IRVING, Texas, Nov. 3, 2017 /PRNewswire/ -- Vistra
Energy (NYSE: VST), the parent company for TXU Energy and Luminant,
today reported third quarter 2017 net income of $273 million. Net income for the first
three quarters of 2017 was $325
million and cash provided by operating activities for the
same period was $845 million.
Adjusted EBITDA for the third quarter 2017 was $522 million. For the first three quarters
of 2017, Vistra Energy's adjusted EBITDA was $1,143 million and adjusted free cash flow was
$625 million.
Curt Morgan, Vistra Energy's
chief executive officer, remarked, "Vistra Energy's third quarter
results were strong, despite disappointing summer weather and the
unplanned outage at Comanche Peak Unit 2 that lasted through early
August. Our results this quarter, in the face of these
headwinds, once again reinforce the strength of our integrated
operations and our commercial capabilities."
Morgan continued, "In 2017 we have put considerable focus on
optimizing the value of our wholesale operations in order to
successfully compete in this challenging, low wholesale power price
environment. Our operations performance initiative has been
successful, identifying approximately $50
million in annual run-rate EBITDA enhancement opportunities
on a full-year basis. Despite this great result, certain of
our coal assets no longer support continued investment in this
existing oversupplied generation market, which includes the
proliferation of subsidized renewables, that when combined with low
natural gas prices has created a period of historically low
wholesale power prices. As a result, earlier this month we
announced the difficult decision to retire three of our coal
plants. We thank our employees at these sites, who have
reliably powered Texas for
decades, for their dedicated service."
Narrowing 2017 Guidance and Initiating 2018 Guidance
Vistra Energy is narrowing its 2017 adjusted EBITDA and adjusted
free cash flow guidance ranges, and the company is also initiating
guidance for 2018, each as set forth below:
($ in
millions)
|
2017 Prior
Guidance
|
2017 Narrowed
Guidance
|
2018
Guidance
|
Adjusted
EBITDA
|
$1,350 –
1,500
|
$1,375 –
1,475
|
$1,300 –
1,450
|
Adjusted Free Cash
Flow
|
$745 – 925
|
$770 – 900
|
$600 – 750
|
Vistra Energy's 2018 guidance ranges reflect expectations of
continued strong performance from the retail operations, hedge
positions as of Oct. 20, 2017, and
the impact of forward price curves on the wholesale operation's
open position as of the same date. Had Vistra Energy been
unhedged as of Oct. 20, 2017, Vistra
Energy's adjusted EBITDA guidance range would have moved up by
approximately $75 million and its
adjusted free cash flow guidance range would have moved up by a
similar amount. The 2018 guidance also assumes full-year
contributions from the Odessa
plant and the operations performance initiative, one planned
nuclear refueling outage at Comanche Peak, and assumes each of
Monticello, Sandow, and Big Brown are retired in early 2018.
Liquidity
As of Sept. 30, 2017, Vistra
Energy had total available liquidity of approximately $2.084 billion, including cash and cash
equivalents of $1.054 billion,
$170 million in available letter of
credit capacity under its term loan C facility, and $860 million of availability under its revolving
credit facility, which remained undrawn at September 30, 2017. Liquidity increased by
approximately $63 million in the
third quarter of 2017 primarily due to increased available cash
from operations.
Announced Plant Retirements
In October, Vistra Energy filed notices with the Electric
Reliability Council of Texas
("ERCOT") stating its plans to retire its Monticello, Sandow, and
Big Brown generation plants. The decision to retire these
units came after an extensive year-long review that determined
these plants are economically challenged in the competitive ERCOT
environment. The retirement of these facilities will reduce
Vistra's generation capacity by approximately 4,200 MW from its
approximately 17,800 MW of current capacity. Monticello
(1,880 MW) will be taken offline in January 2018. Assuming
ERCOT does not determine the plant is needed for system
reliability, Sandow (1,137 MW) will also be taken offline in
January 2018. Big Brown (1,150 MW) will be taken offline in
February 2018 unless either ERCOT
determines the plant is needed for system reliability or the
ongoing sales process is successful.
Also in October, Vistra Energy and Alcoa entered into a contract
termination agreement, resulting in an early settlement of certain
power and mining agreements. In consideration for the early
termination, Alcoa made a one-time payment to Luminant of
$237.5 million. The contracts
helped shield Sandow from significant exposure to the downturn in
the wholesale power market; however, the standalone economics of
the Sandow complex did not support continued investment in the
site.
