Vistra files 10-Q: quarterly report (10-Q)

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes included in Part I, Item 1. Financial Statements .

Business Environment and Outlook

Electricity Demand

Electricity demand drivers including the rise of large-scale data centers, the electrification of oil field operations, and electric vehicle load building are contributing to a projected fast-paced load growth in the regions we serve. Our integrated retail electricity and power generation operations allow us to quickly respond to electricity demand changes. To support growing demand from large‑scale electricity consumers, we continue to engage in discussions with various counterparties regarding the potential long-term sale of power from our generation facilities, and we are progressing a series of development initiatives across our generation portfolio, including nuclear uprates and other capacity expansions.

Supply Chain Constraints

Our industry continues to face ongoing supply chain constraints and labor shortages, which have reduced the availability of essential equipment and supplies for constructing new generation facilities, increased the lead times for procuring materials, and raised equipment and labor costs associated with maintaining our natural gas, nuclear, and coal fleet.

We are proactively managing these constraints by continuously re-evaluating the business cases and timing of our planned development projects. This has led to the deferral or abandonment of some planned capital expenditures for our solar and battery projects and could impact the economic feasibility of additional projects in our new generation development pipeline. We are engaging with suppliers to secure key materials needed to maintain our existing generation facilities before future planned outages.

Iran Conflict

We are monitoring the conflict involving the United States, Israel, and Iran and related instability in the Middle East, including the potential for further escalation and disruption. Although the Company does not conduct operations in the affected region, prolonged or expanded instability could indirectly affect the Company through broader macroeconomic and commodity-market impacts, including changes in natural gas and power prices, supply-chain disruptions, construction delays, increased inflationary pressures, and capital-market volatility, which could impact our future results of operations. See Factors Affecting Our Financial Condition and Results of Operations — Commodity Prices for additional information on our commodity hedging strategy and estimated hedging levels for the balance of 2026 and 2027.

Noteworthy Developments Cogentrix Acquisition

On October 30, 2026, Vistra acquired Cogentrix. The acquisition resulted in the addition of 10 modern natural gas generation facilities totaling approximately 5,500 MW of capacity, including three CCGT facilities and two combustion turbine facilities located across PJM, four CCGT facilities in ISO-NE, and one cogeneration facility in ERCOT.

Aggregate consideration at closing consisted of approximately (i) $2.2 billion in cash, net of adjustments for working capital, acquired cash, the assumption of $1.7 billion of outstanding indebtedness of Cogentrix as of the acquisition date, and certain other adjustments and (ii) 5,000,000 shares of Vistra common stock, par value $0.01, issued to the seller, at a mutually agreed-upon value of $185 per share. See Note 2 to the Financial Statements for additional information.

On November 5, 2026, we repaid $1.7 billion of debt assumed in the Cogentrix Acquisition using a combination of cash on hand and borrowings under the Receivables Facility and Repurchase Facility.

VISTRA CORP.

Vistra Operations Junior Subordinated Notes and Preferred Stock Redemption

In September 2026, Vistra Operations issued $850 million aggregate principal amount of the Series A Notes and $650 million aggregate principal amount of the Series B Notes. The Junior Subordinated Notes are junior subordinated, unsecured obligations of Vistra Operations. The Junior Subordinated Notes are irrevocably and unconditionally guaranteed by Vistra Corp.

Net proceeds totaling approximately $1.485 billion, together with cash on hand, were or will be used for general corporate purposes, including to make distributions to Vistra Corp. to fund the redemption of all of Vistra Corp's outstanding Series A Preferred Stock, which was redeemed on October 15, 2026, and all of the Series B Preferred Stock, which is expected to occur on December 15, 2026 (see Note 17 for additional information). Pending use of the net offering proceeds as described above, Vistra Operations intends to invest the net proceeds in short-term interest-bearing accounts, securities, or similar investments.

Capacity Markets — PJM Auction Results

In July 2026, Vistra received its results from the PJM Capacity Auction for planning year 2028-2029, and the table below lists clearing price per MW-day and our cleared capacity volumes by zone:

Strategic Investment in Digital Infrastructure

In June 2026, the Company entered into a limited partnership agreement governing the Helix Fund, an open-ended investment fund managed by affiliates of KKR. As a founding investor in the Helix Fund, the Company committed up to $1 billion consisting of (i) an initial $500 million commitment and (ii) an additional $500 million commitment subject to the Helix Fund meeting certain commercial power supply milestones for our existing generation assets or, at the Company's election, regardless of whether such milestones are achieved.

The Helix Fund will seek to invest in and manage assets critical to enabling AI, including hyperscale data center development and operations; baseload and flexible power generation; transmission and distribution infrastructure; and fiber and connectivity infrastructure, among other assets. This investment reflects our strategy to participate in the growing demand for power generation assets supporting hyperscale data center development, while leveraging our existing fleet and development capabilities.

Gas Plants Disposition

Planned Gas-Fueled Dispatchable Power in ERCOT

In May 2024, we announced our intention to add up to 2,000 MW of dispatchable, natural gas-fueled electricity capacity in west, central, and north Texas consisting of the following projects:

• Building up to 860 MW of advanced simple-cycle peaking plants to be located in west Texas to support the increasing power needs of the region, including the state's oil and gas industry. Early development work is underway on this project which we anticipate will be online in 2028.

VISTRA CORP.

• Repowering the coal-fueled Coleto Creek Power Plant near Goliad, Texas, which retired as a coal-fueled facility in September 2026 to comply with EPA rules, as a natural gas-fueled plant with up to 600 MW of capacity.