their mining reclamation obligations. In September 2016, the RCT agreed to a collateral bond of up to $975 million to support Luminant's reclamation obligations. The collateral bond is effectively a first lien on all of Vistra Operations' assets (which ranks pari passu with the Vistra Operations Credit Facilities) that contractually enables the RCT to be paid (up to $975 million) before the other first-lien lenders in the event of a liquidation of our assets. Collateral support relates to land mined or being mined and not yet reclaimed as well as land for which permits have been obtained but mining activities have not yet begun and land already reclaimed but not released from regulatory obligations by the RCT, and includes cost contingency amounts.

The PUCT has rules in place to assure adequate creditworthiness of each REP, including the ability to return customer deposits, if necessary. Under these rules, at ~~September~~June 30, ~~2019,~~2020, Vistra ~~Energy~~ has posted letters of credit in the amount of ~~$38~~$59 million with the PUCT, which is subject to adjustments.

The ~~RTOs/ISOs~~ISOs/RTOs we operate in have rules in place to assure adequate creditworthiness of parties that participate in the markets operated by those ~~RTOs/ISOs.~~ISOs/RTOs. Under these rules, Vistra ~~Energy~~ has posted collateral support totaling ~~$414~~$383 million in the form of letters of credit, $10 million in the form of a surety bond and $1$2 million of cash at ~~September~~June 30, ~~2019~~2020 (which is subject to daily adjustments based on settlement activity with the ~~RTOs/ISOs)~~ISOs/RTOs).

Material Cross Default/Acceleration Provisions

Certain of our contractual arrangements contain provisions that could result in an event of default if there was a failure under financing arrangements to meet payment terms or to observe covenants that could result in an acceleration of payments due. Such provisions are referred to as "cross default" or "cross acceleration" provisions.

A default by Vistra Operations or any of its restricted subsidiaries in respect of certain specified indebtedness in an aggregate amount in excess of $300 million may result in a cross default under the Vistra Operations Credit Facilities. Such a default would allow the lenders to accelerate the maturity of outstanding balances (approximately ~~$3.8~~$3.1 billion at ~~September~~June 30, ~~2019)~~2020) including $550 million of cash borrowings under the Revolving Credit Facility) under such facilities.

Each of Vistra Operations' (or its subsidiaries') commodity hedging agreements and interest rate swap agreements that are secured with a lien on its assets on a pari passu basis with the Vistra Operations Credit Facilities lenders contains a cross default provision. An event of a default by Vistra Operations or any of its subsidiaries relating to indebtedness equal to or above a threshold defined in the applicable agreement that results in the acceleration of such debt, would give such counterparty under these hedging agreements the right to terminate its hedge or interest rate swap agreement with Vistra Operations (or its applicable subsidiary) and require all outstanding obligations under such agreement to be settled.

Under (i) the Vistra ~~Operations'~~Operations Senior Unsecured Indentures and the Vistra Operations Senior Secured Indenture, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount of $300 million or more, or (ii) as of June 30, 2020, with respect to the ~~Vistra Energy~~8.125% Senior Unsecured ~~Indentures (except with respect to the Consent Senior Notes),~~Indenture, a default under any document evidencing indebtedness for borrowed money by Vistra ~~Energy~~ or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount of $100 million or more, may ~~result~~have resulted in a cross default under the Vistra Operations Senior Unsecured Notes, the Senior Secured Notes, the ~~Vistra Energy Senior Unsecured Notes (except with respect to the Consent Senior Notes),~~8.125% senior notes, the Vistra Operations Credit Facilities, the Receivables Facility, the Alternate LOC Facilities, and other current or future documents evidencing any indebtedness for borrowed money by the applicable borrower or issuer, as the case may be, and the applicable Guarantor Subsidiaries party thereto.

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Additionally, we enter into energy-related physical and financial contracts, the master forms of which contain provisions whereby an event of default or acceleration of settlement would occur if we were to default under an obligation in respect of borrowings in excess of thresholds, which may vary by contract.

The Receivables Facility contains a cross default provision. The cross default provision applies, among other instances, if Vistra Operations, the performance guarantor, fails to make a payment of principal or interest on any indebtedness that is outstanding in a principal amount of at least $300 million, or, in the case of TXU Energy, the originator and servicer, in a principal amount of at least $50 million, or if other events occur or circumstances exist under such indebtedness which give rise to a right of the debtholder to accelerate such indebtedness, or if such indebtedness becomes due before its stated maturity. If this cross-default provision is triggered, a termination event under the Receivables Facility would occur and the Receivables Facility may be terminated.

Under the Alternate LOC Facilities, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount of $300 million or more, may result in a termination of the Alternate LOC Facilities.

~~Guarantees~~Guarantor Summary Financial Information

As of June 30, 2020, our 8.125% senior notes were guaranteed by substantially all of our wholly owned subsidiaries. The following tables summarize the combined financial information of (i) Vistra Corp. (Parent), which is the ultimate parent company and issuer of the senior notes with effect as of the Merger Date, on a stand-alone, unconsolidated basis and (ii) the guarantor subsidiaries of Vistra (Guarantor Subsidiaries). The Guarantor Subsidiaries consist of the wholly owned subsidiaries, which jointly, severally, fully and unconditionally, guarantee the payment obligations under the senior notes. See Note 11 to the Financial Statements for discussion of the senior notes and Note 13 to the Financial Statements for discussion of dividend restrictions of Vistra Operations (a guarantor subsidiary of Vistra) and Parent.

This financial information should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto of Vistra. Transactions between the Parent and the Guarantor Subsidiaries have been eliminated. The inclusion of Vistra's subsidiaries as Guarantor Subsidiaries in the summary financial information is determined as of the most recent balance sheet date presented.

The Parent files a consolidated U.S. federal income tax return. All consolidated income tax expense or benefits and deferred tax assets and liabilities are included in the Guarantor summary financial information presented below.


	Six Months Ended June 30, 2020
Revenues	$	5,130
Operating income	$	829
Net income	$	274
Net income attributable to Vistra	$	274


	June 30, 2020			June 30, 2020
Current assets	$	3,303	Current liabilities	$	3,741
Noncurrent assets	21,798		Noncurrent liabilities	13,432
Total assets	$	25,101	Total liabilities	$	17,173
			Noncontrolling interest	$	(12)

Guarantees

See Note 12 to the Financial Statements for discussion of guarantees.

OFF–BALANCE SHEET ARRANGEMENTS

As of ~~September~~June 30, ~~2019,~~2020, we have no off-balance sheet arrangements ~~other than certain investments in energy and energy-related entities that are accounted for under the equity method of accounting~~ which are ~~not~~ expected to have any material impact on our financial condition, results of operations or liquidity.

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COMMITMENTS AND CONTINGENCIES

See Note 1312 to the Financial Statements for discussion of commitments and contingencies.

CHANGES IN ACCOUNTING STANDARDS

See Note 1 to the Financial Statements for discussion of changes in accounting standards.


~~Item 3.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk that in the normal course of business we may experience a loss in value due to changes in market conditions that affect economic factors such as commodity prices, interest rates and counterparty credit. Our exposure to market risk is affected by several factors, including the size, duration and composition of our energy and financial portfolio, as well as the volatility and liquidity of markets.

Risk Oversight

We manage the commodity price, counterparty credit and commodity-related operational risk related to the competitive energy business within limitations established by senior management and in accordance with overall risk management ~~policies.~~framework established and overseen by the Company's board of directors (Board) and the sustainability and risk committee of the Board, as applicable. Interest rate risk is managed centrally by our treasury function. Market risks are monitored by risk management groups that operate independently of the wholesale commercial operations, utilizing defined practices and analytical methodologies. These techniques measure the risk of change in value of the portfolio of contracts and the hypothetical effect on this value from changes in market conditions and include, but are not limited to, position reporting and review, Value at Risk (VaR) methodologies and stress test scenarios. Key risk control activities include, but are not limited to, transaction review and approval (including credit review), operational and market risk measurement, transaction authority oversight, validation of transaction capture, market price validation and reporting, and portfolio valuation and reporting.

Commodity Price Risk

Our business is subject to the inherent risks of market fluctuations in the price of electricity, natural gas and other energy-related products it markets or purchases. We actively manage the portfolio of generation assets, fuel supply and retail sales load to mitigate the near-term impacts of these risks on results of operations. Similar to other participants in the market, we cannot fully manage the long-term value impact of structural declines or increases in natural gas and power prices.

In managing energy price risk, we enter into a variety of market transactions including, but not limited to, short- and long-term contracts for physical delivery, exchange-traded and over-the-counter financial contracts and bilateral contracts with customers. Activities include hedging, the structuring of long-term contractual arrangements and proprietary trading. We continuously monitor the valuation of identified risks and adjust positions based on current market conditions.

VaR Methodology — A VaR methodology is used to measure the amount of market risk that exists within the portfolio under a variety of market conditions. The resultant VaR produces an estimate of a portfolio's potential for loss given a specified confidence level and considers, among other things, market movements utilizing standard statistical techniques given historical and projected market prices and volatilities.

Parametric processes are used to calculate VaR and are considered by management to be the most effective way to estimate changes in a portfolio's value based on assumed market conditions for liquid markets. The use of this method requires a number of key assumptions, such as use of (i) an assumed confidence level, (ii) an assumed holding period (i.e., the time necessary for management action, such as to liquidate positions) and (iii) historical estimates of volatility and correlation data. The table below details a VaR measure related to various portfolios of contracts.

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VaR for Underlying Generation Assets and Energy-Related Contracts — This measurement estimates the potential loss in value, due to changes in market conditions, of all underlying generation assets and contracts, based on a 95% confidence level and an assumed holding period of 60 ~~days for a~~days. The forward period ~~through December 2020 for~~covered by this calculation includes the ~~nine months ended September 30, 2019~~current and ~~December 2019 for~~subsequent calendar year at the ~~year ended December 31, 2018.~~time of calculation.


	Six Months Ended June 30, 2020		Year Ended December 31, 2019
Month-end average VaR	$	281	$	263
Month-end high VaR	$	361	$	520
Month-end low VaR	$	205	$	103

Nine Months
Ended
September 30, 2019 Year Ended December 31, 2018
Month-end average VaR: $ 311
$ 182
Month-end high VaR: $ 520
$ 267
Month-end low VaR: $ 159
$ 65

The ~~increase~~VaR risk measures in 2020 were primarily comparable to the ~~month-end~~prior year. Month-end high VaR ~~risk measure~~was lower in ~~2019 is primarily driven by an increase~~2020 due to lower prices and a decrease in volatility in ERCOT ~~during~~as compared to the prior year.

Interest Rate Risk

At ~~September~~June 30, ~~2019,~~2020, the potential reduction of annual pretax earnings over the next twelve months due to a one percentage-point (100 basis points) increase in floating interest rates on long-term debt totaled approximately $7$13 million, taking into account the interest rate swaps discussed in Note 11 to Financial Statements.

Credit Risk

Credit risk relates to the risk of loss associated with nonperformance by counterparties. We minimize credit risk by evaluating potential counterparties, monitoring ongoing counterparty risk and assessing overall portfolio risk. This includes review of counterparty financial condition, current and potential credit exposures, credit rating and other quantitative and qualitative credit criteria. We also employ certain risk mitigation practices, including utilization of standardized master agreements that provide for netting and setoff rights, as well as credit enhancements such as margin deposits and customer deposits, letters of credit, parental guarantees and surety bonds. See Note 1615 to the Financial Statements for further discussion of this exposure.

Bankruptcies -— We are party to (i) certain gas transportation agreements with PG&E and (ii) a long-term ~~renewable power purchase agreement~~resource adequacy contract with PG&E in connection with the Moss Landing battery storage project, which was originally approved by the California Public Utilities Commission (CPUC) in November 2018. PG&E filed for Chapter 11 bankruptcy protection in January 2019. In November 2019, the bankruptcy court approved PG&E's motion requesting approval of the assumption of the resource adequacy contract subject to the CPUC approving the terms of an amendment to the resource adequacy contract, and the CPUC approved the terms of the amendment in January 2020. PG&E emerged from bankruptcy protection in July 2020.

As of ~~September~~June 30, ~~2019,~~2020, we had no outstanding accounts receivable from PG&E and accordingly, we have not recorded a reserve related to the pre-petition receivables. While our assumptions and conclusions may change, we could have future impairment losses or ~~specifically with respect to the gas transportation agreements,~~ be required to seek alternative, higher-cost fuel transportation methods if any of the terms of the ~~contracts~~gas transportation agreements are not honored by PG&E or the ~~contracts~~gas transportation agreements are rejected through the bankruptcy process.

Credit Exposure — Our gross credit exposure (excluding collateral impacts) associated with retail and wholesale trade accounts receivable and net derivative assets arising from commodity contracts and hedging and trading activities totaled ~~$1.328~~$1.394 billion at ~~September~~June 30, ~~2019.~~2020.

At ~~September~~June 30, ~~2019,~~2020, Retail segment credit exposure totaled ~~$1.071~~$1.020 billion, including ~~$1.056~~$1.009 billion of trade accounts receivable and ~~$15~~$11 million related to derivative assets. Cash deposits and letters of credit held as collateral for these receivables totaled ~~$34~~$78 million, resulting in a net exposure of ~~$1.037 billion. We believe the risk of material loss (after consideration of bad debt allowances) from nonperformance by these customers is unlikely based upon historical experience.~~$942 million. Allowances for uncollectible accounts receivable are established for the potential loss from nonpayment by these customers based on historical experience, market or operational conditions and changes in the financial condition of large business customers.

At ~~September~~June 30, ~~2019,~~2020, aggregate ERCOT, PJM, NY/NE and MISO segments credit exposure totaled ~~$257~~$374 million including ~~$151~~$316 million related to derivative assets and ~~$106~~$58 million of trade accounts receivable, after taking into account master netting agreement provisions but excluding collateral impacts.

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Including collateral posted to us by counterparties, our net ERCOT, PJM, NY/NE and MISO segments exposure was ~~$249~~$365 million, substantially all of which is with investment grade customers as seen in the following table that presents the distribution of credit exposure at ~~September~~June 30, ~~2019.~~2020. Credit collateral includes cash and letters of credit but excludes other credit enhancements such as guarantees or liens on assets.


	Exposure Before Credit Collateral		Credit Collateral		Net Exposure
Investment grade	$	348	$	7	$	341
Below investment grade or no rating	26		2		24
Totals	$	374	$	9	$	365

Exposure
Before Credit
Collateral

Credit
Collateral

Net
Exposure
Investment grade $ 206
$ —
$ 206
Below investment grade or no rating 51
8
43
Totals $ 257
$ 8
$ 249

Significant ~~(10%~~(i.e., 10% or greater) concentration of credit exposure exists with ~~one counterparty,~~three counterparties, which represented an aggregate ~~$96~~$218 million, or ~~39%~~60%, of the total net exposure. We view exposure to these counterparties to be within an acceptable level of risk tolerance due to the counterparties' credit ratings, each of which is rated as investment grade, the counterparties' market role and deemed creditworthiness and the importance of our business relationship with the counterparties. An event of default by one or more counterparties could subsequently result in termination-related settlement payments that reduce available liquidity if amounts such as margin deposits are owed to the counterparties or delays in receipts of expected settlements owed to us.

Contracts classified as "normal" purchase or sale and non-derivative contractual commitments are not marked-to-market in the financial statements and are excluded from the detail above. Such contractual commitments may contain pricing that is favorable considering current market conditions and therefore represent economic risk if the counterparties do not perform.

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FORWARD-LOOKING STATEMENTS

This report and other presentations made by us contain "forward-looking statements." All statements, other than statements of historical facts, that are included in this report, or made in presentations, in response to questions or otherwise, that address activities, events or developments that may occur in the future, including (without limitation) such matters as activities related to our financial or operational projections, capital allocation, capital expenditures, liquidity, dividend policy, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of power generation assets, market and industry developments and the growth of our businesses and operations (often, but not always, through the use of words or phrases such as "intends," "plans," "will likely," "unlikely," "expected," "anticipated," "estimated," "should," "may," "projection," "target," "goal," "objective" and "outlook"), are forward-looking statements. Although we believe that in making any such forward-looking statement our expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and risks and is qualified in its entirety by reference to the discussion under Part II, Item ~~1A.~~1A Risk Factors and Part I, Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations in this quarterly report on Form 10-Q and the following important factors, among others, that could cause our actual results to differ materially from those projected in or implied by such forward-looking statements:

•the actions and decisions of judicial and regulatory authorities;

•prohibitions and other restrictions on our operations due to the terms of our agreements;

•prevailing federal, state and local governmental policies and regulatory actions, including those of the legislatures and other government actions of states in which we operate, the U.S. Congress, the FERC, the ~~North American Electric Reliability Corporation,~~NERC, the ~~Texas Reliability Entity, Inc.,~~TRE, the public utility commissions of states and locales in which we operate, CAISO, ERCOT, ISO-NE, MISO, NYISO, PJM, the RCT, the NRC, the EPA, the environmental regulatory bodies of states in which we operate, the ~~U.S. Mine Safety and Health Administration~~MSHA and the ~~U.S. Commodity Futures Trading Commission,~~CFTC, with respect to, among other things:


◦	~~allowed prices;~~


◦	~~industry, market and rate structure;~~


◦	~~purchased power and recovery of investments;~~


◦	~~operations of nuclear generation facilities;~~


◦	~~operations of fossil-fueled generation facilities;~~


◦	~~operations of mines;~~


◦	~~acquisition and disposal of assets and facilities;~~


◦	~~development, construction and operation of facilities;~~


◦	~~decommissioning costs;~~


◦	~~present or prospective wholesale and retail competition;~~


◦	~~changes in federal, state and local tax laws, rates and policies, including additional regulation, interpretations, amendments, or technical corrections to The Tax Cuts and Jobs Act of 2017;~~


◦	changes in and compliance with environmental and safety laws and policies, including National Ambient Air Quality Standards, the Cross-State Air Pollution Rule, the Mercury and Air Toxics Standard, regional haze program implementation and greenhouse gas and other climate change initiatives, and