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
obligations, reorganization items, and certain other items
described from time to time in Vistra Energy's earnings releases)
and "adjusted free cash flow" (cash from operating activities
excluding changes in margin deposits and working capital and
adjusted for capital expenditures, other net investment activities,
preferred stock dividends, and other items described from time to
time in Vistra Energy's earnings releases), are "non-GAAP financial
measures." A non-GAAP financial measure is a numerical measure of
financial performance that excludes or includes amounts so as to be
different than the most directly comparable measure calculated and
presented in accordance with GAAP in Vistra Energy's consolidated
statements of operations, comprehensive income, changes in
stockholders' equity and cash flows. Non-GAAP financial measures
should not be considered in isolation or as a substitute for the
most directly comparable GAAP measures. Vistra Energy's non-GAAP
financial measures may be different from non-GAAP financial
measures used by other companies.
Vistra Energy uses adjusted EBITDA as a measure of performance
and believes that analysis of its business by external users is
enhanced by visibility to both net income prepared in accordance
with GAAP and adjusted EBITDA. Vistra Energy uses adjusted free
cash flow as a measure of liquidity and believes that analysis of
its ability to service its cash obligations is supported by
disclosure of both cash provided by (used in) operating activities
prepared in accordance with GAAP as well as adjusted free cash
flow. The schedules attached to this earnings release
reconcile the non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in
accordance with U.S. GAAP.
Media
Allan Koenig
214-875-8004
Media.Relations@vistraenergy.com
Analysts
Molly Sorg
214-812-0046
Investor@vistraenergy.com
About Vistra Energy
Vistra Energy is a premier
Texas-based energy company focused
on the competitive energy and power generation markets through
operation as the largest retailer and generator of electricity in
the growing Texas market. Our
integrated portfolio of competitive businesses consists primarily
of TXU Energy and Luminant. TXU Energy sells retail electricity and
value-added services (primarily through our market-leading TXU
Energy™ brand) to approximately 1.7 million residential and
business customers in Texas.
Luminant generates and sells electricity and related products from
our diverse fleet of generation facilities totaling approximately
18,000 MW of generation in Texas,
including 2,300 MW fueled by nuclear power, 8,000 MW fueled by
coal, and 7,500 MW fueled by natural gas, and is a large purchaser
of renewable power including wind and solar-generated electricity.
The company is currently developing one of the largest solar
facilities in Texas by
capacity.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes forward-looking
statements, which are subject to risks and uncertainties. All
statements, other than statements of historical facts, are
forward-looking statements. These statements are often, but
not always, made through the use of words or phrases such as "may,"
"should," "could," "predict," "potential," "believe," "will likely
result," "expect," "continue," "will," "shall," "anticipate,"
"seek," "estimate," "intend," "plan," "project," "forecast,"
"goal," "target," "would," "guidance" and "outlook," or the
negative variations of those words or other comparable words of a
future or forward-looking nature. Readers are cautioned not to
place undue reliance on forward-looking statements. Although Vistra
Energy believes that in making any such forward-looking statement,
Vistra Energy's expectations are based on reasonable assumptions,
any such forward-looking statement involves uncertainties and risks
that could cause results to differ materially from those projected
in or implied by any such forward-looking statement, including the
uncertainties and risks discussed in the sections entitled "Risk
Factors" and "Special Note Regarding Forward-Looking Statements" in
our prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) of the Securities Act on May 9, 2017 (as supplemented).
Any forward-looking statement speaks only at the date on which
it is made, and except as may be required by law, Vistra Energy
undertakes 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. New factors
emerge from time to time, and it is not possible to predict all of
them; nor can Vistra Energy assess the impact of each such factor
or the extent to which any factor, or combination of factors, may
cause results to differ materially from those contained in any
forward-looking statement.
VISTRA ENERGY
CORP.
