VST - Earnings call transcript Q3 2021

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Operator

Good morning, and welcome to the Vistra Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Molly Sorg, Head of Investor Relations. ma’am. ahead, go Please

Molly Sorg

www.vistracorp.com. good Form conference Welcome broadcast call, Relations release. today’s website the and are our quarter copy and a live Vistra’s the XXXX Investor of at our of results which presentation, section available morning, you, on to website our everyone. investor third from Also XX-Q Thank is press being related

and are Jim today’s me call Curt Officer. Morgan, Executive Financial for President Burke, Officer; and Chief Joining Chief

executives present part senior address have questions as second additional We a the to of necessary. during few call today’s

Before based forward-looking the and forward-looking of we website only statements, on included our on listeners uncertainties cause assumptions we safe differ our this today’s actual assume non-GAAP will risks projected implied. today’s non-GAAP no results of update include market are release, and materially limitations use are the begin in that on press We our discussion contain review to statements statements forward-looking on will date. statements, to obligation and could or to Further, all presentation reasonable presentation certain of that certain as those subject from presentation, certain presentation industry statements. explain believe in I harbor and slide to included X the investor be to call financial data encourage the slides Such discussions financial risks which the Today’s and X measures. forward-looking the of measures.

the I now over Morgan discussion. release measures off provided reconciliations to such call in the GAAP presentation. to the to press will to in appendix kick measures, and are the Curt our most comparable directly turn the For investor

Curt Morgan

morning the to Molly, everyone you, on Thank and call. good

interest As in appreciate always, your Vistra. we

only our additional guidance but importantly, on best I’m as to While our initiating we for financial out quarter Not And capital results, XXXX also our and results our Q&A. as cover of to with leave to excited will have as we jiffy allocation sufficient which we customary you. third details be long-term third we are quarter laying will be most call. year-to-date our possible are share is we lot to plan, do today, discussing time a

to same a Board are So, where started. we are still from in proud hard the the greatly accelerated our effects let’s with believe company Storm standpoint, the immediately has significant beginning begun are a It’s from we but Uri. execute get storm. year of product recovered on of Uri the experienced review priorities, Winter how to business we and heels on a that our the to thorough strategic which have of prior I’m

summer business, discuss Texas more ongoing operations despite XXX-day in financial billion the EBITDA included $X.XXX third a these Uri of later. X weak bounce-back which delivered ERCOT’s Storm statements. from reports billion, the from the a realized adjusted strong Consistent in or Vistra slide third We positive impact excluding $X.XXX priorities of results, small with Winter impacts will resettlement detail from quarter our our where quarter,

achieved combination and $XXX approximately with the of balance Uri, than $X from the will credits materially the million together The retail more securitization have in slide. of the And later. initiatives $XXX to load Uri, target securitization we achieving on sight following in expect we adjusted already that fourth solid certain approximately The announced entities line operations clear to to in XX% realize a we all XXXX ongoing Vistra and million today of during execution such position self-help proceeds self-help As Uri, the offset quarter. our periods. from serving we both, these inclusion discuss bill of the the on of shown as of range really loss we has as billion without September guidance XXth, narrow a allocated future any are raise done charges EBITDA ERCOT’s the to impacting and of our self-help

you Vistra’s gas was loss third-party uncontrollable likely the predominantly system. by of Texas the recall, Intrastate has analysis Uri failure driven As shown internal that and

We our slide are adjusted half XXXX The the the of impact flow is also similarly next expected is reflected associated cash to guidance, flow revising be guidance in our Consequently, received is on cash ongoing slide. narrowing securitization growth operations reflected XXXX. first and the free cash which on before X. of securitization with in

XXXX as more cash Storm the cash On it to to range the approximately execution only. XXXX XX%, believe contracts and this is guidance due exclude also in customers turning flow illustrative retail in slide is of performance $X.XX guidance which with cash of securitization are XXXX NPV-positive impact power $X.XX the adjusted than potential than approximately billion, future the first by offer of $XX long-term its from an So, of securitization proceeds view in the ongoing is This included in We ratio range flow billion. XXXX EBITDA approximately of $X.XX cash the our credits proceeds with free of represents $XXX guidance flow $XXX before in-year billion historical a Vistra’s $X.XX illustrative conversion impact million, demonstrates credits X, ongoing to best adverse of Vistra operations free and also growth of long-dated Winter bill forecasting billion and related million bill way of generation guidance. of million negative XXXX. the the initiating which Uri earnings slide X, the higher business. the free think updated the offset adjusted in anticipated growth receipt from the financial in the the to to about Vistra’s today, operations of ranges, view ratio half conversion we securitization the before Notably,

than securitization fact, years. more bill offset the across In all likely will retail credits

opportunity which is Company XXXX hedged to we have remains momentum beyond, curves Looking The beyond in observed capture rising our in from the greater of view less robust. and XXXX, Vistra’s months. recent even an long-term power earnings affords

and we the seen as gap years. fact, several gas the have between move in view in up last similarly rate ERCOT in which heat market our have In converge, seen fundamental we a both and

conversion stronger steeply backwardated greater we billion projected our our $X the years the a add line resulted results market view several were EBITDA to This or investments. billion. our or optimize range, greater. that this within leaves we the billion especially stated of for in using years, $X growth in fact, in market generate In EBITDA has below next $X using curves us out with curves can Previously, consistent EBITDA position as

our long stock the supply our stakeholders forth meaningful and we of that as flow to cash capital way business at last intend slides. pipeline well optimal has to we fleet our four significant our generate business the dividend Slide the most long-term its as earn to repurchases meaningful shareholders. continue review least, maximize believe significant risk recent for through is our Uri to to our a basis, is to ahead, sustainable we our this an stakeholders practices; X priorities discount significant the years value and to that what a in the annual Zero as return outline in various especially to way intend shareholders majority cost-effective return for few key strategic our that the will following And to value the enhanced to responds, and unlock in this confident is via believe program, financial intend remain And which maintain accelerate capital our not been a fuel to a value. as best investments model, through we We Vistra we ability as cash integrated that and continue identified. management The I year-over-year, strengthened in will drive a business if value inherent amount such key in to sheet. remains financial but capital share our return amount of of balance to sets capital. a return next and flow fundamental our growth on We with stock we shareholders. strong on Also, substantial

capital priorities. growth plan an our billion capital to strategic while and reflects on simultaneously As its our $X.X -- we least long-term year-end common stockholders reflects reducing at set corporate plan forth of of the leverage long-term allocation these capital allocation Zero return XXXX anticipated Vistra Vistra’s slide, level our pipeline. next through accelerating

again, in five XXXX to is funds Specifically, long-term execute allocate our XX% amount a X% is fully through our $X if the power and the of we both repurchase conviction to And last undervaluation in approximately believe of funded equity more as capital we of We XXXX. for $X month. expect our stock. represents The significant year-end current recently similar cost-effective than our to repurchases of is we of by approved we XXXX repurchases towards $X Board announced which partially in $X preferred expect October, share of program billion program total we repurchase billion share by then from will billion billion a per our year years. billion a stock manner. earnings cap. what juxtaposed share business, This evidence management allocated back of market of share return the capital $X significant of those reallocate the responds, Board’s of This with we will shareholders issued

believe we you, prioritize stock long we continue our to undervalued. tell will me go. my And expect long way as is we so in share We will view, let have a to repurchases

a Rather expects Board year a $XXX reinforcing management growth the commitment appropriate our allocate per are We time, at also million to annual its it dividend. will, dividend. target growing than common toward our and subject identifying rate to dividend, for approval that meaningful paying

this potentially pool remaining fewer of will shares. our growth shares dividend $XXX and spread over outsized over more and shares retire we offer As time, million will on be more the

by price, stock current and to worth execute if year-end on result billion our an $X per share all the more our these dividend of repurchases to the were price, annualized example, cash share at recent average our attractive programs dividend grow an XX%. For by XXX% we yield annual repurchases XXXX. would stock share are in share At than of projected

As strong committed to balance are always, a also we sheet.

spending our high-Xs of We by base to this next flows and gigawatt of million using and to business. Vistra the year $X up on cost effectively retire expect cumulative lower from a growth $XXX and will a years highly of on develop five year next the frame than million projects pipeline during now projections priorities, expect in time $XXX contracted approximately funds preferred renewable-related per our renewable can is previous Per own the of Vistra the expectation significantly renewable combine business to basis that previous XXXX X only the with $XXX existing a with debt support third-party comments, period, And $X.X It approximately level battery of our with over over share used to other our end internal capital. important five-year to million by billion will mid to allocation note is project capital for corporate we especially financing another debt-to-EBITDA nearly be billion equity and Zero current cash we capital. These repurchases. estimate PPAs. that be

commensurate out. leverage the just be that will outlines long-term laid capital Slide for with similarly XX So, uses and situated allocation the businesses. plan the sources ratios I

million business, expect capital we battery gigawatt annually on by a to Vistra generating storage year-end $XXX this portfolio approximately growing to plan execute XXXX. adjusted our than and Zero we more renewable by $XXX be million X of EBITDA Importantly, able to will allocation

for will about our excited of being stakeholders that growth XXXX way allocation our multiple ultimately business a are Vistra times majority it accelerating these believe mindful result business as from levels storage at which and best value over should the $X.XX Zero and effectively of and to plan in of financial be XX EBITDA valued the strongly our our of value we while $XXX our leverage this multiple our battery overall return the capital pipeline, we projects. maximize free midpoint million to flow a a cost cash We renewables total billion higher of time. by expect long-term the the is base would Using of and

evaluating of reward cost here have path financial thorough, that will detail. our scale. call shareholder greatest risk I into that, will to the of now financial potential will account more As was to time, execution, paths believe I outlined results and over result over economies path Ultimately, scenarios the Jim? Burke taking turn effectiveness to Jim discuss in we unlock With the mentioned undertook the and earlier, strategic we be today we review the in value. multiple

Jim Burke

you, Curt. Thank

of financial As higher operations driven Period-over-period, that EBITDA quarter, $X.XXX the billion, strong results comparable quarter XXXX shown our financial on slide $XXX million East the our quarter margin of XX, of by cost Vistra and Sunset realization XXXX, very third the ongoing in third quarter realized results strong segment lower ended than third are Texas, primarily self-help and to goods adjusted XXXX. results the XXXX. initiatives quarter delivered a lower the collective were million in during from retail driven generation with The lower after our by $XXX sold energy segment than XXXX, results.

we on Since pricing slide all we We XXXX across September, markets, PJM on seen we’ve where across though the higher climbing in the Turning in gas the and XX. touch the our prices, slide. now two momentum seen and the we operate. to and is power beyond. markets spark prices rise to as all board This a operate, are have true commodity highlight we largest in spreads ERCOT where spreads wanted briefly spark markets dramatic for

As Vistra power that rule, price leading a higher overall of higher gas natural typically setting prices. is as general gas are units price power, units a marginal the benefits the environments from to company

us expect the years this will in outer less are we where benefit We hedged.

Vistra is As October respectively, for XXXX. XXst, hedged of ERCOT in PJM, XX% XX% now and and

with levels months fundamental more of as spreads couple York, New the taken CAISO point prices spark line our rising We similar view. in the and power and in of advantage are outright at MISO over New are in we increase of hedged last which relatively England, have

We NPV of range Uri-related now way is long-dated XXXX best XX, We to which about of adding expect credits to turning integrated detailed our volatility, in commodity working operations of continue the guidance. business. billion bill a to team think stable to of power the breakdown the position to financial relatively the pricing impact various provides illustrative positive $X.XX commercial will the impact year advantage earnings retail profile our to one contracts a back our of and billion, time. take believe more guidance $X.XX the of earn slide earnings long-term I’m the this over

anticipated addition to convert proceeds to Uri before be ongoing cash to of a securitization Similarly, continue EBITDA growth Vistra includes to that believe before of will cash such free guidance We operations for credits. growth. as our able flow majority adjusted its impacts, flow free adjusted other the receipt bill adjusted in the

on of guidance illustrative our normalized for balance Vistra our more supporting adjusted significant adjusted as removes the A also enables pipeline. return sheet Curt transformation free the with So, growth. of view strong these a conversion our and while a slide, Zero of EBITDA shown that discussed cash flow before the strong and percentage, capital fleet

core for briefly Before Vistra’s leverage to in address question of many know investment-grade is Foundationally, I we a strategic morning, following ratings wanted sheet strong target this to been pursuit you close our I of long-term balance a credit Uri. which has strategy.

ability of proved Uri quickly financial $X to during than response debt as leverage our add level billion strength Our the more supported to our storm. low in critical

slide high our current approximately X XX, same of on debt to adjusted to level the net a term our X.X range EBITDA the of will this in outlined leverage near level believe next five will is and we times As reach able that leverage the the Xs mid be leverage believe afford We us in the to range we in years. maintain financial to strength. over

is free ability we believe lower capital X a as years financing the generate in majority leverage project cash of By believe part portfolio, our risk few the still this a we the opportunity in investment-grade believe a though, will open we to believe least at I and contracted future closing, times now from relate said unlock as time. candidate stakeholders to to returning business, ratings out In we our future. corporate years lines we operator, can and see would recently, laid that We plan our of business Zero strong a you drops allocation accelerated as hope the also the to value credit capital prioritizing in we today, business the for maintaining balance over of significant for below With allocation financial be we in any that are our flow this we ahead. while Vistra the our and the of the value that, our for questions. of pursuing growth sheet will ready long-term

Operator

at Morgan Please comes first from go ahead. [Operator Byrd Stephen question Instructions] Stanley. Today’s

Stephen Byrd

approach. morning Good congratulations thoughtful Hey. allocation and out very laying on a capital

Vistra from approach? and in a in bit thinking million have et typically you little we might guess, So, elaborate of that to only of Zero I it’s other $XXX Could debt, mentioned light on project such challenging more $X the level more get confidence I gives that’s cash durations capital fairly total a I that? can your net fairly of on here. remarks, wanted sort mentioned, we perspective, years. of project high you the contract prepared thought of And needed, And from updated as be XX you leverage. in Vistra XX, guidance billion to flow, capital-wide here. achieve focus financing, you when net leverage your was that capital but it capital what a And cetera. just in level I

Curt Morgan

Yes.

to looking call tranche I’ll But then at in. So, and Jim, so, also upfront kick-start first of think, sort a jump -- what a I that I’ll feel take capital. shot free we’re at of

Stephen, leverage, cash flows. that’s with about will will that type way. determined but that like, leverage you then, project be the that it look exactly more equity put let’s leverage, And like, with tranche XX% it contracted We haven’t combine what when around

and the along types in of and other roughly putting cash X of the of look maintenance not at enough cash, our that the another missing assets, because we financing XX% the So, build-out to generate this like some in business flows think we’re things And is here through for the it’s million then, expense pursuing the the this project that’s along gigs of these in of I thing we maybe it’s to fairly bring basically leverage. project effort we’re capital tranche self-fund But and when with with $XXX consequence. low capital XXXX. off

comfortable further with this. the expect to up. a it we add acquiring whether feel I But would that, and than what So, or platform. raise have is to even can anything us it setting to just the even at adequate flows, looked how potentially line we’re Clearly, that the feel run to sight that we grow like we add? through be We that’s of pipeline, we sufficient have to through Jim, business. to want you Q, be that in capital, more and able projects we like than already cash would

Jim Burke

XX% from Curt, to The of from amplify intend less to you only cash then the debt. three gives the covered to contribution equity comes The create balance structured the the project we it million, is Vistra from or thing to I XX% form would then some flows contracted these put structure themselves. back of chance that well. flows. sources the assets to that the financing projects us cash PPAs parent Curt That $XXX and than mentioned, the

pipeline as last summer. than can faster we anticipated entity we grow announced self-sustaining that this so an and a think even we of this And entity when when

us the of sites gives to it use we more capital pipeline great have. of cost-effective take think advantage that given still way the I a and opportunities, so, And

Stephen Byrd

and makes thoughts helpful the out? us of give of latest XXXX, target on visibility lot you competition, of just growth, sort see by gigawatt could sense. of degree X then, sort playing a of year-end just you on how And of that sort That’s really your

Curt Morgan

Go Yes. Jim. ahead,

Jim Burke

do Sure. focus Stephen, we Texas, Solar, is primarily What Thanks, start, to California Its is with now we’ve where the strong Curt. that over. right have to here, we sites fleet. place got Illinois is on Coal focus try and now to control a which

as to include intend a Curt plants over not a M&A we type opportunities at But, an prospecting that this expectation of control we bunch other have sites for not of of this or coal convert. does an We does few don’t platform. mentioned, a include couple have --

the we’ve can on partnerships. think a side our got EPC batteries. based pipeline I and So, our that We’ve side partnerships set up good got on the we good very really solar and

a a really opportunities what also is next this advantage taking the not and And on so, England methodically point, Curt possibilities. addition in of are focus, quite just this of it’s front of But, other then, mentioned. we’ve five us I at in got focus this those I that, over years. our to there’s matter ISO is And heavy But, PJM, a bit. think that New

Curt Morgan

Yes. another can have megawatts. that X,XXX Stephen, Landing you know to probably Moss we site take up

We can site megawatts. Morro XXX in both a up have called Those California. are to be which Bay,

sites. have We of a number

then, in was pursued sites And are We some We’re the years for that in air of utilities to raised battery California ultimate thin one well. -- that the Omnibus in Energy with legislation out Omnibus storage and the Illinois. And three woven and largest Coal our have this of know then landholders, we Texas. Solar into bill. of the that Legislation there. market especially quite that at course, coal obviously we’re We partnering plants old of the in

very think we And the think many So, where areas access down have sites road. well. the were down utilize came And already I up that that’s idea the proven I being already transmission we to in other with assets were opportunities have work or an shut retired. of to

Stephen Byrd

site Illinois, It’s any in of a quite clearly the California, high. from great point. value like I places those sites mean

thanks much for color. appreciate So, it. I so the

Curt Morgan

Yes. Thank you.

Operator

ahead. next question Please with comes Shahriar And from Pourreza Guggenheim. our today go

Shahriar Pourreza

you you’re just Curt, for shake under ‘XX. EBITDA more dynamic? Is current draw as on pretty open your would question out indicate directionally, view also can we the sparks where indicated in still. expansion you And fundamental two-part a Just closer?

Curt Morgan

Yes.

For ‘XX talking now, you’re about?

Shahriar Pourreza

Yes, please. Yes, yes, perfect.

Curt Morgan

Yes.

level, what more the time a amount backwardation normalized fair of compressed. I’d there’s from curve of where actually come call sparks ‘XX to look, a in going but back we had ‘XX. to period were still So, a They’ve

suggest curves one the XXXX. that point would in still view converged fundamental our and view -- two that to think there’s our is view view of room to and curves, move have with our market thing significantly, those relative fundamental seeing think the levels years, that, I the we are now my even five -- you it billion. we’re were next made EBITDA that billion curve, curves. over I the in it seeing below to $X remarks. Shahriar, prior good But I the plus when -- But, fundamental $X at the marked to And

has converged significantly. that So,

In what terms the call there’s spreads, occur can of on spark I’ll ‘XX that some normalization probably further in sparks.

there of that about some sparks maybe pretty ‘XX to yes, to gap movement. look seen $X we difference. they’re about, if take so, -- expect that And we’ve be But, could in a sparks, going at versus move you I’m say, sparks. And still But, to strong that ‘XX would a close.

And some view that. our so, there upward shows is fundamental mobility and

of minus in open dollars, but that this, ‘XX always this weather. couple hundred either using want And way, can to or EBITDA say on very that we a we’re when being plus of the be number. say clear range terms to depending that’s on time level that, million I position directionally, go because a illustrative of ‘XX, within I In an EBITDA similar

view when team with that where downside, curves in take ‘XX greater are is a the we versus where when our commercial and the -- but within just ‘XX. of so, the curves we of our I are of the directionally, would outcomes, upside able distribution And fundamental probability bounds knowing where say, are for the view probably look of And is, well -- in advantage or we’re at point knowing of at better. are, to

XXXX. about I good So, feel

and have to we I out that range, and and go think value. directionally, capture execute it’s in now that

Shahriar Pourreza

you And at pitching reality that. least your so At what starting Right. to good a as is Any versus which what a for been then, the billion minimum, a of in something additional is it’s you’ve to while, value, sustainable is view free yield? $X align, Curt, the on see, flow of view stock guidance see on more buybacks your the cash here obviously, predicated, right?

Curt Morgan

Well, hope that man, much I execution -- down digits. going is wish more to would see, into But the yes, ball. the with a I is crystal that’s especially double plan -- our and what look, in I that’s allocation this I something capital with mid-teens had and think low

business, batteries heat risk. come years, realize the But, be in to I that we’re XX and XX right is the beginning efficient assets gas going invested we’ve rate, I fossil there that I significantly, dispatchable and to you for also as part think we when going because to And really once I of as market certainly know that a renewables, forward, that resources clean to understand major fuel, February, was to do in event to have and is believe be next the return very kind have that of big of any that the and well going low green of is is that that. combination risk to warrant how is a then, people into this plants, battery Clearly, mix expect you’re for need going purposes. to mainly -- and -- going those. are the pay a that going I to storage have piece need that of I going resources reliability The we exposed anticipated we’re risk think show business, execute, reduced we some would to think risk to I our and able down. premium of

contract also is we of got That we business with. can expect And our that’s retail much that our up business people company very well. consistent think I and think this renewable lining about with. then, as continue large margins, significant we’ve that what and that and to battery don’t I think has

the that feel that premium, execute, believe we of terminal If both, up. which see in you we question, but price. long premium and then also here we risk We we’re perceived we And value lower risk that expect have function much like cash in a down. a a yield, a the we for stock which to a that’s turn, free stronger commensurately, as a means is ought are So, period business the flow we higher we company risk lined would think should can of model, time. see closing, that come I know,

Shahriar Pourreza

lastly sort And the any challenges it. of me, coal or supply are fleet? for Sunset just Got with having you Right. material then,

Curt Morgan

we are. Yes,

We are.

segment, take chunk had than challenges big you though, under you constraints, we’ve an I take had were little a you but securitization, why. that I’ll Sunset notice that than the constraint If of tell outcome anything not of coal were more our What XXXX’s coal year at it some a And off, is you the more also that, back loss about. bit mainly that came and is just call, we’ve would you’ll opportunity million else. we outages $XXX it, this and half

constraints. of between have because inventory ‘XX. saying ‘XX. supply you ‘XX building And amount of curves are in ‘XX and were price optimize if of prioritizing going finite been have to We QX coal of that more it’s the the the have than for QX in we We of run much a of coal is it, economic winter, to because QX it think to QX

little that’s most a so what where ‘XX be the of are intend there run of telling to and are we the and we opted us because QX it’s to coal conserve economic, preserve have to ‘XX in we of that’s to do. QX amount curves bit have for price We less that going

concerned winter. The in sure that I’m for a that still making the system about grid is bit Texas I’ll entire tell the you gas little is particular including this weatherized, other thing

cautious. very so, And we to be want

to commodity that length we know, you then, energy want We’re make sure any hiccups. broader going is into have and more carrying of complex, that, go we quite to as And just that the don’t because volatile.

because a very we’re make of so, ‘XX. in of and our of conservative And into QX can that, taking that very, means to conserve that approach some run coal to trying going we QX, sure

Operator

at ahead. Julien And comes Dumoulin-Smith our next of go today Bank question from Please America.

Julien Dumoulin-Smith

done, team. start. questions, follow Hey. of I easy Good up, just couple morning, to Well wanted Listen, if I a can truly.

quickly, on mechanisms to execute just a here, a separately, buy about any here? ‘XX And your First off, tender the related lot other then, Obviously, to -- buyback I’ll it to terms in itself throw at the thoughts EBITDA, hand. than versus of how X, but to thinking I levels? are better about said ask that in way. relative I know ‘XX, I that mean, inbound there can if some what it’s you out questions you ‘XX better here. than about you

Curt Morgan

Go want at around that’s do buybacks and at to ahead. and you one, if Jim, a to to you take what looking add the first can around then and then fine, we’re it. buyback, -- the stab we take can I want second one

Jim Burke

morning, the Thanks Sure. Julien. for questions. Good

of So, on -- are alternatives. we a buyback, we the at looking number have

it very program the when We with we’ve you $X we’re is that have the not on how settled billion we’ll not to outstanding, to we’re of quarter purchased. we’ve what’s for the the aggressive the be we’ll but through know, end We meaningful by but a to ‘XX. call, ‘XX effectuated But, report shares method as going buy, to number to order of coming ‘XX. through buy, able be out buyback only hopefully implement the program going of don’t we’re going earnings telegraph that percentage, this each use, to of in intend how

think of ‘XX. able figure open team about come to rise. have view point job that and the Curt, ‘XX, seen as to I or out create continue position question, the expectation. large I we other curves trying and work to our in very in think looking obviously positions the mentioned, to has And to think a done to put ‘XX manage opportunity be a nice on commercial relative under, the when an at slightly overperformance The you we’ve And we as to can

said, as lower. much was ‘XX Curt think, I

year. curves even saw for particularly the that charts in gap with in the time considerably. we It That past, You this closed. last forward fully in that slides that see And the then, spark you closed spreads. presented hasn’t has our

room we with good So, ‘XX, and large move, think for has a very There’s still position. have the but still of curves still ‘XX to chance room. a in we being there’s open line

business these think there’s And fact a range rate billion around basis. about on going is, we’ve a outcomes. is to I talked a So, $X-plus the run be that

a We segment. competitive are in

variation position view some volatility. have manner the large work wholesale that a we can We around countercyclical some by benefited in We’re almost we still as to times. a these have that having at as But, the can position shown as markets retail something capture. it --

more looking So, backwardation some would but to be, expect to that given to we a have ‘XX. in it there’s relative I at ways where is the think line we still go for still ‘XX,

Julien Dumoulin-Smith

Got it. Okay.

Is little or a is bit it So, below…? it ways uncertainty go. still to

Jim Burke

way -- it Curt. ahead, the Julien, think, has it, describe would I I go Well,

Curt Morgan

Go No, Jim. ahead, no. no,

Sorry.

Jim Burke

market on if say, has talk would we prompt that this view to towards that have -- approach a consistently the point -- shown a and we struggle business the I we No. you get of you’re because year. curves begin as is about have simply the that

you and We all business. our than it think look up, we going just put end run at and run be positions if for not curves makes think that in to So, build, on how it given do mean, where on ‘XX. in, that characteristics at in Q our I likely today, cetera. sense it’s it we where curves the supply-demand et based we say, would that’s just to new comes all lower lock where is look you math. and That’s business

us. and at previous happened so, And chance not -- to ‘XX -- over in a curves that we just moment. the right with It’s at we the that We’ve has when good not where happened be spot And for line basis, in that’s we look does that but feel And in concern it’s very before. ‘XX, ‘XX. we don’t been it the years. are

it we ‘XX. again so, anticipate in happen likely would And

Curt Morgan

Yes.

result. evasive and when up, expect backwardated, So, this one to here be just winters and and fundamental -- of we’re that current next think out ‘XX. still our from curves within something the Julien, time view why the We brought summer, room a those trying -- to -- up the fundamental you’re In some move. the that is the when It’s the our and view. below the I that at two you get summer begin far and the tend result. -- Marking that summer you there’s In Marketing different say seen around well to things were this converged, -- to are news come think you are view mark. all. in you still that’s we curves And and have and curves year but that curves range before. those good past, give not the the now, move the those just fundamental something $X out billion the the the to into every to we we’ve this are a is of for still curve will give ‘XX past, will

think to ‘XX. is ‘XX distribution. about distribution on there’s around the like midpoint clearly, within illustrative I But So, basis EBITDA that a

paid chance do. around ‘XX. And down so, come That’s ripe are that we the can we that’s to think to in get there’s and what team, curves a we ‘XX where good being what do. when for and That’s our to execution we going are come ready levels

terms think we to being ‘XX. and a distance it, ‘XX pretty $X We feel will it clearly ‘XX, even hitting for actually have about $X into So, spitting land good of we’re plus billion of going in it. going be of we I Where good ‘XX. we within about billion. and feel could being exceed And chance good plus it

and It’s So, execution that distribution about getting opportunities. now I think is favorable.

Julien Dumoulin-Smith

team. Wow! Thank you,

and certainly an not easy evasive for much So here at question all.

more capital. talked a you you to the this with that’s here? I’m that if million by make side then. clear, know adjusted sources $XXX as be $XXX the to and get to Vistra segment-specific project ask would correctly. On just of an all well. it’s me would paid of to I be let invested sounds like needs about coming. you How question capturing And that funded this want other But equation, thinking slightly much EBITDA. I none of It various it CapEx outcome -- million is at least are corporate get detailed to update be that this Now, just prospectively Zero sure holistically

Curt Morgan

Yes.

would equity as have in that. $X.X have of putting for invest. into right, the capital capital I do the we to putting amount although projects would think But I billion, of And right yes, that I range that we well to in some have have would we’re to billion $X.X $X think on obviously -- total you remember if are it’s we billion $X it’s value that invested. billion market. to in some in be be low, obviously plans we would that how the relatively is putting that And

Julien Dumoulin-Smith

without your just In existing the right, is assets, specific? too contribution, storage principally, being

Curt Morgan

batteries it, batteries it’s X what it’s -- in California, it’s mentioned sites Texas. I Landing, is would something like It’s Morro think I it’s or Bay, site yes, Illinois have Well, it, that. in Oakland that Moss in our

have Texas. X that’s XXX-megawatt, We battery in one hour on coming

We storage have picture the of course, And a solar. already predominantly that’s battery But what a XX-megawatt on. looks we’re like.

wind we side, found be On economic. the renewable to have

It’s projects. person expect that’s But that. of just an are to us primary I and -- wind. opportunity wind we so offshore those not the not afraid we’re But, for that. be We’re don’t -- yet, found that haven’t the

lot Illinois. a both solar, in course, there’s and Of of Texas in

Operator

go today Fleishman question at Steve next our comes Please And from ahead. Wolfe Research.

Steve Fleishman

but sounds some, just are yesterday like want it discussed outlook? those So, those different, in NRG just I you’re -- the How coal costs kind cetera. the ancillary to treatment, of asset is just issues that Texas feel like also okay but call, your clarify And and et you to your embedded do want obviously, position -- guess on you issues.

Curt Morgan

of about million in in well, put coal so constraints. you -- this. Jim, just let’s And can this the way, of it -- $XX is Yes. jump half ‘XX But after effect over

our captured we’ve updated so, guidance, that, just in captured Steve. that. so, we’ve and -- And That’s

I inventory for decided QX QX. think mentioned, ready be more we’ve for because to the build compelling I to are economics

QX in this any -- ‘XX. constraint have built already is created going into favor we we of of that so, ‘XX And of ‘XX Everything guidance. our QX constraint into in have

to more nothing there’s talk there. So, about

‘XX. of given expect, of to ‘XX QX us what run want favor we’re we allow ‘XX We of QX to in in doing will where in QX actually of

PRB. coming And Grove on its are the too the not course, two in that A of from mines PJM of Ohio are rails coal. the of them on then, and out lot PRB. Oak these I this think of constraints of our you and own some plants, PRB know

just -- plants. a our other many lot those have don’t have from there. limitations we coming And the don’t EBITDA we like So, Illinois then, of of

for of months aren’t got constraints the came way that ago more we as the thing I so, couple this. were And big is think concerned our about to me mean, team than us. front. this in other a And just I out

been their and can they’re that, doing leadership folks. it’s trains them And they with They getting for been that this important can. get winter managing I’ve toward we’ve in team in more know and best Texas. the about we we’ve to working Northern so, so talked the Burlington

loss really So all in to all, QX QX, million of I for And our all think ranges. have kind also inventory what we more of of a, of ‘XX. $XX that’s opportunity took in call, we’re going but both baked a in I’d guidance

Steve Fleishman

Okay…

Jim Burke

ahead Go the on ancillaries.

Curt Morgan

us? hear you Can Steve? ancillaries, about ask you Did

Steve Fleishman

to, had a yes. Yes. issue part of was big That the they

Curt Morgan

Yes.

effects much our want the is numbers. And this. you add -- We -- that, to ancillaries specifics? Jim, have have to that. ours to baked you into also do Jim, any we That’s to add effect ancillary, lower. of want But our just might

Jim Burke

Yes, do. our into costs It’s baked to retailer We ancillary we the any view similar plan. face. costs the Sure. other that would

price, your it it and customers. you’ve the to work to reflect to with got ultimately got You’ve

plan ‘XX of having have, as effect for well, integrated plan. and effect position, We the you our the have and mentioned, we do But, slowly as reflected some Steve, a built assets that course, is our retail And different in into so. beyond. on generation

Steve Fleishman

on the looking just going in with at project those sites merchants. how deal can’t of are the Texas you to But as you -- were that. finance Great. then, obviously, plan, And terms historically, developing you renewables

with PPAs do strategy to What’s your going you are renewals? parties? Vistra Texas with retail the or third So, on

Curt Morgan

right end They’re one it for sell retail. group retail will of be can to wholesale then could retail lives looking call well We that we be boat, we’re supply. Yes. retail have as between own arm. book Steve. the as that it’s supply think will future it -- to that’s retailers as our now, third-party this it, contracting most our at where sort business. back but but manages And that’s really in retail manages entity buy supply business. is It and the our I And different of well retail the -- with supply an up both, actually our with the they that other retailers, then and they and back-to-back they ultimately as our But, our

be where And that’s contracts up. set so, will those

Operator

Chopra with Evercore And next ISI. today our from question go Durgesh comes Please ahead.

Durgesh Chopra

I follow-up. have a clarification a and

platform. Just $XXX Vistra from the EBITDA Zero the million prospective

about clear, Am right you what thinking what’s no? Just Vistra’s or right? you’re gross choose. the to the ends financing for up the on depending or $XXX lower share is thinking that diluting financing that be structured $XXX million, about as equity those way That I million is to than number projects, going be

Curt Morgan

way. just let this are, You it put but me

XXX% common this the own will equity We of of entity.

capital just will looking at, we of decided but it. what XXX% be equity will of tranche own that like, that we’re exactly very haven’t the we business. look That So, clear it to about common

and to sort sell that. partner out But, could so, And can ownership tranches you of the equity that looking what kind with of be. we’re not figure of

ways want I and what Jim, other we to to control. our maintain add? do are think anything there do you want to

Jim Burke

you’re is way the EBITDA about thinking think I is mentioned Durgesh, Yes. Curt an it correct. number. What

interest we of other expense that and doing expect would that because we the charges we’re be capital financing would project would And sort so, to have. third-party going we any some have

more cost-effective project we take own. on. So, some our then time, have than we’d project that be the of capital, the debt to that some level we over debt, And have of believe amortization which we would ongoing cost

and use more and standpoint, it. to have get a We EBITDA number. not grown portfolio assets, to equity be building question. meant is million five-year rapidly so cash goal It from we’re getting Curt million ESG-friendly our flow business $XXX I that long-dated, free that’s And XXX% can capital is your do long-lived control terminal cost-effective asset basis. that’s that’s if nature of think of the to was mentioned, a to $XXX very So, maintain a a number to an on value third-party as capital,

to So, more be effective of sheet. out we but for cost that will balance pay it EBITDA that’s think there that, some on doing distributions all than

Durgesh Chopra

I and to XXX% going be. That’s super it. really be you by will was helpful. owned it in whether like Yes, it’s sounds interested Got

Okay.

Second in terms of question, that number. $X-plus-billion EBITDA

degradation there up things base coal you give platform? zero You to kind a billion number. as Zero you to EBITDA that Vistra that $X the gigawatt X platform to ramp retirements, mentioned amongst other get that of on opportunity Is

Curt Morgan

and Well, our let’s that there assets some little say, what value to Jim, you have But these break there’s fleet, EBITDA if right, from these you impact of do and -- our you go. you can or from is zero out, isolate yes, them closing retiring okay, if we break things coal and have assets coming will yes, the written say from down on the of these degradation very been slight that. in books. I

economically lot that that, not in What not and an invest than just certainly offset they’re by platform. we over we effect a is EBITDA more So, not seeing is basis. as are contributing Zero time Vistra the on though

time grow So, to actually we EBITDA ultimately invest. able over as we’re

do increasing we that we see EBITDA profile out. so, an And project when

didn’t projects go do I it, are they mean plants, Jim, do, on to the if more effect isolate other meaning that. that you I’m offset retired have sorry, than while So, a on coming negative they the ahead. EBITDA, interrupt. coal

Jim Burke

built in are obviously is that down more of come point this new that time. go-forward growing not that contribution well. two X,XXX nearly There’s No. have to -- and long-lived high-margin the Vistra put overcome it’s a that’s through megawatts plan, Zero whole that profile with than have but transitioning assets something of to we Texas to so of not X,XXX EBITDA Well, Curt, covered do through on material we is built be has the able the retirements. fleet our large into we dates, but that time it retirement have EBITDA nearly you anticipated slated facilities and we horizon,

Durgesh Chopra

counting it. EBITDA $X-plus-billion on the… Got Thanks, it prospectively, in right? like that Net-net, Like you’re guys. sounds higher biased

Curt Morgan

Correct.

Durgesh Chopra

guys. you, Thank Okay.

Curt Morgan

Yes.

Operator

to like any the turn session. I’d the closing conference Morgan for over to back this Curt and Ladies concludes gentlemen, remarks. question-and-answer

Curt Morgan

what for interest we’ve proud in our event. of your again I’m this done everybody February company. for after Thanks

in really I Thank track. think, and the forward near in we’re back you to to future. on ever interest look we the feel appreciate Vistra, strong like as I and we’re as you. speaking

Operator

concludes this you all gentlemen, and for call. ladies presentation. today’s attending And We thank today’s conference

You your disconnect day. wonderful may a now have lines, and

Vistra (VST) 5 Nov 212021 Q3 Earnings call transcript