◦	~~clearing over-the-counter derivatives through exchanges and posting of cash collateral therewith;~~

▪allowed prices;

▪industry, market and rate structure;

▪purchased power and recovery of investments;

▪operations of nuclear generation facilities;

▪operations of fossil-fueled generation facilities;

▪operations of mines;

▪acquisition and disposal of assets and facilities;

▪development, construction and operation of facilities;

▪decommissioning costs;

▪present or prospective wholesale and retail competition;

▪changes in federal, state and local tax laws, rates and policies, including additional regulation, interpretations, amendments, or technical corrections to The Tax Cuts and Jobs Act of 2017;

▪changes in and compliance with environmental and safety laws and policies, including the Coal Combustion Residuals Rule, National Ambient Air Quality Standards, the Cross-State Air Pollution Rule, the Mercury and Air Toxics Standard, regional haze program implementation and GHG and other climate change initiatives, and

▪clearing over-the-counter derivatives through exchanges and posting of cash collateral therewith;

•expectations regarding, or impacts of, environmental matters, including costs of compliance, availability and adequacy of emission credits, and the impact of ongoing proceedings and potential regulations or changes to current regulations, including those relating to climate change, air emissions, cooling water intake structures, coal combustion byproducts, and other laws and regulations that we are, or could become, subject to, which could increase our costs, result in an impairment of our assets, cause us to limit or terminate the operation of certain of our facilities, or otherwise have a negative financial effect;

•legal and administrative proceedings and settlements;

•general industry trends;

•economic conditions, including the impact of anany recession or economic downturn;

•pandemics (including COVID-19), weather conditions ~~including~~(including drought and limitations on access to ~~water,~~water), and other natural phenomena, and the financial and operational impacts related thereto;

•acts of sabotage, wars or terrorist or cybersecurity threats or activities;

•risk of contract performance claims by us or our counterparties, and risks of, or costs associated with, pursuing or defending such claims;

•our ability to collect trade receivables from ~~counterparties;~~counterparties in the amount or at the time expected, if at all;

•our ability to attract, retain and ~~retain profitable~~profitably serve customers;

•our ability to profitably serve our customers;

•restrictions on competitive retail ~~pricing;~~pricing or direct-selling businesses;

•adverse publicity associated with our retail products or direct selling businesses, including our ability to address the marketplace and regulators regarding our compliance with applicable laws;

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•changes in wholesale electricity prices or energy commodity prices, including the price of natural gas;

•changes in prices of transportation of natural gas, coal, fuel oil and other refined products;

•sufficiency of, access to, and costs associated with coal, fuel oil, and natural gas inventories and transportation and storage thereof;

•changes in the ability of vendors to provide or deliver commodities as needed;

•beliefs and assumptions about the benefits of state- or federal-based subsidies to our market competition, and the corresponding impacts on us, including if such subsidies are disproportionately available to our competitors;

•the effects of, or changes to, market design and the power and capacity procurement processes in the markets in which we operate;

•changes in market heat rates in the CAISO, ERCOT, ISO-NE, MISO, NYISO and PJM electricity markets;

•our ability to effectively hedge against unfavorable commodity prices, including the price of natural gas, market heat rates and interest rates;

•population growth or decline, or changes in market supply or demand and demographic patterns, particularly in ERCOT, MISO and PJM;

•our ability to mitigate forced outage risk, including managing risk associated with Capacity Performance in PJM and performance incentives in ISO-NE;

•efforts to identify opportunities to reduce congestion and improve busbar power prices;

•access to adequate transmission facilities to meet changing demands;

•changes in interest rates, commodity prices, rates of inflation or foreign exchange rates;

•changes in operating expenses, liquidity needs and capital expenditures;

•commercial bank market and capital market conditions and the potential impact of disruptions in U.S. and international credit markets;

•access to capital, the attractiveness of the cost and other terms of such capital and the success of financing and refinancing efforts, including availability of funds in capital markets;

•our ability to maintain prudent financial ~~leverage;~~leverage and achieve our capital allocation objectives;

•our ability to generate sufficient cash flow to make principal and interest payments in respect of, or refinance, our debt obligations;

•our expectation that we will continue to pay a comparable cash dividend on a quarterly basis;

•our ability to implement our growth strategy, including the completion and integration of mergers, acquisitions and/or joint venture activity and identification and completion of sales and divestitures activity;

•competition for new energy development and other business opportunities;

•inability of various counterparties to meet their obligations with respect to our financial instruments;

•counterparties' collateral demands and other factors affecting our liquidity position and financial condition;

•changes in technology (including large scale electricity storage) used by and services offered by us;

•changes in electricity transmission that allow additional power generation to compete with our generation assets;

•our ability to attract and retain qualified employees;

•significant changes in our relationship with our employees, including the availability of qualified personnel, and the potential adverse effects if labor disputes or grievances were to ~~occur;~~occur or changes in laws or regulations relating to independent contractor status;

•changes in assumptions used to estimate costs of providing employee benefits, including medical and dental benefits, pension and other postretirement employee benefits, and future funding requirements related thereto, including joint and several liability exposure under ERISA;

•hazards customary to the industry and the possibility that we may not have adequate insurance to cover losses resulting from such hazards;

•the impact of our obligations under the TRA;

•our ability to optimize our assets through targeted investment in cost-effective technology enhancements and operations performance initiatives;

•our ability to effectively and efficiently plan, prepare for and execute expected asset retirements and reclamation obligations and the impacts thereof;

•our ability to successfully complete the integration of businesses acquired by Vistra ~~Energy, including Dynegy, Crius and Ambit,~~ and our ability to successfully capture the full amount of projected operational and financial synergies relating to such ~~transactions;~~transactions, and

•actions by credit rating agencies.

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Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict them. In addition, we may be unable to assess the impact of any such event or condition or the extent to which any such event or condition, or combination of events or conditions, may cause results to differ materially from those contained in or implied by any forward-looking statement. As such, you should not unduly rely on such forward-looking statements.

INDUSTRY AND MARKET INFORMATION

Certain industry and market data and other statistical information used throughout this report are based on independent industry publications, government publications, reports by market research firms or other published independent sources, including certain data published by CAISO, ERCOT, ISO-NE, MISO, NYISO, PJM, the environmental regulatory bodies of states in which we operate and NYMEX. We did not commission any of these publications, reports or other sources. Some data is also based on good faith estimates, which are derived from our review of internal surveys, as well as the independent sources listed above. Industry publications, reports and other sources generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. While we believe that each of these studies, publications, reports and other sources is reliable, we have not independently investigated or verified the information contained or referred to therein and make no representation as to the accuracy or completeness of such information. Forecasts are particularly likely to be inaccurate, especially over long periods of time, and we do not know what assumptions were used in preparing such forecasts. Statements regarding industry and market data and other statistical information used throughout this report involve risks and uncertainties and are subject to change based on various factors.


~~Item 4.~~	~~CONTROLS AND PROCEDURES~~

Item 4.CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15a-15(e) of the Exchange Act) in effect at ~~the end of the current period included in this quarterly report on Form 10-Q.~~June 30, 2020. On the ~~Crius~~Ambit Acquisition Date, ~~Vistra Energy~~we completed the ~~Crius~~Ambit Transaction. Vistra ~~Energy~~ is currently in the process of integrating certain processes, technology and operations of ~~Crius,~~Ambit, and will continue to evaluate the impact of any related changes to the internal control over financial reporting. Based on the evaluation performed, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective. During the fiscal quarter covered by this quarterly report on Form 10-Q, other than the changes resulting from the ~~Crius~~Ambit Transaction, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(e) and 15a-15(e) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Furthermore, with respect to the fiscal quarter covered by this quarterly report on Form 10-Q, we have not experienced any material impact to our internal controls over financial reporting due to the COVID-19 pandemic. We are continually monitoring and assessing the design and operating effectiveness of our internal controls in light of the COVID-19 situation and the fact that the majority of our employees that do not work in our power generation facilities are working remotely.

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PART II. OTHER INFORMATION


~~Item 1.~~	~~LEGAL PROCEEDINGS~~

Item 1.LEGAL PROCEEDINGS

Reference is made to the discussion in Note 1312 to the Financial Statements regarding legal proceedings.


~~Item 1A.~~	~~RISK FACTORS~~

Item 1A.RISK FACTORS

There have been no material changes to ~~the~~our risk factors ~~discussed~~disclosed in ~~Part I, Item 1A.~~our 2019 Form 10-K, except as set forth below.

The outbreak of COVID-19, or the future outbreak of any other highly infectious or contagious diseases, could have a material and adverse effect on our business, financial condition, and results of operations.

The outbreak of the COVID-19 pandemic has adversely impacted economic activity and conditions worldwide, and we are responding to the outbreak by taking steps to mitigate the potential risks to us posed by its spread.We continue to examine the impacts of the pandemic on our workforce, liquidity, reliability, cybersecurity, customers, suppliers, along with other macroeconomic conditions and cannot currently predict whether COVID-19 will have a material impact on our results of operations, financial condition, and cash flows.

Because we are deemed a critical infrastructure provider that provides a critical service to our customers, we must keep our employees who operate our businesses safe and minimize unnecessary risk of exposure.We have updated and implemented our company-wide pandemic plan to address specific aspects of the COVID-19 pandemic.This plan guides our emergency response, business continuity, and the precautionary measures we are taking on behalf of employees and the public.We will continue to monitor developments affecting both our workforce and our customers, and we will take additional precautions that we determine are necessary in order to mitigate the impacts.In particular, we have taken extra precautions for our employees who work in the field and for employees who continue to work in our facilities including requiring, for both employees and contractors, social distancing where possible and requiring the use of appropriate personal protective equipment in certain circumstances.We have implemented work-from-home policies and other safety measures where appropriate, including, but not limited to, temperature testing at all of our locations for employees, contractors, and other essential visitors and closing our facilities to non-essential visitors.While our systems and operations remain vulnerable to cyber-attacks and other disruptions due in part to the fact that a portion of our workforce continues to work remotely, we have implemented physical and cyber-security measures to ensure that our systems remain functional in order to both serve our operational needs with a remote workforce and keep them running to ensure uninterrupted service to our customers.We will continue to review and modify our plans as conditions change.

Measures to control the spread of COVID-19, including restrictions on travel, public gatherings, and certain business operations, have affected the demand for the products and services of many businesses in the areas in which we operate and disrupted supply chains around the world.The full scope and extent of the impacts of COVID-19 on our operations are unknown at this time.However, COVID-19 or another pandemic could have material and adverse effects on our results of operations, financial condition and cash flows due to, among other factors, a protracted slowdown of broad sectors of the economy, changes in demand or supply for commodities, significant changes in legislation or regulatory policy to address the pandemic (including moratoriums or conditions or disconnections and limits or restrictions or late fees), reduced demand for electricity (particularly from commercial and industrial customers), increased late or uncollectible customer payments, and the inability of the Company's contractors, suppliers, and other business partners to fulfill their contractual obligations.

Despite our efforts to manage these impacts to the Company, their ultimate impact also depends on factors beyond our knowledge or control, including the duration and severity of this outbreak as well as third-party actions taken to contain its spread and mitigate its public health effects.To the extent COVID-19 adversely affects our business and financial results, it may also have the effect of hastening, heightening, or increasing the negative impacts of, many of the other risks described in this Risk Factors section and in our ~~annual report on~~2019 Form 10-K for the year ended December 31, 2018. Our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations.10-K.

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~~Item 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the quarter ended ~~September~~June 30, ~~2019.~~2020.


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Maximum Dollar Amount of Shares that may yet be Purchased under the Program (in millions)
April 1 - April 30, 2020	—	$	—	—	$	332
May 1 - May 31, 2020	—	$	—	—	$	332
June 1 - June 30, 2020	—	$	—	—	$	332
For the quarter ended June 30, 2020	—	$	—	—	$	332

Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Maximum Dollar Amount of Shares that may yet be Purchased under the Program (in millions)
July 1 - July 31, 2019 3,395,901
$ 22.16
3,395,901
$ 449
August 1 - August 31, 2019 2,889,120
$ 22.95
2,889,120
$ 383
September 1 - September 30, 2019 1,122,178
$ 26.16
1,122,178
$ 353
For the quarter ended September 30, 2019 7,407,199
$ 23.07
7,407,199
$ 353

In June 2018, we announced that the Board had authorized a share repurchase program under which up to $500 million of our outstanding common stock may be purchased, and in November 2018, we announced that the Board had authorized an incremental share repurchase program under which up to $1.250 billion of our outstanding stock may be purchased, resulting in an aggregate $1.750 billion share repurchase ~~program.~~program (Share Repurchase Program). The Share Repurchase Program has no set expiration date and will continue until complete or terminated by the Board. At June 30, 2020, $332 million was available for additional repurchases under the Share Repurchase Program. See Note 13 to the Financial Statements for more information concerning the Share Repurchase Program.

~~Shares~~Any purchases of shares of the Company's stock will be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, pursuant to plans complying with ~~Rule 10b5-1 and 10b-18 under~~ the Exchange Act ~~of 1934~~ or by other means in accordance with federal securities laws. The actual timing, number and value of shares repurchased under the ~~share repurchase program~~Share Repurchase Program or otherwise will be determined at our discretion and will depend on a number of factors, including our capital allocation priorities, the market price of our stock, general market and economic conditions, applicable legal requirements and compliance with the terms of our debt ~~agreements.~~agreements and the Tax Matters Agreement.

Item 3.DEFAULTS UPON SENIOR SECURITIES


~~Item 3.~~	~~DEFAULTS UPON SENIOR SECURITIES~~

None.

Item 4. MINE SAFETY DISCLOSURES


~~Item 4.~~	~~MINE SAFETY DISCLOSURES~~

Vistra ~~Energy~~ currently owns and operates, or is in the process of reclaiming, 12 surface lignite coal mines in Texas to provide fuel for its electricity generation facilities. Vistra ~~Energy~~ also owns or leases, and is in the process of reclaiming, two waste-to-energy surface facilities in Pennsylvania. These mining operations are regulated by the ~~U.S. Mine Safety and Health Administration (MSHA)~~MSHA under the Federal Mine Safety and Health Act of 1977, as amended (the Mine Act), as well as other federal and state regulatory agencies such as the RCT and Office of Surface Mining. The MSHA inspects U.S. mines, including ~~Vistra Energy's~~Vistra's mines, on a regular basis, and if it believes a violation of the Mine Act or any health or safety standard or other regulation has occurred, it may issue a citation or order, generally accompanied by a proposed fine or assessment. Such citations and orders can be contested and appealed, which often results in a reduction of the severity and amount of fines and assessments and sometimes results in dismissal. Disclosure of MSHA citations, orders and proposed assessments are provided in Exhibit 95.1 to this quarterly report on Form 10-Q.

Item 5.OTHER INFORMATION

None

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Item 6. EXHIBITS

(a) Exhibits filed or furnished as part of Part II are:


Exhibits	Previously Filed With File Number*	As Exhibit

(3(i))	Articles of Incorporation

3.1	001-38086 Form 8-K (filed May 4, 2020)	3.1	—	Restated Certificate of Incorporation of Vistra Energy Corp.

3.2	001-38086 Form 8-K (filed June 29, 2020)	3.1	—	Certificate of Amendment to Restated Certificate of Incorporation of Vistra Corp., effective July 2, 2020

(3(ii))	Bylaws

3.2	001-38086 Form 8-K (filed June 29, 2020)	3.2	—	Restated Bylaws of Vistra Corp., effective July 2, 2020

(4)	Instruments Defining the Rights of Security Holders, Including Indentures

4.1	001-38086 Form 8-K (filed July 16, 2020)	4.1	—	Fifth Amendment to Receivables Purchase Agreement, dated as of July 13, 2020, among TXU Energy Receivables Company LLC, as seller, TXU Energy Retail Company LLC, as servicer, Vistra Operations Company LLC, as performance guarantor, certain purchaser agents and purchasers named therein and Credit Agricole Corporate and Investment Bank, as administrator





(31)	Rule 13a-14(a) / 15d-14(a) Certifications

31.1	**		—	Certification of Curtis A. Morgan, principal executive officer of Vistra Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	**		—	Certification of David A. Campbell, principal financial officer of Vistra Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(32)	Section 1350 Certifications

32.1	***		—	Certification of Curtis A. Morgan, principal executive officer of Vistra Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	***		—	Certification of David A. Campbell, principal financial officer of Vistra Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(95)	Mine Safety Disclosures

95.1	**		—	Mine Safety Disclosures

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~~Item 5.~~Exhibits

~~OTHER INFORMATION~~

~~None~~

Previously Filed With File Number*

Exhibit


~~Item 6.~~			~~EXHIBITS~~

XBRL Data Files

~~(a)~~

~~Exhibits filed or furnished as part of Part II are:~~

Exhibits Previously Filed With File Number*
As
Exhibit

(4) Instruments Defining the Rights of Security Holders, Including Indentures

4.1 ** —
Tenth Supplemental Indenture to the 2023 Notes Indenture, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.2 ** —
Tenth Supplemental Indenture to the 2024 7.625% Notes Indenture, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.3 ** —
Sixth Supplemental Indenture to the 2025 Notes Indenture, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.4 ** —
Fourth Supplemental Indenture to the 2026 Notes Indenture, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.5 ** —
First Supplemental Indenture for the 5.500% Senior Notes due 2026, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.6 ** —
First Supplemental Indenture for the 5.625% Senior Notes due 2027, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.7 ** —
First Supplemental Indenture for the 5.000% Senior Notes due 2027, dated August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.8 ** —
Second Supplemental Indenture for 3.55% Senior Secured Notes due 2024 and 4.30% Senior Secured Notes due 2029, dated as of August 30, 2019, among the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee

4.9
001-38086
Form 8-K
(filed July 19, 2019)
4.1 —
Third Amendment to Purchase and Sale Agreement, dated as of July 15, 2019, among TXU Energy Retail Company LLC, Dynegy Energy Services, LLC, and Dynegy Energy Services (East), LLC, each as an originator, and TXU Energy Receivables Company LLC, as purchaser

4.10
001-38086
Form 8-K
(filed July 19, 2019)
4.2 —
Third Amendment to Receivables Purchase Agreement, dated as of July 15, 2019, among TXU Energy Receivables Company LLC, as seller, TXU Energy Retail Company LLC, as servicer, Vistra Operations Company LLC, as performance guarantor, certain purchaser agents and purchasers named therein and Credit Agricole Corporate and Investment Bank, as administrator

(10) Material Contracts

10.1
001-38086
Form 8-K
(filed September 19, 2019)
10.1 —
Termination of Stockholders' Agreement, dated September 18, 2019, by and among the Company and the Brookfield Stockholder

(31) Rule 13a-14(a) / 15d-14(a) Certifications

31.1 ** —
Certification of Curtis A. Morgan, principal executive officer of Vistra Energy Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 ** —
Certification of David A. Campbell, principal financial officer of Vistra Energy Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~Exhibits~~101.INS

Previously Filed With File Number***

~~Exhibit~~

—

~~(32)~~

~~Section 1350 Certifications~~

~~32.1~~

~~***~~

—

~~Certification of Curtis A. Morgan, principal executive officer of Vistra Energy Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~32.2~~

~~***~~

—

~~Certification of David A. Campbell, principal financial officer of Vistra Energy Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~(95)~~

~~Mine Safety Disclosures~~

~~95.1~~

—

~~Mine Safety Disclosures~~

~~XBRL Data Files~~

~~101.INS~~

—

The following financial information from Vistra ~~Energy~~ Corp.'s Quarterly Report on Form 10-Q for the ~~quarter~~period ended ~~September~~June 30, ~~2019~~2020 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Statements of ~~Consolidated Income,~~Operations, (ii) the Condensed Consolidated Statements of ~~Consolidated~~ Comprehensive Income, (iii) the Condensed Consolidated Statements of ~~Consolidated~~ Cash Flows, (iv) the Condensed Consolidated Balance Sheets and (v) the Notes to the Condensed Consolidated Financial ~~Statements.~~Statements

101.SCH

—

XBRL Taxonomy Extension Schema Document

101.CAL

—

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

—

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

—

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

—

XBRL Taxonomy Extension Presentation Linkbase Document

104

—

The Cover Page Interactive Data File does not appear in Exhibit 104 because its XBRL tags are embedded within the Inline XBRL ~~document.~~

document

____________________


*	~~Incorporated herein by reference~~


**	~~Filed herewith~~


~~***~~	~~Furnished herewith~~

* Incorporated herein by reference

** Filed herewith

*** Furnished herewith

**** Indicates a management contract or compensatory plan or arrangement.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Vistra Corp.

By:

~~Vistra Energy Corp.~~

~~By:~~

/s/ CHRISTY DOBRY

Name:

Christy Dobry

Title:

Vice President and Controller

(Principal Accounting Officer)

Date: August 5, 2020

~~Date:~~ ~~November 5, 2019~~



Delaware				36-4833255
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

6555 Sierra Drive	Irving,	Texas	75039	(214)	812-4600
(Address of Principal Executive Offices) (Zip Code)				(Registrant's telephone number, including area code)


		PAGE
GLOSSARY		ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of ~~Consolidated Income~~Operations — Three and ~~Nine~~ Six Months Ended ~~September~~June 30 , 2020 and 2019 ~~and 2018~~	1
	Condensed Consolidated Statements of ~~Consolidated~~ Comprehensive Income — Three and ~~Nine~~ Six Months Ended ~~September~~June 30 , 2020 and 2019 ~~and 2018~~	1
	Condensed Consolidated Statements of ~~Consolidated~~ Cash Flows — ~~Nine~~ Six Months Ended ~~September 30,~~June 3 0 , 2020 and 2019 ~~and 2018~~	2
	Condensed Consolidated Balance Sheets — ~~September~~June 30 ~~2019~~, 2020 and December 31, ~~2018~~2019	3
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	6647
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8870
Item 4.	Controls and Procedures	9375
PART II.	OTHER INFORMATION	9476
Item 1.	Legal Proceedings	9476
Item 1A.	Risk Factors	9476
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9477
Item 3.	Defaults Upon Senior Securities	9477
Item 4.	Mine Safety Disclosures	9577
Item 5.	Other Information	9577
Item 6.	Exhibits	9677
SIGNATURE		9880



~~Ambit~~2019 Form 10-K						Vistra's annual report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 28, 2020
Ambit						Ambit Holdings, LLC, and/or its subsidiaries (d/b/a Ambit), depending on context
ARO						asset retirement and mining reclamation obligation
CAA						Clean Air Act
CAISO						The California Independent System Operator
~~CCGT~~CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CCGT						combined cycle gas turbine
~~CME~~CFTC						U.S. Commodity Futures Trading Commission
CME						Chicago Mercantile Exchange
CO₂						carbon dioxide
CPUC						California Public Utilities Commission
Crius						Crius Energy Trust and/or its subsidiaries, depending on context
Dynegy						Dynegy Inc., and/or its subsidiaries, depending on context
Dynegy Energy Services						Dynegy Energy Services, LLC and Dynegy Energy Services (East), LLC ~~(d/~~(each d/b/a Dynegy, Better Buy Energy, Brighten Energy, Honor Energy and ~~Brighten Energy)~~True Fit Energy, respectively), indirect, wholly owned subsidiaries of Vistra, ~~Energy,~~ that are REPs in certain areas of MISO and PJM, respectively, and are engaged in the retail sale of electricity to residential and business customers.
EBITDA						earnings (net income) before interest expense, income taxes, depreciation and amortization
Effective Date						October 3, 2016, the date our predecessor completed its reorganization under Chapter 11 of the U.S. Bankruptcy Code
Emergence						emergence of our predecessor from reorganization under Chapter 11 of the U.S. Bankruptcy Code as subsidiaries of a newly formed company, Vistra, ~~Energy,~~ on the Effective Date
EPA						U.S. Environmental Protection Agency
ERCOT						Electric Reliability Council of Texas, Inc.
ESS						energy storage system
Exchange Act						Securities Exchange Act of 1934, as amended
FERC						U.S. Federal Energy Regulatory Commission
GAAP						generally accepted accounting principles
~~GWh~~GHG						~~gigawatt-hours~~greenhouse gas
GWh						gigawatt-hours
Homefield Energy						Illinois Power Marketing Company (d/b/a Homefield Energy), an indirect, wholly owned subsidiary of Vistra, ~~Energy,~~ a REP in certain areas of MISO that is engaged in the retail sale of electricity to municipal customers
ICE						~~IntercontinentalExchange~~Intercontinental Exchange
~~IRS~~IRC						Internal Revenue Code of 1986, as amended
IRS						U.S. Internal Revenue Service
ISO						~~Independent System Operator~~independent system operator
ISO-NE						~~Independent System Operator~~ISO New England Inc.
LIBOR						London Interbank Offered Rate, an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market
load						demand for electricity
LTSA						long-term service agreements for plant maintenance
Luminant						subsidiaries of Vistra ~~Energy~~ engaged in competitive market activities consisting of electricity generation and wholesale energy sales and purchases as well as commodity risk management


market heat rate						Heat rate is a measure of the efficiency of converting a fuel source to electricity. Market heat rate is the implied relationship between wholesale electricity prices and natural gas prices and is calculated by dividing the wholesale market price of electricity, which is based on the price offer of the marginal supplier (generally natural gas plants), by the market price of natural gas.
Merger						the merger of Dynegy with and into Vistra, ~~Energy,~~ with Vistra ~~Energy~~ as the surviving corporation
Merger Agreement						the Agreement and Plan of Merger, dated as of October 29, 2017, by and between Vistra ~~Energy~~ and Dynegy ~~as it may be amended or modified from time to time~~
Merger Date						April 9, 2018, the date Vistra ~~Energy~~ and Dynegy completed the transactions contemplated by the Merger Agreement
MISO						Midcontinent Independent System Operator, Inc.