CONDENSED
STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
(Millions of Dollars, Except Earnings Per Share)
|
|
|
Three
Months Ended September 30, 2017
|
|
Nine
Months Ended September 30, 2017
|
Operating
revenues
|
$
|
1,833
|
|
|
$
|
4,487
|
|
Fuel, purchased power
costs and delivery fees
|
(838)
|
|
|
(2,250)
|
|
Operating
costs
|
(218)
|
|
|
(626)
|
|
Depreciation and
amortization
|
(178)
|
|
|
(519)
|
|
Selling, general and
administrative expenses
|
(147)
|
|
|
(434)
|
|
Operating
income
|
452
|
|
|
658
|
|
Other
income
|
10
|
|
|
29
|
|
Other
deductions
|
—
|
|
|
(5)
|
|
Interest expense and
related charges
|
(76)
|
|
|
(169)
|
|
Impacts of Tax
Receivable Agreement
|
138
|
|
|
96
|
|
Income before income
taxes
|
524
|
|
|
609
|
|
Income tax
expense
|
(251)
|
|
|
(284)
|
|
Net income
|
$
|
273
|
|
|
$
|
325
|
|
Weighted average
shares of common stock outstanding:
|
|
|
|
Basic
|
427,591,426
|
|
|
427,587,404
|
|
Diluted
|
428,312,438
|
|
|
428,001,869
|
|
Net income per
weighted average share of common stock outstanding:
|
|
|
|
Basic
|
$
|
0.64
|
|
|
$
|
0.76
|
|
Diluted
|
$
|
0.64
|
|
|
$
|
0.76
|
|
VISTRA ENERGY
CORP.
CONDENSED
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
(Millions of Dollars)
|
|
|
Nine
Months Ended September 30, 2017
|
Cash flows —
operating activities:
|
|
Net income
|
$
|
325
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
Depreciation and
amortization
|
621
|
|
Deferred income tax
expense, net
|
209
|
|
Unrealized net gain
from mark-to-market valuations of derivatives
|
(199)
|
|
Impacts of Tax
Receivable Agreement
|
(96)
|
|
Stock-based
compensation
|
13
|
|
Other, net
|
84
|
|
Changes in operating
assets and liabilities:
|
|
Margin deposits,
net
|
183
|
|
Accrued
taxes
|
4
|
|
Accrued incentive
plan
|
(46)
|
|
Accrued
interest
|
(26)
|
|
Other operating
assets and liabilities
|
(227)
|
|
Cash provided by
operating activities
|
845
|
|
Cash flows —
financing activities:
|
|
Repayments/repurchases of debt
|
(32)
|
|
Other, net
|
(5)
|
|
Cash used in
financing activities
|
(37)
|
|
Cash flows —
investing activities:
|
|
Capital
expenditures
|
(86)
|
|
Nuclear fuel
purchases
|
(56)
|
|
Odessa
acquisition
|
(355)
|
|
Solar development
expenditures
|
(129)
|
|
Changes in restricted
cash
|
34
|
|
Proceeds from sales
of nuclear decommissioning trust fund securities
|
154
|
|
Investments in
nuclear decommissioning trust fund securities
|
(169)
|
|
Other, net
|
10
|
|
Cash used in
investing activities
|
(597)
|
|
|
|
Net change in cash
and cash equivalents
|
211
|
|
Cash and cash
equivalents — beginning balance
|
843
|
|
Cash and cash
equivalents — ending balance
|
$
|
1,054
|
|
VISTRA ENERGY
CORP.
ADJUSTED EBITDA
RECONCILIATION
(Unaudited)
(Millions of Dollars)
|
|
|
Successor
|
|
Three Months
Ended
September 30,
2017
|
|
Wholesale
Generation
|
|
Retail Electricity
|
|
Eliminations
/
Corp and
Other
|
|
Vistra Energy
Consolidated
|
Net
income
|
$
|
469
|
|
|
$
|
7
|
|
|
$
|
(203)
|
|
|
$
|
273
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
251
|
|
|
251
|
|
Interest expense and
related charges
|
9
|
|
|
—
|
|
|
67
|
|
|
76
|
|
Depreciation and
amortization (a)
|
78
|
|
|
108
|
|
|
10
|
|
|
196
|
|
EBITDA before
adjustments
|
$
|
556
|
|
|
$
|
115
|
|
|
$
|
125
|
|
|
$
|
796
|
|
Unrealized net (gain)
loss resulting from hedging transactions
|
(235)
|
|
|
87
|
|
|
—
|
|
|
(148)
|
|
Generation plant
retirement expense
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Fresh start
accounting impacts
|
4
|
|
|
(19)
|
|
|
—
|
|
|
(15)
|
|
Impacts of Tax
Receivable Agreement
|
—
|
|
|
—
|
|
|
(138)
|
|
|
(138)
|
|
Reorganization items
and restructuring expenses
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
Other, net
|
—
|
|
|
(7)
|
|
|
8
|
|
|
1
|
|
Adjusted
EBITDA
|
$
|
349
|
|
|
$
|
176
|
|
|
$
|
(3)
|
|
|
$
|
522
|
|
|
____________
|
|
|
(a)
|
Includes nuclear fuel
amortization of $18 million for the three months ended September
30, 2017.
|
VISTRA ENERGY
CORP.
