Vistra Corp

RESULTS OF OPERATIONS

Net income decreased $680 million to Net income of $18 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. For additional information see the following discussion of our results of operations.

EBITDA and Adjusted EBITDA

In analyzing and planning for our business, we supplement our use of GAAP financial measures with non-GAAP financial measures, including EBITDA and Adjusted EBITDA as performance measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed (i) with our GAAP results and (ii) the accompanying reconciliations to corresponding GAAP financial measures may provide a more complete understanding of factors and trends affecting our business. Because EBITDA and Adjusted EBITDA are financial measures that management uses to allocate resources, determine our ability to fund capital expenditures, assess performance against our peers, and evaluate overall financial performance, we believe they provide useful information for investors.

These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures and are, by definition, an incomplete understanding of Vistra and must be considered in conjunction with GAAP measures. In addition, non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. We strongly encourage investors to review our condensed consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.

When EBITDA or Adjusted EBITDA is discussed in reference to performance on a consolidated basis, the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA is Net income (loss).

Vistra Consolidated Financial Results — Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the three months ended March 31, 2024:

(a)Includes $47 million of unrealized mark-to-market net gains on interest rate swaps.

(b)Includes nuclear fuel amortization of $26 million and $23 million, respectively, in Texas and East segments.

(c)Includes $10 million gain recognized on the repurchase of TRA Rights in the three months ended March 31, 2024 (see Note 13 to the Financial Statements).

(d)Represents net of all NDT income (loss), ARO accretion expense for operating assets and ARO remeasurement impacts for operating assets.

The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the three months ended March 31, 2023:

(a)Includes $41 million of unrealized mark-to-market net losses on interest rate swaps.

(b)Includes nuclear fuel amortization of $23 million in Texas segment.

(c)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.

(d)Adjusted EBITDA impacts of Winter Storm Uri reflects the application of bill credits to large commercial and industrial customers that curtailed their usage during Winter Storm Uri and a reduction in the allocation of ERCOT default uplift charges which were expected to be paid over several decades under protocols existing at the time of the storm.

GAAP operating income decreased $1.045 billion to operating income of $86 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The primary driver for the decrease is a $1.261 billion change in unrealized mark-to-market activity as results for the three months ended March 31, 2024 were unfavorably impacted by $176 million in pre-tax unrealized mark-to-market losses on derivative positions due to power and natural gas forward market curves moving up in the three months ended March 31, 2024 compared to $1.085 billion in pre-tax unrealized mark-to-market gains on commodity derivative positions due to power and natural gas forward market curves moving down in the three months ended March 31, 2023. See further information on our derivative results in Energy-Related Commodity Contracts and Mark-to-Market Activities below.

In addition to the mark-to-market impacts discussed above, operating results for the three months ended March 31, 2024, compared to the three months ended March 31, 2023 were impacted by additional factors including:

Favorable impacts:

•Expiration of contracts in the East segment which resulted in higher-than-expected migration of customers to default service providers at rates below prevailing wholesale market prices in the three months ended March 31, 2023.

•Addition of Energy Harbor in March 2024 with results reflected in the East and Retail segments.

Unfavorable impacts:

•Decreases in capacity revenues primarily in the Sunset segment.

•Increase in selling, general and administrative expenses in Retail and Corp driven primarily by the addition of Energy Harbor.

The following table presents operational performance of our retail and generation segments:

(a)Reflects heating degree days for the region based on Weather Services International (WSI) data.

(a) Reflects the average of daily quoted prices for the periods presented and does not reflect costs incurred by us.

(b)Reflects the average of day-ahead quoted prices for the periods presented and does not necessarily reflect prices we realized.

For the three months ended March 31, 2024, other income totaled $91 million driven by NDT net gains of $35 million, interest income of $23 million and a gain of $10 million on TRA repurchases. For the three months ended March 31, 2023, other income totaled $20 million driven by interest income.

