Vistra Reports Full-Year 2023 Results, Announces Expected Closing of Energy Harbor Transaction On March 1, 2024
Earnings Release Highlights
- GAAP full-year 2023 Net Income of
$1,492 million and Cash Flow from Operations of$5,453 million . - Net Income from Ongoing Operations1 of
$1,498 million , Ongoing Operations Adjusted EBITDA1 of$4,140 million ,$440 million higher than the midpoint of the original guidance range announced inNov. 2022 , and Ongoing Operations Adjusted FCFbG1 of$2,491 million , exceeding the midpoint of the original guidance by$441 million . - Announced
Federal Energy Regulatory Commission ("FERC ") approval of the pendingEnergy Harbor Corp. ("Energy Harbor") acquisition, with closing expected to occur onMarch 1, 2024 . - Repurchased approximately 98% of the outstanding beneficial interests in the rights to receive payments under the Tax Receivable Agreement ("TRA"), increasing expected free cash flow over the next several years and simplifying the company's capital structure.
- Board authorized an additional
$1.5 billion of share repurchases, which is expected to be utilized by year-end 2025.
"I want to thank our
Burke continued, "We are excited to have recently received the final regulatory approval needed to close the acquisition of Energy Harbor. We believe this will be a transformational acquisition for our company, meaningfully scaling our zero-carbon business that provides reliable, dispatchable power. We are confident that the addition of Energy Harbor will allow
Summary of Financial Results for the Year Ended
(Unaudited) (Millions of Dollars) |
||||
|
||||
|
|
Year Ended |
||
|
|
2023 |
|
2022 |
Net income |
|
$ 1,492 |
|
$ (1,210) |
Ongoing Operations |
|
$ 1,498 |
|
$ (1,063) |
Ongoing Operations Adjusted EBITDA |
|
$ 4,140 |
|
$ 3,119 |
|
|
|
|
|
Adjusted EBITDA by Segment |
|
|
|
|
Retail |
|
$ 1,105 |
|
$ 923 |
|
|
$ 1,770 |
|
$ 1,438 |
East |
|
$ 707 |
|
$ 608 |
West |
|
$ 263 |
|
$ 152 |
Sunset |
|
$ 358 |
|
$ 42 |
Corporate and Other |
|
$ (63) |
|
$ (44) |
Asset Closure |
|
$ (39) |
|
$ (125) |
For the year ended
Guidance3 |
|
|
|
($ in millions) |
Reaffirmed 2024 |
Ongoing Operations Adjusted EBITDA |
|
Ongoing Operations Adjusted FCFbG |
|
The
As of
Share Repurchase Program
As of
-
Vistra executed~$3.7 billion in share repurchases sinceNovember 2021 . -
Vistra's Board of Directors authorized an additional$1.5 billion of share repurchases. -
Vistra had ~348 million shares outstanding, representing a ~28% reduction of the amount of the shares outstanding onNov. 2, 2021 .
Repurchase of TRA Rights
As of
Clean Energy Investments
On
In
The Inflation Reduction Act is anticipated to provide the opportunity to realize material benefits to
Liquidity
As of
Earnings Webcast
About Non-GAAP Financial Measures and Items Affecting Comparability
"Adjusted EBITDA" (EBITDA as adjusted for unrealized gains or losses from hedging activities, tax receivable agreement impacts, reorganization items, and certain other items described from time to time in
1 Ongoing Operations excludes the Asset Closure segment. Net Income (Loss) from Ongoing Operations, Ongoing Operations Adjusted EBITDA, and Ongoing Operations Adjusted Free Cash Flow before Growth are non-GAAP financial measures. Any reference to "Ongoing Operations Adjusted FCFbG" is a reference to Ongoing Operations Adjusted Free Cash Flow before Growth. See the "Non-GAAP Reconciliation" tables for further detail. Total segment information may not tie due to rounding.
2 Upon movement of the Edwards Power Plant to the Asset Closure segment effective
3 2024 guidance ranges are for
4 Reflects the potential midpoint opportunity range of Ongoing Operations Adjusted EBITDA for 2025 based on market curves as of
5 The Company expects to use cash on hand and borrowings under its Accounts Receivable and other liquidity facilities to fund the approximately
About
Cautionary Note Regarding Forward-Looking Statements
The information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which
Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law,
CONSOLIDATED STATEMENTS OF OPERATIONS (Millions of Dollars) |
|||||
|
|||||
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2021 |
Operating revenues |
$ 14,779 |
|
$ 13,728 |
|
$ 12,077 |
Fuel, purchased power costs and delivery fees |
(7,557) |
|
(10,401) |
|
(9,169) |
Operating costs |
(1,702) |
|
(1,645) |
|
(1,559) |
Depreciation and amortization |
(1,502) |
|
(1,596) |
|
(1,753) |
Selling, general and administrative expenses |
(1,308) |
|
(1,189) |
|
(1,040) |
Impairment of long-lived and other assets |
(49) |
|
(74) |
|
(71) |
Operating income (loss) |
2,661 |
|
(1,177) |
|
(1,515) |
Other income |
257 |
|
117 |
|
140 |
Other deductions |
(14) |
|
(4) |
|
(16) |
Interest expense and related charges |
(740) |
|
(368) |
|
(384) |
Impacts of Tax Receivable Agreement |
(164) |
|
(128) |
|
53 |
Net income (loss) before income taxes |
2,000 |
|
(1,560) |
|
(1,722) |
Income tax (expense) benefit |
(508) |
|
350 |
|
458 |
Net income (loss) |
1,492 |
|
(1,210) |
|
(1,264) |
Net (income) loss attributable to noncontrolling interest |
1 |
|
(17) |
|
(10) |
Net income (loss) attributable to |
1,493 |
|
(1,227) |
|
(1,274) |
Cumulative dividends attributable to preferred stock |
(150) |
|
(150) |
|
(21) |
Net income (loss) attributable to |
$ 1,343 |
|
$ (1,377) |
|
$ (1,295) |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Dollars) |
|||||
|
|||||
|
Year Ended |
||||
|
2023 |
|
2022 |
|
2021 |
Cash flows — operating activities: |
|
|
|
|
|
Net income (loss) |
$ 1,492 |
|
$ (1,210) |
|
$ (1,264) |
Adjustments to reconcile net income (loss) to cash provided by (used in) |
|
|
|
|
|
Depreciation and amortization |
1,956 |
|
2,047 |
|
2,050 |
Deferred income tax expense (benefit), net |
457 |
|
(359) |
|
(475) |
Gain on sale of land |
(95) |
|
(8) |
|
(9) |
Impairment of long-lived and other assets |
49 |
|
74 |
|
71 |
Unrealized net (gain) loss from mark-to-market valuations of |
(490) |
|
2,510 |
|
759 |
Unrealized net (gain) loss from mark-to-market valuations of interest |
36 |
|
(250) |
|
(134) |
Change in asset retirement obligation liability |
27 |
|
13 |
|
(5) |
Asset retirement obligation accretion expense |
34 |
|
34 |
|
38 |
Impacts of Tax Receivable Agreement |
164 |
|
128 |
|
(53) |
Gain on TRA settlement |
(29) |
|
— |
|
— |
Bad debt expense |
164 |
|
179 |
|
110 |