ADJUSTED EBITDA
RECONCILIATION
(Unaudited)
(Millions of Dollars)
|
|
|
Successor
|
|
Nine Months
Ended
September 30,
2017
|
|
Wholesale
Generation
|
|
Retail Electricity
|
|
Eliminations
/ Corp and
Other
|
|
Vistra Energy
Consolidated
|
Net
income
|
$
|
653
|
|
|
$
|
77
|
|
|
$
|
(405)
|
|
|
$
|
325
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
284
|
|
|
284
|
|
Interest expense and
related charges
|
14
|
|
|
—
|
|
|
155
|
|
|
169
|
|
Depreciation and
amortization (a)
|
233
|
|
|
322
|
|
|
29
|
|
|
584
|
|
EBITDA before
adjustments
|
$
|
900
|
|
|
$
|
399
|
|
|
$
|
63
|
|
|
$
|
1,362
|
|
Unrealized net (gain)
loss resulting from hedging transactions
|
(362)
|
|
|
160
|
|
|
—
|
|
|
(202)
|
|
Generation plant
retirement expense
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Fresh start
accounting impacts
|
11
|
|
|
24
|
|
|
—
|
|
|
35
|
|
Impacts of Tax
Receivable Agreement
|
—
|
|
|
—
|
|
|
(96)
|
|
|
(96)
|
|
Reorganization items
and restructuring expenses
|
1
|
|
|
2
|
|
|
12
|
|
|
15
|
|
Other, net
|
6
|
|
|
(13)
|
|
|
12
|
|
|
5
|
|
Adjusted
EBITDA
|
$
|
580
|
|
|
$
|
572
|
|
|
$
|
(9)
|
|
|
$
|
1,143
|
|
|
|
___________
|
|
|
(a)
|
Includes nuclear fuel
amortization of $65 million for the nine months ended September 30,
2017.
|
VISTRA ENERGY
CORP.
ADJUSTED FREE CASH
FLOW RECONCILIATION
(Unaudited)
(Millions of Dollars)
|
|
|
Successor
|
|
Nine
Months
Ended
September 30,
2017
|
Adjusted
EBITDA
|
$
|
1,143
|
|
Interest paid, net
(a)
|
(182)
|
|
Taxes paid
|
(51)
|
|
Payments funded from
restructuring escrow accounts
|
(29)
|
|
Other changes in
operating assets and liabilities
|
(115)
|
|
Working capital and
margin deposits
|
102
|
|
Reclamation and
remediation
|
(23)
|
|
Cash provided by
operating activities
|
$
|
845
|
|
Capital
expenditures
|
(86)
|
|
Nuclear fuel
purchases
|
(56)
|
|
Solar development
expenditures
|
(129)
|
|
Odessa
acquisition
|
(355)
|
|
Other net investing
activities (b)
|
(5)
|
|
Free cash
flow
|
$
|
214
|
|
Working capital and
margin deposits
|
(102)
|
|
Solar development
expenditures
|
129
|
|
Odessa
acquisition
|
355
|
|
Payments funded from
restructuring escrow accounts
|
29
|
|
Adjusted free cash
flow
|
$
|
625
|
|
|
|
___________
|
|
|
(a)
|
Net of interest
received. Excludes fees paid on Vistra Operations Credit
Facility repricing in February 2017 and August 2017.
|
|
|
(b)
|
Includes investments
in and proceeds from the nuclear decommissioning trust fund and
other net investing cash flows, but excludes changes in restricted
cash.
|
VISTRA ENERGY
CORP.