Consolidated interest expense and related charges decreased $37 million in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to unrealized mark-to-market gains on interest rate swaps of $47 million in 2024 compared to unrealized mark-to-market losses on interest rate swaps of $41 million in 2023 due to an increase in interest rates in the three months ended March 31, 2024 compared to a decrease in the three months ended March 31, 2023, partially offset by an increase in interest paid/accrued of $52 million driven by higher average borrowings and rates in 2024. See Note 18 to the Financial Statements.

The following table presents additional changes to Net income (loss) and Adjusted EBITDA for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

(a) Includes amounts associated with March 2024 operations acquired in the Energy Harbor Merger.

(b)See Energy-Related Commodity Contracts and Mark-to-Market Activities below for analysis of hedging strategy.

Asset Closure Segment— Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Operating costs for the three months ended March 31, 2024 and 2023 include ongoing costs associated with the decommissioning and reclamation of retired plants and mines. GAAP and Adjusted EBITDA results for 2024 are favorable compared to 2023 primarily due to higher costs incurred in 2023 for the January 2023 retirement of the Edwards generation facility.

Energy-Related Commodity Contracts and Mark-to-Market Activities

As forward power prices materially increased in 2022, our generation segments (Texas, East, West and Sunset) aggressively sold forward power for future years. We entered the 2023 and 2024 calendar years with more than 99% of our expected generation volumes hedged. While settled power prices in the first quarter of 2023 and 2024 are lower than historical averages, the strategic hedging allowed us to lock in margins above what we would have been able to realize if unhedged. Additionally, the margins we were able to lock in with hedges for the first quarter of 2024 were higher than the first quarter of 2023 which is driving the increase in realized revenue net of fuel in the generation segments along with the addition of Energy Harbor in the East segment. The forward power sales are also the drivers of the changes in unrealized gains/losses on hedging activities. As power prices increase/decrease in comparison to what our generation segments have sold forward, the generation segments recognize unrealized losses/gains. The retail segment procures power from the generation segments to serve future load obligations and thus changes in forward power prices have an inverse effect on unrealized mark to market for the retail segment as compared to the generation segments. This is evident in the first quarter of 2023 as decrease in forward power prices drove material unrealized gains in our generation segment, partially offset by unrealized losses in our retail segment. In the first quarter of 2024, forward power prices increased slightly which resulted in unrealized losses in our generation segments which is partially offset by unrealized gains in our retail segment.

The table below summarizes the changes in commodity contract assets and liabilities for the three months ended March 31, 2024 and 2023. The net change in these assets and liabilities, excluding "other activity" as described below, reflects $176 million in unrealized net losses and $1.085 billion in unrealized net gains for the three months ended March 31, 2024 and 2023, respectively, arising from mark-to-market accounting for positions in the commodity contract portfolio.

(a)Represents reversals of previously recognized unrealized gains and losses upon settlement/termination (offsets realized gains/(losses) recognized in the settlement period). Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.

(b)Represents unrealized net gains/(losses) recognized, reflecting the effect of changes in fair value. Excludes changes in fair value in the month the position settled as well as amounts related to positions entered into, and settled, in the same month.

(c)Includes fair value of commodity contracts acquired in the Energy Harbor Merger (see Note 2 to the Financial Statements).

(d)Primarily represents changes in fair value of positions due to receipt or payment of cash not reflected in unrealized gains or losses. Amounts are generally related to premiums related to options purchased or sold as well as certain margin deposits classified as settlement for certain transactions executed on the CME.

The following maturity table presents the net commodity contract liability arising from recognition of fair values as of March 31, 2024, scheduled by the source of fair value and contractual settlement dates of the underlying positions.

We have engaged in natural gas hedging activities to mitigate the risk of higher or lower wholesale electricity prices that have corresponded to increases or declines in natural gas prices. When natural gas prices are elevated or depressed, we continue to seek opportunities to manage our wholesale power price exposure through hedging activities, including forward wholesale and retail electricity sales.

Estimated hedging levels for generation volumes in our Texas, East, West and Sunset segments as of March 31, 2024 were as follows: