Vistra Corp

Cash Flows

Operating Cash Flows

Cash provided by operating activities totaled $312 million and $1.435 billion in the three months ended March 31, 2024 and 2023, respectively. The unfavorable change of $1.123 billion was primarily driven by a lower decrease in net margin deposits (returns of cash related to commodity contracts which support our hedging strategy) as $128 million was returned in the three months ended March 31, 2024 as compared to $1.227 billion returned in the three months ended March 31, 2023, partially offset by cash received from an increase in realized energy margins recognized in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Depreciation and amortization — Depreciation and amortization expense reported as a reconciling adjustment in the condensed consolidated statements of cash flows exceeds the amount reported in the condensed consolidated statements of operations by $152 million and $111 million for the three months ended March 31, 2024 and 2023, respectively. The difference represents amortization of nuclear fuel, which is reported as fuel costs in the condensed consolidated statements of operations consistent with industry practice, and amortization of intangible net assets and liabilities that are reported in various other condensed consolidated statements of operations line items including operating revenues and fuel and purchased power costs and delivery fees (see Note 7 to the Financial Statements).

Investing Cash Flows

Cash used in investing activities totaled $3.528 billion and $513 million for the three months ended March 31, 2024 and 2023, respectively. The increase of $3.015 billion was driven primarily by (a) $3.1 billion used to fund the Energy Harbor Merger and (b) $88 million in higher net purchases of environmental allowances, partially offset by a $125 million increase in proceeds from sales of property, plant and equipment, including nuclear fuel.

Financing Cash Flows

Cash provided by financing activities totaled $793 million in the three months ended March 31, 2024 compared to cash used in financing activities of $874 million in the three months ended March 31, 2023. The change of $1.667 billion was driven by (a) the net borrowing of $1.375 billion of short-term debt and accounts receivable financing amounts in the three months ended March 31, 2024 to partially fund the Energy Harbor Merger compared to the net repayment of $475 million of short-term debt and accounts receivable financing amounts in the three months ended March 31, 2023 and (b) $700 million of borrowings under the Vistra Zero Term Loan B Facility, partially offset by cash used for long-term debt and TRA tender offers executed in January 2024.

Debt Activity

We remain committed to a strong balance sheet and have continued to state our objective to reduce our consolidated net leverage. We also intend to maintain adequate liquidity and pursue opportunities to refinance our long-term debt to extend maturities.

In May 2024 and July 2024, after taking into account the Senior Secured Notes Tender Offer settled in January 2024, $342 million of 4.875% Senior Secured Notes and $1.155 billion of 3.550% Senior Secured Notes, respectively, will reach maturity. We plan to fund these upcoming principal payments using a combination of (a) the proceeds from the issuance of $500 million of 6.000% Senior Secured Notes due 2034 and $1.0 billion of 6.875% Senior Unsecured Notes due 2032 and (b) cash on hand. Increases in interest rates have resulted in, and will likely continue to result in, increased borrowing costs.

See Note 8 to the Financial Statements for details of the Receivables Facility and Repurchase Facility and Note 10 to the Financial Statements for details of the Vistra Operations Credit Facilities, the Commodity-Linked Facility and other long-term debt.

Available Liquidity

The following table summarizes changes in available liquidity for the three months ended March 31, 2024:

(a)See the condensed consolidated statements of cash flows in the Financial Statements and Cash Flows above for details of the decrease in cash and cash equivalents for the three months ended March 31, 2024. The decrease includes $3.1 billion that was used to fund the Energy Harbor Merger.

(b)The increase in availability for the three months ended March 31, 2024 was driven by an $80 million decrease in letters of credit outstanding under the facility.

(c)As of both March 31, 2024 and December 31, 2023, the borrowing bases are less than the facility limit of $1.575 billion. As of March 31, 2024, available capacity reflects the borrowing base of $1.137 billion and $500 million in cash borrowings. As of December 31, 2023, available capacity reflects the borrowing base of $1.101 billion and no cash borrowings.

(d)Excludes amounts available to be borrowed under the Receivables Facility and the Repurchase Facility, respectively. See Note 8 to the Financial Statements for detail on our accounts receivable financing.

(e)Excludes any additional letters of credit that may be issued under the Secured LOC Facilities, the Alternative LOC Facility or the Energy Harbor LOC Facility. See Note 10 to the Financial Statements for detail on our letter of credit facilities.

We believe that we will have access to sufficient liquidity to fund our other anticipated cash requirements through at least the next 12 months. Our operational cash flows tend to be seasonal and weighted toward the second half of the year.

Including obligations assumed in the Energy Harbor Merger, our obligations under commodity purchase and services agreements, including capacity payments, nuclear fuel and natural gas take-or-pay contracts, coal contracts, business services and nuclear-related outsourcing and other purchase commitments, are expected to total approximately $3.0 billion in fiscal year 2024, $2.9 billion in 2025-2026, $1.1 billion in 2027-2028 and $500 million thereafter.

Capital Expenditures

Estimated 2024 capital expenditures and nuclear fuel purchases as of May 8, 2024 total approximately $1.943 billion and include:

•$822 million for investments in generation and mining facilities;

•$745 million for solar and energy storage development;

•$302 million for nuclear fuel purchases; and

•$74 million for other growth expenditures.

Share Repurchase Program

In October 2021, we announced that the Board authorized a share repurchase program (Share Repurchase Program) under which up to $2.0 billion of our outstanding shares of common stock may be repurchased. The Share Repurchase Program became effective on October 11, 2021, at which time it superseded the 2020 Share Repurchase Program (described below) and any authorization remaining as of such date. In August 2022, March 2023 and February 2024, the Board authorized incremental amounts of $1.25 billion, $1.0 billion and $1.5 billion, respectively, for repurchases to bring the total authorized under the Share Repurchase Program to $5.75 billion.

The following table provides information about our repurchases of common stock for the period between January 1, 2024 and May 3, 2024:

(a)Shares repurchased include 72,839 of unsettled shares for $5 million as of March 31, 2024.

Dividends

Common Stock Dividends

In November 2018, Vistra announced the Board adopted a dividend program which we initiated in the first quarter of 2019. Each dividend under the program is subject to declaration by the Board and, thus, may be subject to numerous factors in existence at the time of any such declaration including, but not limited to, prevailing market conditions, Vistra's results of operations, financial condition and liquidity, Delaware law and any contractual limitations. Quarterly dividends paid per share of common stock in 2024 and 2023 are reflected in the table below.

In May 2024, the Board declared a quarterly dividend of $0.2175 per share of common stock that will be paid in June 2024.

Preferred Stock Dividends

Semiannual dividends paid per share of each respective preferred stock series in 2024 and 2023 are reflected in the table below. Dividends payable are recorded on the Board declaration date.

In May 2024, the Board declared a semi-annual dividend of $35.00 per share of Series B Preferred Stock that will be paid in June 2024 and an initial dividend of $48.32 per share on Series C Preferred Stock that will be paid in July 2024.

Liquidity Effects of Commodity Hedging and Trading Activities

We have entered into commodity hedging and trading transactions that require us to post collateral if the forward price of the underlying commodity moves such that the hedging or trading instrument we hold has declined in value. We use cash, letters of credit, Eligible Assets (see Note 9 to the Financial Statements) and other forms of credit support to satisfy such collateral posting obligations. See Note 10 to the Financial Statements for discussion of the Vistra Operations Credit Facilities, the Commodity-Linked Facility, the Secured LOC Facilities, the Alternative LOC Facility and the Energy Harbor LOC Facility.

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

As of March 31, 2024, we received or posted cash, letters of credit, and Eligible Assets for commodity hedging and trading activities as follows:

•$1.629 billion in cash and Eligible Assets have been posted with counterparties as compared to $1.244 billion posted as of December 31, 2023;

•$115 million in cash has been received from counterparties as compared to $45 million received as of December 31, 2023;

•$2.634 billion in letters of credit have been posted with counterparties as compared to $2.408 billion posted as of December 31, 2023; and

•$140 million in letters of credit have been received from counterparties as compared to $143 million received as of December 31, 2023.

See Collateral Support Obligations below for information related to collateral posted in accordance with the PUCT and ISO/RTO rules.

Income Tax Payments

In the next 12 months, we expect to make approximately $4 million in federal income tax payments and $52 million in state income tax payments, offset by $8 million in state tax refunds.

For the three months ended March 31, 2024, there were no federal income tax payments, $3 million in state income tax payments, $1 million in state income tax refunds and no TRA payments.

Financial Covenants

The Vistra Operations Credit Agreement and the Vistra Operations Commodity-Linked Credit Agreement each includes a covenant, solely with respect to the Revolving Credit Facility and the Commodity-Linked Facility and solely during a compliance period (which, in general, is applicable when the aggregate revolving borrowings and issued revolving letters of credit exceed 30% of the revolving commitments, provided that solely with respect to the Revolving Credit Facility only such amounts in excess of $300 million are taken into account for purposes of determining whether a compliance period is in effect), that requires the consolidated first-lien net leverage ratio not to exceed 4.25 to 1.00 (or, during a collateral suspension period, the consolidated total net leverage ratio not to exceed 5.50 to 1.00). In addition, each of the Secured LOC Facilities includes a covenant that requires the consolidated first-lien net leverage ratio not to exceed 4.25 to 1.00 (or, for certain facilities that include a collateral suspension mechanism, during a collateral suspension period, the consolidated total net leverage ratio not to exceed 5.50 to 1.00). As of March 31, 2024, we were in compliance with the Vistra Operations Credit Agreement, Vistra Operations Commodity-Linked Credit Agreement and Secured LOC Facilities financial covenants.