MMBtu
~~MMBtu~~	million British thermal units
Moody's		Moody's Investors Service, Inc. (a credit rating agency)
MWMSHA		~~megawatts~~U.S. Mine Safety and Health Administration
~~MWh~~MW		megawatts
MWh		megawatt-hours
NELP		Northeast Energy, LP, a joint venture between Dynegy Northeast Generation GP, Inc. and Dynegy Northeast Associates LP, Inc., both indirect subsidiaries of Vistra, and certain subsidiaries of NextEra Energy, Inc. NELP indirectly owned Bellingham NEA facility and the Sayreville facility.
NELP Transaction		a transaction among Dynegy Northeast Generation GP, Inc., Dynegy Northeast Associates LP, Inc. and certain subsidiaries of NextEra Energy, Inc. wherein the indirect subsidiaries of Vistra redeemed their ownership interest in NELP partnership in exchange for 100% ownership interest in NJEA, the entity which owns the Sayreville facility.
NERC		North American Electric Reliability Corporation
NJEA		North Jersey Energy Associates, a Limited Partnership
NO_X		nitrogen oxide
NRC		U.S. Nuclear Regulatory Commission
~~NYMEX~~NYISO		New York Independent System Operator, Inc.
NYMEX		the New York Mercantile Exchange, a commodity derivatives exchange
~~NYISO~~OPEB		~~New York Independent System Operator~~
~~OPEB~~	postretirement employee benefits other than pensions
Parent		Vistra ~~Energy~~ Corp.
PJM		PJM Interconnection, LLC
Plan of Reorganization		Third Amended Joint Plan of Reorganization filed by the parent company of our predecessor in August 2016 and confirmed by the U.S. Bankruptcy Court for the District of Delaware in August 2016 solely with respect to our predecessor
PrefCo		Vistra Preferred Inc.
PrefCo Preferred Stock Sale		as part of the ~~Spin-Off,~~tax-free spin-off from Energy Future Holdings Corp., executed pursuant to the Plan of Reorganization on the Effective Date by our predecessor, the contribution of certain of the assets of our predecessor and its subsidiaries by a subsidiary of TEX Energy LLC to PrefCo in exchange for all of PrefCo's authorized preferred stock, consisting of 70,000 shares, par value $0.01 per share
Public Power		Public Power, LLC (d/b/a Public Power), an indirect, wholly owned subsidiary of Vistra, ~~Energy,~~ a REP in certain areas of PJM, NYISO, ISO-NE and MISO that is engaged in the retail sale of electricity to residential and business customers
PUCT		Public Utility Commission of Texas
REP		retail electric provider
RCT		Railroad Commission of Texas, which among other things, has oversight of lignite mining activity in Texas
RTO		regional transmission organization
S&P		Standard & Poor's Ratings (a credit rating agency)
SEC		U.S. Securities and Exchange Commission
Securities Act		Securities Act of 1933, as amended
SO₂		sulfur dioxide



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Tax Matters Agreement						Tax Matters Agreement, dated as of the Effective Date, by and among Energy Future Holdings Corp. (EFH Corp.), Energy Future Intermediate Holding Company LLC, EFIH Finance Inc. and EFH Merger Co. LLC
TCEH						Texas Competitive Electric Holdings Company LLC, a direct, wholly owned subsidiary of Energy Future Competitive Holdings Company LLC, and, prior to the Effective Date, the parent company of our predecessor, depending on context, that were engaged in electricity generation and wholesale and retail energy market activities, and whose major subsidiaries included Luminant and TXU Energy
TCEQ						Texas Commission on Environmental Quality
TRA						Tax ~~Receivable~~Receivables Agreement, containing certain rights (TRA Rights) to receive payments from Vistra ~~Energy~~ related to certain tax benefits, including ~~those it~~benefits realized as a result of certain transactions entered into at Emergence (see Note 8 to the Financial Statements)
TRE						Texas Reliability Entity, Inc., an independent organization that develops reliability standards for the ERCOT region and monitors and enforces compliance with NERC standards and monitors compliance with ERCOT protocols
TriEagle Energy						TriEagle Energy, LP (d/b/a TriEagle Energy, TriEagle Energy Services, Eagle Energy, Energy Rewards, Power House Energy and Viridian Energy), an indirect, wholly owned subsidiary of Vistra, ~~Energy,~~ a REP in certain areas of ERCOT and PJM that is engaged in the retail sale of electricity to residential and business customers
TWh						terawatt-hours
TXU Energy						TXU Energy Retail Company LLC (d/b/a TXU), an indirect, wholly owned subsidiary of Vistra ~~Energy~~ that is a REP in competitive areas of ERCOT and is engaged in the retail sale of electricity to residential and business customers
U.S.						United States of America
U.S. Gas & Electric						U.S. Gas and Electric, Inc. (d/b/a USG&E, Illinois Gas & Electric and ILG&E), an indirect, wholly owned subsidiary of Vistra, ~~Energy,~~ a REP in certain areas of PJM, NYISO, ISO-NE and MISO that is engaged in the retail sale of electricity to residential and business customers



Value Based Brands	Value Based Brands LLC (d/b/a 4Change, 4Change Energy and Express Energy), an indirect, wholly owned subsidiary of Vistra ~~Energy~~ that is a REP in competitive areas of ERCOT and is engaged in the retail sale of electricity to residential and business customers
Vistra ~~Energy~~		Vistra ~~Energy~~ Corp. and/or its subsidiaries, depending on ~~context~~context. Effective July 2, 2020, Vistra Energy Corp. changed its name to Vistra Corp.
Vistra Intermediate		Vistra Intermediate Company LLC, a direct, wholly owned subsidiary of Vistra ~~Energy~~
Vistra Operations		Vistra Operations Company LLC, an indirect, wholly owned subsidiary of Vistra ~~Energy~~ that is the issuer of certain series of notes (see Note 11 to the Financial Statements) and borrower under the Vistra Operations Credit Facilities
Vistra Operations Credit Facilities		Vistra Operations Company LLC's ~~$6.523~~$5.311 billion senior secured financing facilities (see Note 11 to the Financial Statements).



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating revenues (Note 5)	$	3,194		$	3,243		$	8,949		$	6,581
Fuel, purchased power costs and delivery fees	(1,687		)	(1,627		)	(4,287		)	(3,492		)
Operating costs	(397		)	(346		)	(1,153		)	(926		)
Depreciation and amortization	(424		)	(426		)	(1,213		)	(967		)
Selling, general and administrative expenses	(246		)	(194		)	(637		)	(711		)
Operating income	440			650			1,659			485
Other income (Note 19)	6			6			45			25
Other deductions (Note 19)	(4		)	(1		)	(9		)	(4		)
Interest expense and related charges (Note 19)	(224		)	(154		)	(720		)	(291		)
Impacts of Tax Receivable Agreement (Note 8)	(62		)	17			(26		)	(65		)
Equity in earnings of unconsolidated investment	3			7			13			11
Income before income taxes	159			525			962			161
Income tax expense (Note 7)	(45		)	(194		)	(270		)	(31		)
Net income	$	114		$	331		$	692		$	130
Net (income) loss attributable to noncontrolling interest	(1		)	(1		)	2			2
Net income attributable to Vistra Energy	$	113		$	330		$	694		$	132
Weighted average shares of common stock outstanding:
Basic	490,562,179			533,142,189			486,215,356			500,781,573
Diluted	493,670,295			540,972,802			490,226,743			508,128,988
Net income per weighted average share of common stock outstanding:
Basic	$	0.23		$	0.62		$	1.43		$	0.26
Diluted	$	0.23		$	0.61		$	1.42		$	0.26

VISTRA ENERGY CORP. CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) (Millions of Dollars)

	Nine Months Ended September 30,
	2019			2018

Cash flows — operating activities:
Net income	$	692		$	130
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation and amortization	1,394			1,070
Deferred income tax expense, net	254			29
Unrealized net (gain) loss from mark-to-market valuations of commodities	(625		)	207
Unrealized net (gain) loss from mark-to-market valuations of interest rate swaps	275			(123		)
Asset retirement obligation accretion expense	40			37
Impacts of Tax Receivable Agreement (Note 8)	26			65
Stock-based compensation	35			59
Other, net	12			64
Changes in operating assets and liabilities:
Margin deposits, net	129			(39		)
Accrued interest	15			(59		)
Accrued taxes	(31		)	(102		)
Accrued employee incentive	(53		)	(17		)
Other operating assets and liabilities	(340		)	(458		)
Cash provided by operating activities	1,823			863
Cash flows — financing activities:
Issuances of long-term debt (Note 11)	4,600			1,000
Repayments/repurchases of debt (Note 11)	(4,668		)	(2,902		)
Net borrowings under accounts receivable securitization program (Note 10)	261			350
Stock repurchase (Note 14)	(632		)	(414		)
Dividends paid to stockholders (Note 14)	(181		)	—
Debt tender offer and other financing fees (Note 11)	(170		)	(216		)
Other, net	6			10
Cash used in financing activities	(784		)	(2,172		)
Cash flows — investing activities:
Capital expenditures, including LTSA prepayments	(348		)	(209		)
Nuclear fuel purchases	(33		)	(66		)
Development and growth expenditures	(93		)	(28		)
Crius acquisition (net of cash acquired)	(374		)	—
Cash acquired in the Merger	—			445
Proceeds from sales of nuclear decommissioning trust fund securities (Note 19)	354			211
Investments in nuclear decommissioning trust fund securities (Note 19)	(370		)	(227		)
Proceeds from sale of environmental allowances	32			—
Purchases of environmental allowances	(169		)	(4		)
Other, net	22			11
Cash (used in) provided by investing activities	(979		)	133

Net change in cash, cash equivalents and restricted cash	60			(1,176		)
Cash, cash equivalents and restricted cash — beginning balance	693			2,046
Cash, cash equivalents and restricted cash — ending balance	$	753		$	870


VISTRA CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Millions of Dollars)
	Six Months Ended June 30,
	2020		2019
Cash flows — operating activities:
Net income	$	209	$	578
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	1,022		886
Deferred income tax expense, net	73		217

Impairment of long-lived assets (Note 18)	84		—
Loss on disposal of investment in NELP (Note 18)	29		—