Stock-based compensation |
77 |
|
63 |
|
47 |
Other, net |
103 |
|
(71) |
|
50 |
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable — trade |
214 |
|
(852) |
|
(228) |
Inventories |
(174) |
|
36 |
|
(100) |
Accounts payable — trade |
(350) |
|
94 |
|
402 |
Commodity and other derivative contractual assets and liabilities |
82 |
|
(228) |
|
32 |
Margin deposits, net |
1,899 |
|
(1,874) |
|
(1,000) |
Uplift securitization proceeds receivable from |
— |
|
544 |
|
(544) |
Accrued interest |
46 |
|
16 |
|
13 |
Accrued taxes |
5 |
|
(8) |
|
(20) |
Accrued employee incentive |
58 |
|
21 |
|
(68) |
Asset retirement obligation settlement |
(81) |
|
(87) |
|
(88) |
Major plant outage deferral |
(32) |
|
20 |
|
2 |
Other — net assets |
84 |
|
(17) |
|
(27) |
Other — net liabilities |
(243) |
|
(330) |
|
235 |
Cash provided by (used in) operating activities |
5,453 |
|
485 |
|
(206) |
Cash flows — investing activities: |
|
|
|
|
|
Capital expenditures, including nuclear fuel purchases and LTSA |
(1,676) |
|
(1,301) |
|
(1,033) |
Proceeds from sales of nuclear decommissioning trust fund securities |
601 |
|
670 |
|
483 |
Investments in nuclear decommissioning trust fund securities |
(624) |
|
(693) |
|
(505) |
Proceeds from sales of environmental allowances |
500 |
|
1,275 |
|
392 |
Purchases of environmental allowances |
(1,071) |
|
(1,303) |
|
(605) |
Insurance proceeds |
15 |
|
39 |
|
89 |
Proceeds from sales of property, plant and equipment |
115 |
|
78 |
|
30 |
Other, net |
(5) |
|
(4) |
|
(4) |
Cash used in investing activities |
(2,145) |
|
(1,239) |
|
(1,153) |
Cash flows — financing activities: |
|
|
|
|
|
Issuances of preferred stock |
— |
|
— |
|
2,000 |
Issuances of long-term debt |
2,498 |
|
1,498 |
|
1,250 |
Repayments/repurchases of debt |
(33) |
|
(251) |
|
(381) |
Borrowings under Term Loan A |
— |
|
— |
|
1,250 |
Repayment under Term Loan A |
— |
|
— |
|
(1,250) |
Proceeds from forward capacity agreement |
— |
|
— |
|
500 |
Net borrowings/(repayments) under accounts receivable financing |
(425) |
|
425 |
|
(300) |
Borrowings under Revolving Credit Facility |
100 |
|
1,750 |
|
1,450 |
Repayments under Revolving Credit Facility |
(350) |
|
(1,500) |
|
(1,450) |
Borrowings under Commodity-Linked Facility |
— |
|
3,150 |
|
— |
Repayments under Commodity-Linked Facility |
(400) |
|
(2,750) |
|
— |
Debt issuance costs |
(59) |
|
(31) |
|
(13) |
Stock repurchases |
(1,245) |
|
(1,949) |
|
(471) |
Dividends paid to common stockholders |
(313) |
|
(302) |
|
(290) |
Dividends paid to preferred stockholders |
(150) |
|
(151) |
|
— |
Other, net |
83 |
|
31 |
|
(21) |
Cash provided by (used in) financing activities |
(294) |
|
(80) |
|
2,274 |
Net change in cash, cash equivalents and restricted cash |
3,014 |
|
(834) |
|
915 |
Cash, cash equivalents and restricted cash — beginning balance |
525 |
|
1,359 |
|
444 |
Cash, cash equivalents and restricted cash — ending balance |
$ 3,539 |
|
$ 525 |
|
$ 1,359 |
NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA
FOR THE YEAR ENDED (Unaudited) (Millions of Dollars) |
|||||||||||||||||
|
|||||||||||||||||
|
Retail |
|
|
|
East |
|
West |
|
Sunset |
|
Eliminations / |
|
Ongoing |
|
Asset |
|
|
Net income (loss) |
$ 424 |
|
$ 354 |
|
$ 1,160 |
|
$ 454 |
|
$ 633 |
|
$ (1,527) |
|
$ 1,498 |
|
$ (6) |
|
$ 1,492 |
Income tax expense |
— |
|
— |
|
1 |
|
— |
|
— |
|
507 |
|
508 |
|
— |
|
508 |
Interest expense and |
20 |
|
(21) |
|
— |
|
(8) |
|
2 |
|
742 |
|
735 |
|
5 |
|
740 |
Depreciation and |
102 |
|
635 |
|
647 |
|
79 |
|
62 |
|
68 |
|
1,593 |
|
— |
|
1,593 |
EBITDA before |
546 |
|
968 |
|
1,808 |
|
525 |
|
697 |
|
(210) |
|
4,334 |
|
(1) |
|
4,333 |
Unrealized net (gain) |
586 |
|
799 |
|
(1,117) |
|
(267) |
|
(455) |
|
— |
|
(454) |
|
(36) |
|
(490) |
Impacts of Tax Agreement (c) |
— |
|
— |
|
— |
|
— |
|
— |
|
135 |
|
135 |
|
— |
|
135 |
Non-cash |
— |
|
— |
|
— |
|
— |
|
— |
|
78 |
|
78 |
|
— |
|
78 |
Transition and merger |
— |
|
1 |
|
1 |
|
— |
|
1 |
|
47 |
|
50 |
|
— |
|
50 |
Impairment of long- |
— |
|
— |
|
— |
|
— |
|
49 |
|
— |
|
49 |
|
— |
|
49 |
PJM capacity |
— |
|
— |
|
3 |
|
— |
|
6 |
|
— |
|
9 |
|
— |
|
9 |
Winter Storm Uri (e) |
(52) |
|
4 |
|
— |
|
— |
|
— |
|
— |
|
(48) |
|
— |
|
(48) |
Other, net |
25 |
|
(2) |
|
12 |
|
5 |
|
60 |
|
(113) |
|
(13) |
|
(2) |
|
(15) |
Adjusted EBITDA |
|
|
|
|
$ 707 |
|
$ 263 |
|
$ 358 |
|
$ (63) |
|
$ 4,140 |
|
$ (39) |
|
$ 4,101 |
___________
|
|
(a) |
Includes |
(b) |
Includes nuclear fuel amortization of |
(c) |
Includes |
(d) |
Represents estimate of anticipated market participant defaults or settlements on initial PJM capacity performance penalties due to extreme magnitude of penalties associated with Winter Storm Elliott. |
(e) |
Includes the application of bill credits. The company incentivized certain large commercial and industrial customers to curtail their usage during Winter Storm Uri by providing bill credits for use in future periods. The company believes the inclusion of the bill credits as a reduction to Adjusted EBITDA in the years in which such bill credits are applied more accurately reflects its operating performance. We estimate remaining bill credit amounts to be applied in future periods for 2024 (approximately |
NON-GAAP RECONCILIATIONS - ADJUSTED EBITDA
FOR THE YEAR ENDED
(Unaudited) (Millions of Dollars) |
|||||||||||||||||
|
|||||||||||||||||
|
Retail |
|
|
|
East |
|
West |
|
Sunset |
|
Eliminations / |
|
Ongoing |
|
Asset |
|
|
Net income (loss) |
1,158 |
|
(615) |
|
(868) |
|
(238) |
|
(230) |
|
(270) |
|
$ (1,063) |
|
(147) |
|
$ (1,210) |
Income tax benefit |
— |
|
— |
|
— |
|
— |
|
— |
|
(350) |
|
(350) |
|
— |
|
(350) |
Interest expense and |
14 |
|
(20) |
|
3 |
|
(6) |
|
3 |
|
371 |
|
365 |
|
3 |
|
368 |
Depreciation and |
145 |
|
623 |
|
706 |
|
42 |
|
66 |
|
69 |
|
1,651 |
|
31 |
|
1,682 |
EBITDA before |
1,317 |
|
(12) |
|
(159) |
|
(202) |
|
(161) |
|
(180) |
|
603 |
|
(113) |
|
490 |
Unrealized net (gain) |
(291) |
|
1,610 |
|
759 |
|
351 |
|
100 |
|
— |
|
2,529 |
|
(19) |
|
2,510 |
Generation plant |
— |
|
— |
|
— |
|
— |
|
7 |
|
— |
|
7 |
|
(3) |
|
4 |
Fresh start / purchase |
— |
|
(2) |
|
(1) |
|
— |
|
9 |
|
— |
|
6 |
|
— |
|
6 |
Impacts of Tax |
— |
|
— |
|
— |
|
— |
|
— |
|
128 |
|
128 |
|
— |
|
128 |
Non-cash |
— |
|
— |
|
— |
|
— |
|
— |
|
65 |
|
65 |
|
— |
|
65 |
Transition and merger |
7 |
|
— |
|
1 |
|
— |
|
— |
|
5 |
|
13 |
|
— |
|
13 |
Impairment of long- |
— |
|
— |
|
— |
|
— |
|
74 |
|
— |
|
74 |
|
— |
|
74 |
Winter Storm Uri (c) |
(141) |
|
(178) |
|
— |
|
— |
|
— |
|
— |
|
(319) |
|
— |
|
(319) |
Other, net |
31 |
|
20 |
|
8 |
|
3 |
|
13 |
|
(62) |
|
13 |
|
10 |
|
23 |
Adjusted EBITDA |
$ 923 |
|
|
|
$ 608 |
|
$ 152 |
|
$ 42 |
|
$ (44) |
|
$ 3,119 |
|
$ (125) |
|
$ 2,994 |
___________ |
|
(a) |
Includes |
(b) |
Includes nuclear fuel amortization of |
(c) |
Adjusted EBITDA impacts of Winter Storm Uri reflects |
NON-GAAP RECONCILIATIONS - ADJUSTED FREE CASH FLOW
FOR YEAR ENDED (Unaudited) (Millions of Dollars) |
|||||
|
|||||
|
Ongoing |
|
Asset
|
|
|
Adjusted EBITDA |
$ 4,140 |
|
$ (39) |
|
$ 4,101 |
Interest paid, net (a) |
(560) |
|
— |
|
(560) |
Taxes paid net of refunds |
(24) |
— |
— |
|
(24) |
Working capital and margin deposits |
1,887 |
|
(3) |
|
1,884 |
Accrued environmental allowances |
336 |
|
— |
|
336 |
Reclamation and remediation |
(3) |
|
(16) |
|
(19) |
Transition and merger expense, including severance |
(58) |
|
(23) |
|
(81) |
Other changes in other operating assets and liabilities |
(63) |
|
(121) |
|
(184) |
Cash provided by (used in) operating activities |
$ 5,655 |
|
$ (202) |
|
$ 5,453 |
Capital expenditures including nuclear fuel purchases and LTSA |
(994) |
|
— |
|
(994) |
Development and growth expenditures |
(682) |
|
— |
|
(682) |
(Purchase)/sale of environmental allowances |
(571) |
|
— |
|
(571) |
Other net investing activities (c) |
(5) |
|
107 |
|
102 |
Free cash flow |
$ 3,403 |
|
$ (95) |
|
$ 3,308 |
Working capital and margin deposits |
(1,887) |
|
3 |
|
(1,884) |
Development and growth expenditures |
682 |
|
— |
|
682 |
Accrued environmental allowances |
(336) |
|
— |
|
(336) |
Purchases and sales of environmental credits and allowances, net |
571 |
|
— |
|
571 |
Transition and merger expense, including severance |
58 |
|
23 |
|
81 |
Adjusted free cash flow before growth |
$ 2,491 |
|
$ (69) |
|
$ 2,422 |
____ ________
|
|
(a) |
Net of interest received. |
(b) |
Includes |
(c) |
Includes investments in and proceeds from the nuclear decommissioning trust fund, insurance proceeds, proceeds from sales of assets, proceeds from sales of nuclear fuel and other net investing cash flows. |
|
||||||
(Unaudited) (Millions of Dollars) |
||||||
|
Ongoing Operations |
