Vistra Energy Reports Third Quarter 2017 Results, Narrows 2017 Guidance, and Initiates 2018 Guidance – iCrowdNewswire
 
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Nov 3, 2017 5:20 PM ET

Vistra Energy Reports Third Quarter 2017 Results, Narrows 2017 Guidance, and Initiates 2018 Guidance

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iCrowdNewswire - Nov 3, 2017

IRVING, TexasNov. 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
[email protected]

Analysts
Molly Sorg
214-812-0046
[email protected]

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

 
Contact Information:

Vistra Energy

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