ADJUSTED EBITDA
GUIDANCE RECONCILIATION
(Unaudited)
(Millions of Dollars)
|
|
|
Year
Ended
December 31,
2017
|
|
Year
Ended
December 31,
2018
|
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Net
Income
|
$
|
393
|
|
|
$
|
458
|
|
|
$
|
150
|
|
|
$
|
248
|
|
Income tax
expense
|
161
|
|
|
196
|
|
|
127
|
|
|
179
|
|
Interest expense and
related charges
|
202
|
|
|
202
|
|
|
176
|
|
|
176
|
|
Depreciation and
amortization
|
761
|
|
|
761
|
|
|
660
|
|
|
660
|
|
EBITDA before
adjustments
|
$
|
1,517
|
|
|
$
|
1,617
|
|
|
$
|
1,113
|
|
|
$
|
1,263
|
|
Unrealized net (gain)
loss resulting from hedging transactions
|
(134)
|
|
|
(134)
|
|
|
44
|
|
|
44
|
|
Generation plant
retirement expenses
|
24
|
|
|
24
|
|
|
24
|
|
|
24
|
|
Fresh start
accounting impacts
|
59
|
|
|
59
|
|
|
36
|
|
|
36
|
|
Reorganization and
restructuring expenses
|
11
|
|
|
11
|
|
|
3
|
|
|
3
|
|
Other, net
|
(102)
|
|
|
(102)
|
|
|
80
|
|
|
80
|
|
Adjusted
EBITDA
|
$
|
1,375
|
|
|
$
|
1,475
|
|
|
$
|
1,300
|
|
|
$
|
1,450
|
|
VISTRA ENERGY
CORP.
ADJUSTED FREE CASH
FLOW GUIDANCE RECONCILIATION
(Unaudited)
(Millions of Dollars)
|
|
|
Year
Ended
December 31,
2017
|
|
Year
Ended
December 31,
2018
|
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Adjusted
EBITDA
|
$
|
1,375
|
|
|
$
|
1,475
|
|
|
$
|
1,300
|
|
|
$
|
1,450
|
|
Interest
payments
|
(219)
|
|
|
(219)
|
|
|
(203)
|
|
|
(203)
|
|
Tax
payments
|
(106)
|
|
|
(141)
|
|
|
(22)
|
|
|
(22)
|
|
Tax receivable
agreement payments
|
(25)
|
|
|
(25)
|
|
|
—
|
|
|
—
|
|
Working capital and
margin deposits
|
350
|
|
|
350
|
|
|
50
|
|
|
50
|
|
Payments funded from
restructuring escrow accounts
|
(90)
|
|
|
(90)
|
|
|
—
|
|
|
—
|
|
Alcoa
settlement
|
238
|
|
|
238
|
|
|
—
|
|
|
—
|
|
Reclamation and
remediation
|
(41)
|
|
|
(41)
|
|
|
(121)
|
|
|
(121)
|
|
Other changes in
operating assets and liabilities
|
(100)
|
|
|
(35)
|
|
|
5
|
|
|
5
|
|
Cash provided by
operating activities
|
$
|
1,382
|
|
|
$
|
1,512
|
|
|
$
|
1,009
|
|
|
$
|
1,159
|
|
Capital expenditures
including nuclear fuel
|
(213)
|
|
|
(213)
|
|
|
(363)
|
|
|
(363)
|
|
Solar development
expenditures
|
(204)
|
|
|
(204)
|
|
|
(29)
|
|
|
(29)
|
|
Odessa
acquisition
|
(355)
|
|
|
(355)
|
|
|
—
|
|
|
—
|
|
Other net investing
activities
|
(5)
|
|
|
(5)
|
|
|
(20)
|
|
|
(20)
|
|
Free cash
flow
|
$
|
605
|
|
|
$
|
735
|
|
|
$
|
597
|
|
|
$
|
747
|
|
Working capital and
margin deposits
|
(350)
|
|
|
(350)
|
|
|
(50)
|
|
|
(50)
|
|
Solar development
expenditures
|
204
|
|
|
204
|
|
|
29
|
|
|
29
|
|
Odessa
acquisition
|
355
|
|
|
355
|
|
|
—
|
|
|
—
|
|
Alcoa settlement, net
of related taxes
|
(154)
|
|
|
(154)
|
|
|
—
|
|
|
—
|
|
Generation plant
retirement expenses
|
11
|
|
|
11
|
|
|
24
|
|
|
24
|
|
Restructuring related
payments
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
Payments funded from
restructuring escrow accounts
|
90
|
|
|
90
|
|
|
—
|
|
|
—
|
|
Adjusted free cash
flow
|
$
|
770
|
|
|
$
|
900
|
|
|
$
|
600
|
|
|
$
|
750
|
|
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SOURCE Vistra Energy