Asset Closure |
|
|||
|
Low |
High |
Low |
High |
Low |
High |
Net Income (loss) |
1,790 |
2,090 |
(140) |
(40) |
1,650 |
2,050 |
Income tax expense |
500 |
600 |
0 |
0 |
500 |
600 |
Interest expense and related charges (a) |
960 |
960 |
0 |
0 |
960 |
960 |
Depreciation and amortization (b) |
1,650 |
1,650 |
0 |
0 |
1,650 |
1,650 |
EBITDA before adjustments |
4,900 |
5,300 |
(140) |
(40) |
4,760 |
5,260 |
Unrealized net (gain) loss resulting from hedging transactions |
(1,151) |
(1,151) |
(9) |
(9) |
(1,160) |
(1,160) |
Impacts of Tax Receivable Agreement |
96 |
96 |
0 |
0 |
96 |
96 |
Non-cash compensation expenses |
69 |
69 |
0 |
0 |
69 |
69 |
Transition and merger expenses |
8 |
8 |
0 |
0 |
8 |
8 |
Interest Income |
(220) |
(220) |
0 |
0 |
(220) |
(220) |
Other, net |
(2) |
(2) |
4 |
4 |
2 |
2 |
Adjusted EBITDA guidance |
3,700 |
4,100 |
(145) |
(45) |
3,555 |
4,055 |
Interest paid, net |
(725) |
(725) |
0 |
0 |
(725) |
(725) |
Tax (paid) / received (c) |
(22) |
(22) |
0 |
0 |
(22) |
(22) |
Tax Receivable Agreement payments |
(28) |
(28) |
0 |
0 |
(28) |
(28) |
Working capital and margin deposits |
498 |
498 |
0 |
0 |
498 |
498 |
Accrued environmental allowances |
459 |
459 |
0 |
0 |
459 |
459 |
Reclamation and remediation |
(31) |
(31) |
(95) |
(95) |
(126) |
(126) |
ERP implementation expenditures |
(50) |
(50) |
0 |
0 |
(50) |
(50) |
Other changes in other operating assets and liabilities |
(46) |
(46) |
(12) |
(12) |
(58) |
(58) |
Cash provided by operating activities |
3,755 |
4,155 |
(252) |
(152) |
3,503 |
4,003 |
Capital expenditures including nuclear fuel purchases and LTSA |
(924) |
(924) |
0 |
0 |
(924) |
(924) |
Solar and storage development expenditures |
(745) |
(745) |
0 |
0 |
(745) |
(745) |
Other growth expenditures |
(74) |
(74) |
0 |
0 |
(74) |
(74) |
(Purchase) sale of environmental allowances |
(291) |
(291) |
0 |
0 |
(291) |
(291) |
Other net investing activities |
11 |
11 |
0 |
0 |
11 |
11 |
Free cash flow |
1,732 |
2,132 |
(252) |
(152) |
1,480 |
1,980 |
Working capital and margin deposits |
(498) |
(498) |
0 |
0 |
(498) |
(498) |
Solar and storage development and other growth expenditures |
745 |
745 |
0 |
0 |
745 |
745 |
Other growth expenditures |
74 |
74 |
0 |
0 |
74 |
74 |
Accrued environmental allowances |
(459) |
(459) |
0 |
0 |
(459) |
(459) |
Purchase (sale) of environmental allowances |
291 |
291 |
0 |
0 |
291 |
291 |
Transition and merger expenditures |
(35) |
(35) |
2 |
2 |
(33) |
(33) |
ERP implementation expenditures |
50 |
50 |
0 |
0 |
50 |
50 |
Adjusted free cash flow before growth guidance |
1,900 |
2,300 |
(250) |
(150) |
1,650 |
2,150 |
1 Regulation G Table for 2024 Guidance prepared as of |
|
|
|
(a) |
Includes unrealized (gain) / loss on interest rate swaps of |
(b) |
Includes nuclear fuel amortization of |
(c) |
Includes state tax payments. |
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