See Note 10 to the Financial Statements for discussion of other covenants related to the Vistra Operations Credit Facilities.

Collateral Support Obligations

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

The PUCT has rules in place to assure adequate creditworthiness of each REP, including the ability to return customer deposits, if necessary. Under these rules, as of March 31, 2024, Vistra has posted letters of credit in the amount of $95 million with the PUCT, which is subject to adjustments.

The ISOs/RTOs we operate in have rules in place to assure adequate creditworthiness of parties that participate in the markets operated by those ISOs/RTOs. Under these rules, Vistra has posted collateral support totaling $583 million in the form of letters of credit, $81 million in the form of a surety bond and $12 million of cash as of March 31, 2024 (which is subject to daily adjustments based on settlement activity with the ISOs/RTOs).

Material Cross Default/Acceleration Provisions

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

A default by Vistra Operations or any of its restricted subsidiaries in respect of certain specified indebtedness in an aggregate amount in excess of the greater of $300 million and 17.5% of Consolidated EBITDA may result in a cross default under the Vistra Operations Credit Facilities and the Commodity-Linked Facility. Such a default would allow the lenders under each such facility to accelerate the maturity of outstanding balances under such facilities, which totaled approximately $2.494 billion and $500 million, respectively, as of March 31, 2024.

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

Under the Vistra Operations Senior Unsecured Indentures, the Vistra Operations Senior Secured Indenture and the Indenture governing the 7.233% Senior Secured Notes, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount of $300 million or more may result in a cross default under the Vistra Operations Senior Unsecured Notes, the Senior Secured Notes, the 7.233% Senior Secured Notes, the Vistra Operations Credit Facilities, the Receivables Facility, the Commodity-Linked Facility and other current or future documents evidencing any indebtedness for borrowed money by the applicable borrower or issuer, as the case may be, and the applicable Guarantor Subsidiaries party thereto.

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

The Receivables Facility contains a cross-default provision. The cross-default provision applies, among other instances, if TXU Energy, Dynegy Energy Services, Ambit Texas, Value Based Brands, Energy Harbor LLC, TriEagle Energy, each indirect subsidiaries of Vistra and originators under the Receivables Facility (Originators), and Vistra or any of their respective subsidiaries fails to make a payment of principal or interest on any indebtedness that is outstanding in a principal amount of at least $300 million, in the case of Vistra Operations, and in a principal amount of at least $50 million, in the case of TXU Energy or any of the other Originators, after the expiration of any applicable grace period, or if other events occur or circumstances exist under such indebtedness which give rise to a right of the debtholder to accelerate such indebtedness, or if such indebtedness becomes due before its stated maturity. If this cross-default provision is triggered, a termination event under the Receivables Facility would occur and the Receivables Facility may be terminated.

The Repurchase Facility contains a cross-default provision. The cross-default provision applies, among other instances, if an event of default (or similar event) occurs under the Receivables Facility or the Vistra Operations Credit Facilities. If this cross-default provision is triggered, a termination event under the Repurchase Facility would occur and the Repurchase Facility may be terminated.

Under the Secured LOC Facilities, a default by Vistra Operations or any of its restricted subsidiaries in respect of certain specified indebtedness in an aggregate amount in excess of $300 million may result in a cross default under the Secured LOC Facilities. In addition, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount of $300 million or more, may result in a termination of the Secured LOC Facilities.

Under the Alternative LOC Facility, a default by Vistra Operations or any of its restricted subsidiaries in respect of certain specified indebtedness in an aggregate amount in excess of the greater of $300 million and 17.5% of Consolidated EBITDA may result in a cross default under the Alternative LOC Facility. In addition, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount exceeding the threshold above, may result in a termination of the Alternative LOC Facility.

Under the Vistra Operations Senior Unsecured Indenture and the Vistra Operations Senior Secured Indenture governing the 7.750% Senior Unsecured Notes and 6.950% Senior Secured Notes, respectively, a default under any document evidencing indebtedness for borrowed money by Vistra Operations or any Guarantor Subsidiary for failure to pay principal when due at final maturity or that results in the acceleration of such indebtedness in an aggregate amount that exceeds the greater of 1.5% of total assets and $600 million may result in a cross default under the respective notes and other current or future documents evidencing any indebtedness for borrowed money by the applicable borrower or issuer, as the case may be, and the applicable Guarantor Subsidiaries party thereto.

A default by Vistra Zero or any of its restricted subsidiaries in respect of certain specified indebtedness in an aggregate amount in excess of the greater of $100 million and 75% of Consolidated EBITDA may result in a cross default under the Vistra Zero Credit Agreement. Such a default would allow the lenders under each such facility to accelerate the maturity of outstanding balances under such facilities, which totaled approximately $700 million as of March 31, 2024.

Guarantees

See Note 15 to the Financial Statements for discussion of guarantees.