Vistra(VST) - 2024 Q3 - Quarterly Report

Financial Performance - Operating revenues for Q3 2024 increased to $6.288 billion, up from $4.086 billion in Q3 2023, representing a 53.9% growth[12] - Net income for Q3 2024 rose to $1.837 billion, compared to $502 million in Q3 2023, a 266% increase[12] - Net income per diluted share for Q3 2024 was $5.25, up from $1.25 in Q3 2023[12] - Total comprehensive income for Q3 2024 was $1.838 billion, compared to $500 million in Q3 2023[13] - Net income for the quarter ending June 30, 2024, was $467 million, driven by strong performance across key segments[20] - Net income attributable to Vistra for the nine months ended September 30, 2024 was $2.218 billion, compared to $1.677 billion for the same period in 2023[77] - Diluted earnings per share for the nine months ended September 30, 2024 was $5.86, up from $4.13 in the same period in 2023[77] - Revenues for the three months ended September 30, 2024, were $6.288 billion, a 29% increase from $4.872 billion in the same period in 2023[48] - Net income for the three months ended September 30, 2024, was $1.837 billion, a 385% increase from $379 million in the same period in 2023[48] Cash Flow and Capital Expenditures - Cash provided by operating activities for the nine months ended September 30, 2024, was $3.210 billion, down from $4.572 billion in the same period in 2023[14] - Capital expenditures, including nuclear fuel purchases and LTSA prepayments, totaled $1.648 billion for the nine months ended September 30, 2024[14] - Cash, cash equivalents, and restricted cash at the end of September 2024 stood at $940 million, down from $3.225 billion at the end of September 2023[15] - Cash and cash equivalents decreased to $905 million as of September 30, 2024, from $3.485 billion as of December 31, 2023[16] Acquisitions and Mergers - The company completed the Energy Harbor acquisition for $3.065 billion (net of cash acquired) in 2024[14] - The Energy Harbor Merger was completed on March 1, 2024, with a total purchase price of $4.596 billion, including $3.1 billion in cash consideration and $1.496 billion in fair value of net assets contributed to Vistra Vision[43] - Vistra maintained an 85% ownership interest in Vistra Vision post-merger, with the remaining 15% recorded as a noncontrolling interest[44] - The fair value of identifiable assets acquired in the Energy Harbor Merger was $8.923 billion, with adjustments of $138 million during the measurement period[45] - The fair value of identifiable liabilities assumed in the Energy Harbor Merger was $3.735 billion, with adjustments of $63 million during the measurement period[45] - Goodwill of $219 million was recorded as a result of the Energy Harbor Merger, representing expected synergies from combining operations[46] - Acquisition costs for the Energy Harbor Merger totaled $1 million for the three months ended September 30, 2024, compared to $8 million in the same period in 2023[49] Stock Repurchases and Dividends - Stock repurchases amounted to $1.021 billion for the nine months ended September 30, 2024[14] - Stock repurchases totaled $1,022 million from December 31, 2023, to September 30, 2024, reducing treasury stock[20] - Dividends declared on common stock amounted to $230 million for the nine months ending September 30, 2024[20] - Dividends declared on preferred stock totaled $135 million for the nine months ending September 30, 2024[20] - The Board authorized an additional $1.0 billion for share repurchases under the Share Repurchase Program in October 2024[40] Debt and Financing - The company issued $2.200 billion in long-term debt during the nine months ended September 30, 2024[14] - Long-term debt, less amounts due currently, increased to $13.945 billion as of September 30, 2024, from $12.116 billion as of December 31, 2023[16] - Long-term debt including debt due currently was $14.730 billion as of September 30, 2024, up from $14.402 billion at December 31, 2023[92] - Accounts receivable financing increased to $750 million as of September 30, 2024, compared to none at December 31, 2023[92] - Vistra Operations' total long-term debt as of September 30, 2024, is $14.73 billion, with $13.945 billion excluding amounts due currently[94][96] - Vistra Operations' credit facilities total $7.928 billion, including $5.656 billion in senior secured revolving credit commitments and term loans[97][98] - The Revolving Credit Facility was amended in October 2024, increasing revolving credit commitments to $3.44 billion and extending the maturity date to October 11, 2029[98] - The Term Loan B-3 Facility has a weighted average interest rate of 6.85% on outstanding borrowings of $2.481 billion as of September 30, 2024[100] - Vistra Operations' Commodity-Linked Facility was amended in October 2024, increasing aggregate available commitments to $1.75 billion and extending the maturity date to October 1, 2025[105] - The borrowing base of the Commodity-Linked Facility is $633 million as of September 30, 2024, with the potential to increase to $3.0 billion[105] - Vistra Operations' senior secured notes total $3.894 billion as of September 30, 2024, down from $5.65 billion as of December 31, 2023[94] - Vistra Operations' senior unsecured notes total $7.3 billion as of September 30, 2024, up from $6.3 billion as of December 31, 2023[94] - The applicable interest rate margin for the Revolving Credit Facility is 1.725%, with a fee of 27.0 basis points on undrawn amounts as of September 30, 2024[99] - The applicable interest rate margin for the Commodity-Linked Facility is 1.725%, with a fee of 27.0 basis points on undrawn amounts as of September 30, 2024[108] - Vistra Zero entered into a $700 million senior secured term loan (Term Loan B Facility) on March 26, 2024, with net proceeds of $690 million used for working capital and general corporate purposes[110] - The weighted average interest rate on the Term Loan B Facility was 7.60% as of September 30, 2024, with quarterly payments of $1.75 million required[111] - Vistra Operations issued $500 million of 6.000% senior secured notes due 2034 in April 2024, with net proceeds of approximately $495 million used for general corporate purposes[117] - Vistra Operations issued $1.0 billion of 6.875% senior unsecured notes due 2032 in April 2024, with net proceeds of approximately $990 million used for general corporate purposes[121] - Vistra Operations repurchased $759 million of senior secured notes in January 2024, recording an extinguishment gain of $6 million[124] - The Board authorized the voluntary repayment or repurchase of up to $1.0 billion of outstanding debt, with authorization expiring on December 31, 2024[125] - The Receivables Facility was amended to increase the purchase limit from $750 million to $1.0 billion in April 2024, with outstanding borrowings totaling $750 million as of September 30, 2024[126][128] - The Repurchase Facility was renewed until July 2025 with a facility size of $125 million[129] - There were no outstanding borrowings under the Repurchase Facility as of September 30, 2024 and December 31, 2023[131] Equity and Retained Earnings - Total equity increased to $5.455 billion as of September 30, 2024, from $5.322 billion as of December 31, 2023[18] - Retained deficit improved to $(759) million as of September 30, 2024, from $(2.613) billion as of December 31, 2023[18] - Redeemable noncontrolling interest was $3.198 billion as of September 30, 2024, compared to $0 as of December 31, 2023[17] - Total equity increased from $5,322 million at December 31, 2023, to $7,307 million at June 30, 2024, reflecting growth in retained earnings and additional paid-in capital[20] - Equity issued to acquire Energy Harbor contributed $2,307 million to total equity in Q1 2024[20] - Accumulated other comprehensive income increased by $1 million in Q3 2024, reflecting favorable market conditions[20] - Noncontrolling interest in subsidiaries decreased by $3,198 million in Q3 2024 due to modifications in ownership structure[20] - Retained deficit improved significantly, decreasing from $(2,613) million at December 31, 2023, to $(759) million at September 30, 2024[20] - Additional paid-in capital increased by $1,389 million from December 31, 2023, to September 30, 2024, primarily due to equity issuance and stock-based compensation[20] Revenue and Segment Performance - Retail energy charge revenue in ERCOT for the three months ended September 30, 2024, was $2.5 billion, contributing significantly to total revenue from contracts with customers[55] - Total other revenues for the three months ended September 30, 2024, were $1.947 billion, including $1.960 billion of unrealized net gains from mark-to-market valuations of commodity positions[55] - Intersegment sales for the three months ended September 30, 2024, included $1.456 billion in the Texas segment, $57 million in the East segment, and $68 million in the Sunset segment[56] - Retail energy charge in ERCOT generated $2.667 billion in revenue for the three months ended September 30, 2023[58] - Total revenue from contracts with customers for the three months ended September 30, 2023 was $4.789 billion[58] - Wholesale generation revenue from ISO/RTO capacity was $1.289 billion for the three months ended September 30, 2023[58] - Retail energy charge in ERCOT generated $6.241 billion in revenue for the nine months ended September 30, 2024[61] - Total revenue from contracts with customers for the nine months ended September 30, 2024 was $11.099 billion[61] - Wholesale generation revenue from ISO/RTO capacity was $1.290 billion for the nine months ended September 30, 2024[61] - Unrealized net gains from mark-to-market valuations of commodity positions totaled $1.571 billion for the nine months ended September 30, 2024[62] - Intersegment unrealized net gains in the Texas segment were $547 million for the nine months ended September 30, 2024[62] - Intersegment unrealized net losses in the East segment were $114 million for the nine months ended September 30, 2024[62] - Retail energy charge in ERCOT generated $6,079 million in revenue[64] - Wholesale generation revenue from ISO/RTO amounted to $1,242 million[64] - Total revenue from contracts with customers reached $10,924 million[64] - Unrealized net gains from mark-to-market valuations totaled $1,020 billion[65] - Remaining performance obligations for 2024-2029 and thereafter total $3,052 million[66] Assets and Liabilities - Total assets increased to $37.878 billion as of September 30, 2024, compared to $32.966 billion as of December 31, 2023[16] - Trade accounts receivable increased to $2.179 billion as of September 30, 2024, from $1.674 billion as of December 31, 2023[16] - Inventories increased to $949 million as of September 30, 2024, from $740 million as of December 31, 2023[16] - Goodwill increased to $2.802 billion as of September 30, 2024, up from $2.583 billion at December 31, 2023, primarily due to the Energy Harbor Merger[78] - Identifiable intangible assets subject to amortization totaled $816 million as of September 30, 2024, up from $523 million at December 31, 2023[80] - Estimated amortization expense of identifiable intangible assets for 2024 is $313 million, with $222 million projected for 2025[85] - Total assets measured at fair value increased to $8,184 million as of September 30, 2024, from $6,173 million as of December 31, 2023[152] - Total liabilities measured at fair value decreased to $4,704 million as of September 30, 2024, from $6,946 million as of December 31, 2023[152] - Trade accounts receivable as of September 30, 2024, stood at $2,179 million[67] - Allowance for uncollectible accounts increased by $132 million in 2024[68] Derivatives and Risk Management - Vistra has entered into interest rate swaps with notional amounts of $3,000 million (fixed), $700 million (variable), and $1,625 million (fixed), expiring between July 2026 and December 2030[135][136] - As of September 30, 2024, Vistra's derivative contractual assets and liabilities totaled $3,690 million in assets and $4,654 million in liabilities, resulting in a net liability of $964 million[139] - Commodity contracts contributed $1,206 million to operating revenues and $128 million to fuel, purchased power costs, and delivery fees for the three months ended September 30, 2024[140] - Interest rate swaps resulted in a $73 million loss in interest expense and related charges for the three months ended September 30, 2024[140] - Gross notional amounts of natural gas derivatives were 4,775 million MMBtu as of September 30, 2024, down from 5,335 million MMBtu as of December 31, 2023[145] - Electricity derivatives had a gross notional amount of 786,155 GWh as of September 30, 2024, compared to 800,001 GWh as of December 31, 2023[145] - Financial transmission rights derivatives totaled 243,755 GWh as of September 30, 2024, down from 250,895 GWh as of December 31, 2023[145] - Interest rate swaps with variable/fixed rates had a gross notional amount of $4,625 million as of September 30, 2024, compared to $5,225 million as of December 31, 2023[145] - Derivative contract liabilities fair value decreased to $1,369 million as of September 30, 2024, from $1,890 million as of December 31, 2023[147] - Total credit risk exposure related to derivative contracts was $4.077 billion as of September 30, 2024, with net exposure of $827 million after netting arrangements and collateral[148] - The banking and financial sector represented 75% of total credit risk exposure and 25% of net exposure as of September 30, 2024[148] - NDT debt securities had an average coupon rate of 3.96% as of September 30, 2024, with $1.011 billion maturing in one to five years, $616 million in five to 10 years, and $478 million after 10 years[153] - Natural gas to power correlation ranged from 10% to 100%, with an average of 55% as of September 30, 2024[156] - Power and natural gas volatility ranged from 5% to 710%, with an average of 359% as of September 30, 2024[157] - Illiquid delivery periods for hub power prices and Heat Rates ranged from $35 to $20 MWh, with an average of $7 MWh as of September 30, 2024[159] - Electricity purchases and sales fair value was $773 million in assets and $1,235 million in liabilities, resulting in a net value of $(462) million as of September 30, 2024[160] - Total net liabilities for electricity purchases and sales contracts amounted to $824 million, with assets at $449 million and liabilities at $1,273 million[161] - The average hourly price curve shape for electricity contracts ranged from $85 to $44 per MWh, with an average of $44[161] - Natural gas to power correlation ranged from 10% to 100%, with an average of 55%[161] - Power and natural gas volatility ranged from 10% to 870%, with an average of 441%[161] - The net liability balance at the end of the period was $517 million, down from $1,284 million at the beginning of the period[164] - Unrealized valuation gains for the period were $361 million, compared to losses of $486 million in the previous period[164] Legal and Regulatory Matters - The company faces litigation related to natural gas index pricing manipulation claims dating back to 2000-2002, with a class certification appeal pending in the Seventh Circuit Court[183] - A complaint filed by the Illinois Attorney General against IG&E alleges improper marketing and overcharging, with claims now limited to the period starting May 2017[184] - The company is involved in legal proceedings related to Ohio House Bill 6, with civil RICO complaints pending against Energy Harbor companies[185] - The Texas Supreme Court reversed a lower court decision, upholding the PUCT's pricing orders related to Winter Storm Uri[187] - Multiple personal injury and