Unrealized net gain from mark-to-market valuations of commodities	(123)		(703)
Unrealized net loss from mark-to-market valuations of interest rate swaps	192		199
Asset retirement obligation accretion expense	23		27
Impacts of Tax Receivable Agreement (Note 8)	14		(36)
Stock-based compensation	30		24
Other, net	55		73
Changes in operating assets and liabilities:
Margin deposits, net	58		112
Accrued interest	(6)		6
Accrued taxes	(59)		(67)
Accrued employee incentive	(70)		(72)
Other operating assets and liabilities	(222)		(362)
Cash provided by operating activities	1,309		882
Cash flows — investing activities:
Capital expenditures, including nuclear fuel purchases and LTSA prepayments	(588)		(303)
Proceeds from sales of nuclear decommissioning trust fund securities (Note 18)	224		292
Investments in nuclear decommissioning trust fund securities (Note 18)	(234)		(302)
Proceeds from sales of environmental allowances	88		31
Purchases of environmental allowances	(173)		(138)
Other, net	30		21
Cash used in investing activities	(653)		(399)
Cash flows — financing activities:
Issuances of long-term debt (Note 11)	—		4,600
Repayments/repurchases of debt (Note 11)	(756)		(4,137)
Net borrowings under accounts receivable securitization program (Note 10)	—		91
Borrowings under Revolving Credit Facility (Note 11)	925		—
Repayments under Revolving Credit Facility (Note 11)	(725)		—
Stock repurchase (Note 13)	—		(457)
Dividends paid to stockholders (Note 13)	(132)		(120)
Debt tender offer and other financing fees (Note 11)	(10)		(146)
Other, net	—		(1)
Cash used in financing activities	(698)		(170)
Net change in cash, cash equivalents and restricted cash	(42)		313
Cash, cash equivalents and restricted cash — beginning balance	475		693
Cash, cash equivalents and restricted cash — ending balance	$	433	$	1,006

VISTRA ENERGY CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)

	September 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	707	$	636
Restricted cash (Note 19)	46		57
Trade accounts receivable — net (Note 19)	1,419		1,087
Inventories (Note 19)	430		412
Commodity and other derivative contractual assets (Note 16)	999		730
Margin deposits related to commodity contracts	236		361
Prepaid expense and other current assets	291		152
Total current assets	4,128		3,435
Investments (Note 19)	1,451		1,250
Investment in unconsolidated subsidiary (Note 19)	123		131
Property, plant and equipment — net (Note 19)	14,075		14,612
Operating lease right-of-use assets (Note 12)	50		—
Goodwill (Note 6)	2,287		2,068
Identifiable intangible assets — net (Note 6)	2,595		2,493
Commodity and other derivative contractual assets (Note 16)	181		109
Accumulated deferred income taxes	1,155		1,336
Other noncurrent assets	398		590
Total assets	$	26,443	$	26,024
LIABILITIES AND EQUITY
Current liabilities:
Accounts receivable securitization program (Note 10)	$	600	$	339
Long-term debt due currently (Note 11)	220		191
Trade accounts payable	916		945
Commodity and other derivative contractual liabilities (Note 16)	1,364		1,376
Margin deposits related to commodity contracts	8		4
Accrued income taxes	18		10
Accrued taxes other than income	152		182
Accrued interest	88		77
Asset retirement obligations (Note 19)	167		156
Operating lease liabilities (Note 12)	12		—
Other current liabilities	370		345
Total current liabilities	3,915		3,625
Long-term debt, less amounts due currently (Note 11)	10,728		10,874
Operating lease liabilities (Note 12)	53		—
Commodity and other derivative contractual liabilities (Note 16)	426		270
Accumulated deferred income taxes	10		10
Tax Receivable Agreement obligation (Note 8)	443		420
Asset retirement obligations (Note 19)	2,157		2,217
Identifiable intangible liabilities — net (Note 6)	381		401
Other noncurrent liabilities and deferred credits (Note 19)	538		340
Total liabilities	18,651		18,157


VISTRA CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Millions of Dollars)
	June 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	382	$	300
Restricted cash (Note 18)	27		147
Trade accounts receivable — net (Note 18)	1,272		1,365

Inventories (Note 18)	541		469
Commodity and other derivative contractual assets (Note 15)	1,350		1,333
Margin deposits related to commodity contracts	161		202
Prepaid expense and other current assets	304		298
Total current assets	4,037		4,114
Restricted cash (Note 18)	24		28
Investments (Note 18)	1,552		1,537
Investment in unconsolidated subsidiary (Note 18)	—		124
Property, plant and equipment — net (Note 18)	13,881		13,914
Operating lease right-of-use assets	44		44

Goodwill (Note 6)	2,568		2,553
Identifiable intangible assets — net (Note 6)	2,532		2,748
Commodity and other derivative contractual assets (Note 15)	277		136
Accumulated deferred income taxes	994		1,066
Other noncurrent assets	398		352
Total assets	$	26,307	$	26,616
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings (Note 11)	$	550	$	350
Accounts receivable securitization program (Note 10)	450		450
Long-term debt due currently (Note 11)	337		277
Trade accounts payable	879		947
Commodity and other derivative contractual liabilities (Note 15)	1,546		1,529
Margin deposits related to commodity contracts	15		8
Accrued income taxes	10		1
Accrued taxes other than income	133		200
Accrued interest	144		151
Asset retirement obligations (Note 18)	138		141
Operating lease liabilities	11		14

Other current liabilities	418		506
Total current liabilities	4,631		4,574
Long-term debt, less amounts due currently (Note 11)	9,261		10,102
Operating lease liabilities	37		41

Commodity and other derivative contractual liabilities (Note 15)	599		396
Accumulated deferred income taxes	2		2
Tax Receivable Agreement obligation (Note 8)	468		455
Asset retirement obligations (Note 18)	2,314		2,097



	December 31, 2018			Adoption of New Lease Standard			January 1, 2019
Impact on condensed consolidated balance sheet:
Assets
Property, plant and equipment — net	$	14,612		$	15		$	14,627
Operating lease right-of-use assets	—			70			70
Prepaid expense and other current assets	152			(2		)	150
Accumulated deferred income taxes	1,336			1			1,337
Liabilities
Other current liabilities	345			(1		)	344
Operating lease liabilities	—			109			109
Identifiable intangible liabilities	401			(36		)	365
Other noncurrent liabilities and deferred credits	340			14			354
Equity
Retained deficit	(1,449		)	(2		)	(1,451		)


~~Item 1.~~	~~FINANCIAL STATEMENTS~~


1.	~~BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES~~


•	~~AROs were recorded in accordance with ASC 410,~~ ~~Asset Retirement and Environmental Obligations~~ ~~(Level 3).~~


3.	~~ACQUISITION AND DEVELOPMENT OF GENERATION FACILITIES~~



Crius Transaction Preliminary Purchase Price Allocation
Cash and cash equivalents	$	26
Net working capital	33
Accumulated deferred income taxes	36
Identifiable intangible assets	294
Goodwill	205
Other noncurrent assets and liabilities, net	4
Total assets acquired	598
Identifiable intangible liabilities	36
Long-term debt, including amounts due currently	140
Commodity and other derivative contractual assets and liabilities, net	22
Total liabilities assumed	198
Identifiable net assets acquired	$	400


Ambit Transaction Preliminary Purchase Price Allocation and Crius Transaction Final Purchase Price Allocation
	Ambit Transaction						Crius Transaction
	Updated Preliminary Purchase Price Allocation		Measurement Period Adjustments recorded through June 30, 2020		Final Purchase Price Allocation		Measurement Period Adjustments recorded through June 30, 2020
Cash and cash equivalents	$	49	$	—	$	26	$	—
Net working capital	35		6		(9)		(42)
Accumulated deferred income taxes	—		—		—		(36)
Identifiable intangible assets	230		(33)		317		23
Goodwill	243		29		243		38
Commodity and other derivative contractual assets	23		—		18		—
Other noncurrent assets	13		—		17		(3)
Total assets acquired	593		2		612		(20)
Identifiable intangible liabilities	—		—		2		(34)
Long-term debt, including amounts due currently	—		—		140		—
Commodity and other derivative contractual liabilities	28		—		40		—
Accumulated deferred income taxes	—		—		14		14
Other noncurrent liabilities and deferred credits	10		2		16		—
Total liabilities assumed	38		2		212		(20)
Identifiable net assets acquired	$	555	$	—	$	400	$	—



	Nine Months Ended September 30, 2019
Revenues	$	9,513
Net income (a)	$	629
Net income attributable to Vistra Energy	$	631
Net income attributable to Vistra Energy per weighted average share of common stock outstanding — basic	$	1.30
Net income attributable to Vistra Energy per weighted average share of common stock outstanding — diluted	$	1.29


~~(a)~~	~~Decrease in pro forma net income compared to consolidated net income is driven by unrealized losses on hedging activities of Crius and increased amortization.~~



Dynegy shares outstanding as of April 9, 2018 (in millions)	144.8
Exchange Ratio	0.652
Vistra Energy shares issued for Dynegy shares outstanding (in millions)	94.4
Opening price of Vistra Energy common stock on April 9, 2018	$	19.87
Purchase price for common stock	$	1,876
Fair value of equity component of tangible equity units	$	369
Fair value of outstanding stock compensation awards attributable to pre-combination service	$	26
Fair value of outstanding warrants	$	2
Total purchase price	$	2,273



Dynegy Merger Final Purchase Price Allocation
Cash and cash equivalents	$	445
Trade accounts receivables, inventories, prepaid expenses and other current assets	853
Property, plant and equipment	10,535
Accumulated deferred income taxes	518
Identifiable intangible assets	351
Goodwill	175
Other noncurrent assets	419
Total assets acquired	13,296
Trade accounts payable and other current liabilities	733
Commodity and other derivative contractual assets and liabilities, net	422
Asset retirement obligations, including amounts due currently	475
Long-term debt, including amounts due currently	8,919
Other noncurrent liabilities	469
Total liabilities assumed	11,018
Identifiable net assets acquired	2,278
Noncontrolling interest in subsidiary	5
Total purchase price	$	2,273



	Nine Months Ended September 30, 2018
Revenues	$	8,032
Net loss	$	(64	)
Net loss attributable to Vistra Energy	$	(61	)
Net loss attributable to Vistra Energy per weighted average share of common stock outstanding — basic	$	(0.12	)
Net loss attributable to Vistra Energy per weighted average share of common stock outstanding — diluted	$	(0.12	)



Name	Location (all in the state of Illinois)	Fuel Type	Net Generation Capacity (MW)	Number of Units	Dates Units To Be Taken Offline
Coffeen	Coffeen, IL	Coal	915	2	November 1, 2019
Duck Creek	Canton, IL	Coal	425	1	December 15, 2019
Havana	Havana, IL	Coal	434	1	November 1, 2019
Hennepin	Hennepin, IL	Coal	294	2	November 1, 2019
Edwards	Bartonville, IL	Coal	585	2	By the end of 2022
Total			2,653	8



Name	Location	Fuel Type	Net Generation Capacity (MW)	Ownership Interest	Date Units Taken Offline
Killen	Manchester, Ohio	Coal	204	33%	May 31, 2018
Stuart	Aberdeen, Ohio	Coal	679	39%	May 24, 2018
Total			883



Name	Location (all in the state of Texas)	Fuel Type	Installed Nameplate Generation Capacity (MW)	Number of Units	Date Units Taken Offline
Monticello	Titus County	Lignite/Coal	1,880	3	January 4, 2018
Sandow	Milam County	Lignite	1,137	2	January 11, 2018
Big Brown	Freestone County	Lignite/Coal	1,150	2	February 12, 2018
Total			4,167	7


	Three Months Ended September 30, 2019																				Three Months Ended June 30, 2020
	Retail		ERCOT			PJM			NY/NE		MISO			CAISO/Eliminations			Consolidated				Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		CAISO/Eliminations		Consolidated
Revenue from contracts with customers:																				Revenue from contracts with customers:
Retail energy charge in ERCOT	$	1,600	$	—		$	—		$	—	$	—		$	—		$	1,600		Retail energy charge in ERCOT	$	1,411	$	—	$	—	$	—	$	—	$	—	$	—	$	1,411
Retail energy charge in Northeast/Midwest	576		—			—			—		—			—			576			Retail energy charge in Northeast/Midwest	540		—		—		—		—		—		—		540

Wholesale generation revenue from ISO/RTO	—		990			137			79		116			46			1,368			Wholesale generation revenue from ISO/RTO	—		76		71		16		3		—		13		179
Capacity revenue	—		—			24			23		5			—			52
Capacity revenue from ISO/RTO																				Capacity revenue from ISO/RTO	—		—		15		10		4		—		—		29
Revenue from other wholesale contracts	—		110			187			84		48			1			430			Revenue from other wholesale contracts	—		63		137		26		54		—		21		301
Total revenue from contracts with customers	2,176		1,100			348			186		169			47			4,026			Total revenue from contracts with customers	1,951		139		223		52		61		—		34		2,460
Other revenues:																				Other revenues:
Intangible amortization	12		—			—			—		(4		)	—			8			Intangible amortization	(5)		—		—		—		(7)		—		—		(12)
Hedging and other revenues (a)	19		(813		)	(83		)	6		(17		)	48			(840		)	Hedging and other revenues (a)	10		62		(6)		(10)		(6)		—		11		61
Affiliate sales	—		444			178			22		49			(693		)	—			Affiliate sales	—		664		195		89		73		—		(1,021)		—
Total other revenues	31		(369		)	95			28		28			(645		)	(832		)	Total other revenues	5		726		189		79		60		—		(1,010)		49
Total revenues	$	2,207	$	731		$	443		$	214	$	197		$	(598	)	$	3,194		Total revenues	$	1,956	$	865	$	412	$	131	$	121	$	—	$	(976)	$	2,509


~~(a)~~	~~Includes $86 million of unrealized net losses from mark-to-market valuations of commodity positions. See Note 18 for unrealized net gains (losses) by segment.~~


~~(a)~~	~~Includes $28 million of unrealized net losses from mark-to-market valuations of commodity positions. See Note 18 for unrealized net gains (losses) by segment.~~


~~(a)~~	~~Includes $611 million of unrealized net gains from mark-to-market valuations of commodity positions. See Note 18 for unrealized net gains (losses) by segment.~~


	Nine Months Ended September 30, 2018																									Six Months Ended June 30, 2020
	Retail			ERCOT			PJM			NY/NE			MISO			Asset Closure			CAISO/Eliminations			Consolidated				Retail		ERCOT		PJM		NY/NE		MISO		Asset Closure		CAISO/Eliminations		Consolidated
Revenue from contracts with customers:																									Revenue from contracts with customers:
Retail energy charge in ERCOT	$	3,423		$	—		$	—		$	—		$	—		$	—		$	—		$	3,423		Retail energy charge in ERCOT	$	2,665	$	—	$	—	$	—	$	—	$	—	$	—	$	2,665
Retail energy charge in Northeast/Midwest	778			—			—			—			—			—			—			778			Retail energy charge in Northeast/Midwest	1,180		—		—		—		—		—		—		1,180
Wholesale generation revenue from ISO/RTO	—			775			869			362			436			52			95			2,589			Wholesale generation revenue from ISO/RTO	—		174		148		58		17		—		46		443
Capacity revenue	—			—			283			162			44			6			20			515
Capacity revenue from ISO/RTO																									Capacity revenue from ISO/RTO	—		—		30		35		9		—		—		74
Revenue from other wholesale contracts	—			175			18			14			16			(1		)	4			226			Revenue from other wholesale contracts	—		113		288		38		103		—		25		567
Total revenue from contracts with customers	4,201			950			1,170			538			496			57			119			7,531			Total revenue from contracts with customers	3,845		287		466		131		129		—		71		4,929
Other revenues:																									Other revenues:
Intangible amortization	(12		)	(1		)	—			(6		)	(12		)	—			—			(31		)	Intangible amortization	(8)		—		—		—		(11)		—		—		(19)
Hedging and other revenues (a)	50			(181		)	(436		)	(71		)	(256		)	(29		)	4			(919		)	Hedging and other revenues (a)	27		313		32		29		2		—		54		457
Affiliate sales	—			1,422			370			26			260			20			(2,098		)	—			Affiliate sales	—		1,131		562		257		143		—		(2,093)		—
Total other revenues	38			1,240			(66		)	(51		)	(8		)	(9		)	(2,094		)	(950		)	Total other revenues	19		1,444		594		286		134		—		(2,039)		438
Total revenues	$	4,239		$	2,190		$	1,104		$	487		$	488		$	48		$	(1,975	)	$	6,581		Total revenues	$	3,864	$	1,731	$	1,060	$	417	$	263	$	—	$	(1,968)	$	5,367


~~(a)~~	~~Includes $239 million of unrealized net losses from mark-to-market valuations of commodity positions. See Note 18 for unrealized net gains (losses) by segment.~~


	June 30, 2020		December 31, 2019
Trade accounts receivable from contracts with customers — net	$	1,197	$	1,246
Other trade accounts receivable — net	75		119
Total trade accounts receivable — net	$	1,272	$	1,365


~~(a)~~Balance at December 31, 2019	~~At September 30, 2019, includes $136 million of trade accounts receivable related to operations acquired~~$	2,553
Measurement period adjustments recorded in connection with the Ambit Transaction	29
Measurement period adjustments recorded in connection with the Crius ~~Transaction.~~

Transaction	(14)
6.Balance at June 30, 2020			~~GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS AND LIABILITIES~~$	2,568


	June 30, 2020										December 31, 2019
Identifiable Intangible Asset	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Retail customer relationship	$	2,087	$	1,302	$	785	$	2,078	$	1,151	$	927
Software and other technology-related assets	364		151		213		341		125		216
Retail and wholesale contracts	272		195		77		315		182		133
Contractual service agreements (a)	55		2		53		59		5		54
Other identifiable intangible assets (b)	45		17		28		40		15		25
Total identifiable intangible assets subject to amortization	$	2,823	$	1,667	1,156		$	2,833	$	1,478	1,355
Retail trade names (not subject to amortization)					1,374						1,391
Mineral interests (not currently subject to amortization)					2						2
Total identifiable intangible assets					$	2,532					$	2,748