Vistra Corp

RESULTS OF OPERATIONS

Net income decreased $9 million to Net income of $467 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Net income decreased $689 million to Net income of $485 million for the six months ended June 30, 2024 compared to the six months ended June 30, 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 the 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 June 30, 2024 Compared to the Three Months Ended June 30, 2023

The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the three months ended June 30, 2024:

(a)Includes $11 million of unrealized mark-to-market net gains on interest rate swaps.

(b)Includes nuclear fuel amortization of $26 million and $71 million, respectively, in Texas and East segments.

(c)Represents net of all NDT income (loss) of the PJM nuclear facilities, 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 June 30, 2023:

(a)Includes $63 million of unrealized mark-to-market net gains on interest rate swaps.

(b)Includes nuclear fuel amortization of $19 million in the Texas segment.

(c)Represents change in estimate of anticipated market participant defaults on PJM capacity performance penalties due to extreme magnitude of penalties associated with Winter Storm Elliott.

(d)Includes the application of bill credits to large commercial and industrial customers that curtailed their usage during Winter Storm Uri.

GAAP operating income increased $217 million to operating income of $808 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The primary driver for the increase is the income generated in the East and Retail segments from operations acquired in the Energy Harbor acquisition and strong retail margins and customer count performance in ERCOT.

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.

The following table presents additional changes to Net income (loss) and Adjusted EBITDA for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

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

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

For the three months ended June 30, 2024, other income totaled $62 million driven by NDT net gains of $40 million and interest income of $18 million. For the three months ended June 30, 2023, other income totaled $124 million driven by a gain of $89 million from the sale of property in Freestone County, Texas, interest income of $12 million and insurance settlements of $8 million.

Consolidated interest expense and related charges increased $141 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to (i) an increase in interest paid/accrued of $93 million driven by higher average borrowings and rates in 2024 and (ii) lower unrealized mark-to-market gains on interest rate swaps of $11 million in 2024 compared to $63 million in 2023 due to less interest rate volatility in the second quarter of 2024 as compared to the second quarter of 2023. See Note 17 to the Financial Statements.

Vistra Consolidated Financial Results — Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the six months ended June 30, 2024:

(a)Includes $58 million of unrealized mark-to-market net gains on interest rate swaps.

(b)Includes nuclear fuel amortization of $52 million and $94 million, respectively, in Texas and East segments.

(c)Includes $10 million gain recognized on the repurchase of TRA Rights in the six months ended June 30, 2024 (see Note 12 to the Financial Statements).

(d)Represents net of all NDT income (loss) of the PJM nuclear facilities, 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 six months ended June 30, 2023:

(a)Includes $22 million of unrealized mark-to-market net gains on interest rate swaps.

(b)Includes nuclear fuel amortization of $42 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 $828 million to operating income of $894 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The primary driver for the decrease is a $1.269 billion change in unrealized mark-to-market activity as results for the six months ended June 30, 2024 were unfavorably impacted by $130 million in pre-tax unrealized mark-to-market losses on derivative positions due to power market curves moving up in the six months ended June 30, 2024 compared to $1.139 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 six months ended June 30, 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 six months ended June 30, 2024, compared to the six months ended June 30, 2023 were impacted by additional factors including:

Favorable impacts:

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

•Expiration of default service contracts in the East segment which resulted in higher-than-expected migration of customers at rates below prevailing wholesale market prices in the six months ended June 30, 2023.

Unfavorable impacts:

•Decreases in capacity revenues primarily in the Sunset segment.

•Increase in selling, general and administrative expenses in Retail segment and Corp. and Other 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 six months ended June 30, 2024, other income totaled $153 million driven by NDT net gains of $75 million, interest income of $41 million and a gain of $10 million on TRA repurchases. For the six months ended June 30, 2023, other income totaled $144 million driven by a gain of $89 million from the sale of property in Freestone County, Texas, interest income of $26 million and insurance settlements of $9 million.

Consolidated interest expense and related charges increased $104 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to an increase in interest paid/accrued of $145 million driven by higher average borrowings and rates in 2024, partially offset by higher unrealized mark-to-market gains on interest rate swaps of $58 million in 2024 compared $22 million in 2023 due to a higher increase in interest rates in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 . See Note 17 to the Financial Statements.

The following table presents additional changes to Net income (loss) and Adjusted EBITDA for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

(a) Includes amounts associated with March 1, 2024 through June 30, 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 and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

GAAP and Adjusted EBITDA results for the three and six months ended June 30, 2024 are unfavorable compared to the three and six months ended June 30, 2023 primarily due to other income of $89 million from the gain on sale of property in Freestone County, Texas in the second quarter of 2023.

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 half 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 three and six months ended June 30, 2024 were higher than the three and six months ended June 30, 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 half of 2023 as a 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 half 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 six months ended June 30, 2024 and 2023. The net change in these assets and liabilities, excluding "other activity" as described below, reflects $130 million in unrealized net losses and $1.139 billion in unrealized net gains for the six months ended June 30, 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 June 30, 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 June 30, 2024 were as follows: