false 0001692819 0001692819 2024-11-19 2024-11-19

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2024

 

 

VISTRA CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-38086   36-4833255

(State or other jurisdiction of

incorporation or organization)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification No.)

6555 Sierra Drive

Irving, TX

   75039
(Address of principal executive offices)   (Zip Code)

(214) 812-4600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.l4a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. 14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

  

Trading

Symbol(s)

  

Name of Each Exchange

on Which Registered

Common stock, par value $0.01 per share   VST   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 7.01

Regulation FD Disclosure.

Vistra Operations Company LLC, an indirect wholly owned subsidiary of Vistra Corp. (the “Company”), expects to launch a private offering (the “Offering”) of senior secured notes due 2026 and senior secured notes due 2034 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.

The Company expects to disclose certain pro forma financial information of the Company giving effect to its acquisition of Energy Harbor Corp. in a private preliminary offering memorandum that is being disseminated in connection with the Offering. Such unaudited pro forma financial information of the Company as of September 30, 2024, giving effect to the acquisition of Energy Harbor Corp., are set forth in Exhibit 99.1 and incorporated herein by reference.

This current report on Form 8-K is neither an offer to sell, nor a solicitation of an offer to buy, any of the securities mentioned above and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offer of the securities mentioned above will be made only by means of a private offering memorandum. The securities mentioned above have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and are being offered pursuant to an applicable exemption from such registration requirements.

The information set forth in and incorporated into this Item 7.01 of this Current Report on Form 8-K is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. The filing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

 No. 

   

Description

99.1    Unaudited pro forma condensed combined consolidated financial information of Vistra for the nine months ended September 30, 2024.
104    The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    Vistra Corp.
Dated: November 19, 2024    

/s/ Margaret Montemayor

    Name:   Margaret Montemayor
    Title:   Senior Vice President, Chief Accountant and Controller

Exhibit 99.1

VISTRA CORP.

UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION

On March 1, 2024, Vistra Corp., a Delaware corporation (“Vistra”) completed its previously announced transaction pursuant to that certain Transaction Agreement dated as of March 6, 2023 (the “Transaction Agreement”), by and among Vistra Operations Company, LLC, a Delaware limited liability company (“Parent” or the “Company”) and an indirect wholly owned subsidiary of Vistra, Black Pen Inc., a Delaware corporation (“Merger Sub”) and an indirect wholly-owned subsidiary of Parent, and Energy Harbor Corp., a Delaware corporation (“Energy Harbor”), pursuant to which, among other things, Merger Sub merged with and into Energy Harbor (the “Merger”), with Energy Harbor continuing as the surviving entity following the completion of the Merger.

Subject to the terms and conditions of the Transaction Agreement, prior to the consummation of the Merger, the Company caused certain of its subsidiaries to transfer certain of its subsidiary entities, including Merger Sub, to Vistra Vision, LLC, a newly formed Delaware limited liability company and then indirect wholly-owned subsidiary of the Company (“Vistra Vision”). Vistra contributed its nuclear and retail businesses and specified Vistra Zero renewables and storage projects (“Vistra Legacy”) into Vistra Vision (the “Contribution”). The Contribution and the Merger combined Energy Harbor’s nuclear and retail businesses with Vistra Legacy under Vistra Vision.

In September 2023, Vistra Operations issued $650 million aggregate principal amount of 6.950% senior secured notes (“Senior Secured Notes”) due 2033 and $1.1 billion aggregate principal amount of 7.750% senior unsecured notes (“Senior Unsecured Notes”) due 2031. Vistra incurred fees and expenses related to the Senior Secured Notes and Senior Unsecured Notes that totaled $7 million and $14 million, respectively, for the year ended December 31, 2023. These fees and expenses were capitalized as a reduction in the carrying amount of the debt. On February 29, 2024, Vistra drew on the Receivables Facility1 in the amount of $750 million, on the Repurchase Facility2 in the amount of $125 million, and on the Commodity-Linked Facility3 in the amount of $500 million. Vistra financed the Merger with the net proceeds from the Senior Secured Notes, Senior Unsecured Notes, Receivables Facility, Repurchase Facility, Commodity-Linked Facility, and cash on hand.

Collectively, the Merger, Contribution, Receivables Facility, Repurchase Facility, and the Commodity-Linked Facility are referred to as the “Transactions.” Total consideration paid by the Company to Energy Harbor shareholders for the Merger consisted of approximately $3.0 billion in cash and a 15% equity interest in Vistra Vision (the “Consideration”). In addition, Vistra Vision paid $100 million of Energy Harbor’s transaction expenses and assumed approximately $430 million of debt from Energy Harbor in the Merger.

The Unaudited Pro Forma Combined Consolidated Statements of Operations for the nine months ended September 30, 2024 has been prepared to give effect to the Transactions, Senior Secured Notes, and Senior Unsecured Notes as if they had occurred on January 1, 2023. The financial information of Energy Harbor was derived from Energy Harbor’s unaudited condensed consolidated statement of operations for the period from January 1, 2024 through March 1, 2024. For all periods after March 1, 2024 Energy Harbor’s results were included in Vistra’s consolidated financial statements. No unaudited pro forma combined condensed consolidated balance sheet is presented herein since the Transactions are already reflected in Vistra’s most recent condensed consolidated balance sheet filed with the SEC.

The Merger was accounted for using the acquisition method with Vistra as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations.

 

1 

TXU Energy Receivables Company LLC, an indirect subsidiary of Vistra, and Vistra Operations are party to an accounts receivable financing facility provided by issuers of asset-backed commercial paper and commercial banks (“Purchasers”) (as amended, the “Receivables Facility”).

2 

TXU Energy Retail Company (“TXU Energy”) and the other originators under the Receivables Facility have a repurchase facility that is provided on an uncommitted basis by MUFG Bank, Ltd. (“Repurchase Facility”).

3 

In order to support Vistra’s comprehensive hedging strategy, in February 2022, Vistra Operations entered into a $1.0 billion senior secured commodity-linked revolving credit facility (Commodity-Linked Facility).

The Unaudited Pro Forma Combined Consolidated Financial Information presented is based on available information using assumptions the Company believes are reasonable. The Unaudited Pro Forma Combined Consolidated Financial Information and related notes are provided for illustrative purposes only and do not purport to represent the Company’s actual results of operations had the Transactions occurred on the date indicated, nor do they project the Company’s results of operations for any future period or date. The Unaudited Pro Forma Combined Consolidated Financial Information does not consider any cost savings, operating synergies, or additional costs that may be incurred to achieve such synergies, or otherwise incurred, after completing the Merger. As such, the actual results reported by the Company in periods following the Transactions may differ materially from the Unaudited Pro Forma Combined Consolidated Financial Information. The Company believes its current estimates provide a reasonable basis of presenting the significant effects of the Transactions. However, the estimates and assumptions are subject to change as additional information becomes available. For purposes of the Unaudited Pro Forma Combined Consolidated Financial Information, the adjustments related to Receivables Facility and Repurchase Facility to effectuate the Transactions are shown in a separate column as “Financing Adjustments.”

The Unaudited Pro Forma Combined Consolidated Financial Information should be read in conjunction with the historical consolidated financial statements and accompanying notes included in Vistra’s audited consolidated financial statements as of and for the year ended December 31, 2023, contained in the Form 10-K filed on February 29, 2024, Energy Harbor’s audited consolidated financial statements as of and for the year ended December 31, 2023 and Vistra’s unaudited pro forma combined financial statements as of and for the year ended December 31, 2023 contained in the Form 8-K/A filed on April 9, 2024, the Transaction Agreement, which is attached as Exhibit 2.1 to the Form 8-K published on March 7, 2023, and the historical consolidated financial statements and accompanying notes included in Vistra’s unaudited consolidated financial statements as of and for the nine months ended September 30, 2024, contained in the Form 10-Q filed on November 8, 2024.

The Unaudited Pro Forma Combined Consolidated Financial Information have been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” using assumptions set forth in the notes herein. Article 11 permits presentation of reasonably estimable synergies, dis-synergies and other transaction effects that have occurred or are expected to occur (“Management’s Adjustments”). The Company has elected not to present Management’s Adjustments and will only be presenting transaction accounting adjustments in the Unaudited Pro Forma Combined Consolidated Financial Statements.

VISTRA CORP.

Unaudited Pro Forma Combined Consolidated Statement of Operations

Nine Months Ended September 30, 2024

(Millions of Dollars, Except Per Share Amounts)

 

           Energy Harbor,                    
     Historical     As Adjusted     Transaction     Financing     Pro Forma  
     Vistra Corp     (Note 1)     Adjustments     Adjustments     Combined  

Operating revenues

    $ 13,187     $ 723     $ 1 2 (a)    $ —      $ 13,911  

Fuel, purchased power costs and delivery fees

      (5,520 )      (444 )      (33 ) 2(a)      —        (5,997 ) 

Operating costs

      (1,742 )      (192 )      (9 ) 2(b)      —        (1,943 ) 

Depreciation and amortization

      (1,306 )      (9 )      (1 ) 2(a)      —        (1,372 ) 
         (56 ) 2(c)     

Selling, general and administrative expenses

      (1,137 )      (257 )      257  2(d)      —        (1,137 ) 

Impairment of long-lived and other assets

      —        —        —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income (loss)

      3,482       (179 )      159       —        3,462  

Other income

      292       7       —        —        299  

Nuclear decommissioning trust results

      —        21       —        —        21  

Other deductions

      (10 )      —        —        —        (10 ) 

Interest expense and related charges

      (743 )      (4 )      —        (14 ) 3(a)      (761 ) 

Impacts of Tax Receivable Agreement

      (5 )      —        —        —        (5 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) before income taxes

      3,016       (155 )      159       (14 )      3,006  

Income tax (expense) benefit

      (694 )      47       (36 ) 2(e)      3  3(b)      (680 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

      2,322       (108 )      123       (11 )      2,326  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net (income) loss attributable to noncontrolling interest

      (104 )      —        48  2(f)      —        (56 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to Vistra

      2,218       (108 )      171       (11 )      2,270  

Cumulative dividends attributable to preferred stock

      (144 )      —        —        —        (144 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to Vistra common stock

    $ 2,074     $ (108 )    $ 171     $ (11 )    $ 2,126  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average shares of common stock outstanding:

           

Basic

      346,315,215             346,315,215  

Diluted

      353,805,937             353,805,937  

Net income (loss) per weighted average share of common stock outstanding:

           

Basic

    $ 5.99           $ 6.14  

Diluted

    $ 5.86           $ 6.01  

See accompanying notes to the Unaudited Pro Forma Combined Consolidated Financial Information.

Note 1. Reclassification Adjustments

Certain reclassifications have been made in the historical presentation of Energy Harbor’s financial statements for the period from January 1, 2024 through February 29, 2024 to conform to Vistra’s historical presentation. Additionally, as part of preparing these Unaudited Pro Forma Combined Consolidated Financial Statements, Vistra conducted a review of the accounting policies of Energy Harbor to determine if differences in accounting policies require reclassification of Energy Harbor financial statement results to conform to Vistra’s accounting policies. Aside from the accounting policy reclassifications identified below, Vistra did not become aware of any material differences between the accounting policies of Energy Harbor and Vistra.

Reclassification and classification of the Unaudited Pro Forma Combined Consolidated Statement of Operations for the nine months ended September 30, 2024:

 

     Nine Months Ended September 30, 2024  
            (Millions of Dollars)             
     Before      Reclassification          After  
     Reclassification      Amount      Ref.   Reclassification  

Revenues

      731        (731 )     (a)     —   

Operating revenues

         723      (a)(d)     723  

Fuel and purchased power

      420        (420 )     (a)(b)     —   

Fuel, purchased power costs and delivery fees

         444      (b)(d)     444  

Depreciation and amortization

      15        (6 )     (c)     9  

Other operating costs

      475        (475 )     (b)(d)     —   

Operating costs

         192      (c)(d)     192  

Selling, general and administrative expenses

         257      (d)     257  

Other income / (expense)

      7        (7 )     (e)     —   

Other income

         7      (e)     7  

Interest expense, net

      (4 )       4      (f)     —   

Interest expense and related charges

         (4 )     (f)     (4 ) 

Income tax expense (benefit)

      (47 )       47      (g)     —   

Income tax (expense) benefit

         (47 )     (g)     (47 ) 

 

(a)

Represents reclassification of $731 million and $8 million from Revenues and Fuel and purchased power, respectively, to Operating revenues. The $8 million represents a reclassification to align Energy Harbor’s presentation of capacity costs to Vistra’s practice of recording capacity costs in revenue.

(b)

Represents reclassification of $403 million and $9 million from Fuel and purchased power to Fuel, purchased power costs and delivery fees and Operating costs, respectively. Fuel, purchased power costs and delivery fees after reclassification is comprised of the $403 million reclassification from Fuel and purchased power and the $41 million reclassification from Other operating costs noted in tickmark (d).

(c)

Represents reclassification of $6 million and $9 million from Depreciation and amortization to Operating costs and Depreciation and amortization, respectively. The $6 million of accretion expense for asset retirement obligations represents a reclassification to align Energy Harbor’s presentation in Depreciation and amortization to Vistra’s presentation in Operating costs.

(d)

Represents reclassification of $177 million, $257 million and $41 million from Other operating costs to Operating costs, Selling, general and administrative expenses and Fuel, purchased power costs and delivery fees, respectively. Operating costs after reclassification is comprised of the $177 million reclassification from Other operating costs, the $9 million reclassification from Fuel and purchased power noted in tickmark (b) the $6 million reclassification from Depreciation and amortization noted in tickmark (c).

(e)

Represents the reclassification of $7 million from Other income / (expense) to Other income.

(f)

Represents the reclassification of $4 million from Interest expense, net to Interest expense and related charges.

(g)

Represents the reclassification of $47 million from Income tax expense (benefit) to Income tax (expense) benefit.

Note 2. Pro Forma Transaction Adjustments and Assumptions

Statement of Operations for the nine months ended September 30, 2024:

 

  (a)

Reflects the adjustment to revenue, depreciation and amortization and fuel, purchased power costs and delivery fees for the amortization related to intangible assets acquired.

 

  (b)

Reflects the adjustment to accretion expense related to the recalculation of the assets retirement obligations using Vistra’s credit-adjusted risk-free rate.

 

  (c)

Reflects the incremental depreciation expense related to the step-up in the fair value measurement of the Energy Harbor nuclear assets, including nuclear fuel. The remaining estimated depreciable lives of the nuclear assets range from 12 to 24 years. The remaining estimated depreciable lives of the nuclear fuel is 3 years.

 

  (d)

Reflects the adjustment to selling, general and administrative expenses for the transaction costs which were contingent on the closing of the acquisition and were therefore incurred contemporaneously with the closing and not considered an incurred expense by Vistra or Energy Harbor.

 

  (e)

Reflects the estimated income tax impact of the pro forma adjustments from the Merger at the estimated blended federal and state statutory tax rate of approximately 22.7% for the nine months ended September 30, 2024. Because the tax rates used for these Unaudited Pro Forma Combined Consolidated financial statements are an estimate, the blended rate will likely vary from the actual effective rate.

 

  (f)

Reflects the adjustment to Net (income) loss attributable to noncontrolling interest for the 15% equity in Vistra Vision which was issued to certain shareholders of Energy Harbor as part of the Consideration.

Note 3. Financing Adjustments

Vistra entered into additional financing transactions to effectuate the Merger. On February 29, 2024 Vistra drew down the entire $750 million available under the Accounts Receivable Financing Facility, the $125 million available under the Repurchase Facility, and $500 million available under the Commodity-Linked Facility. The remaining amount was funded with cash on hand. The actual amount of interest expense incurred could differ from the amount of interest expense reflected in the Unaudited Pro Forma Combined Consolidated Financial Information and are subject to change.

Statement of Operations for the nine months ended September 30, 2024:

For pro forma purposes, interest expense, including amortization of fees, is calculated based on the pro forma period presented under the Repurchase Facility, which assumes Secured Overnight Financing Rate (“SOFR”) or another base rate plus an applicable margin, the Receivables Facility, and the Commodity-Linked Facility.

 

  (a)

Reflects the net increase to interest expense and related charges resulting from the draw on the Receivables Facility, Repurchase Facility, and the Commodity-Linked Facility to effectuate the Transactions as follows:

 

     Nine Months Ended  
     September 30, 2024  
     (Millions of Dollars)  

Interest expense and related charges for Receivables Facility

    $ 8  

Interest expense and related charges for Repurchase Facility

      1  

Interest expense and related charges for Commodity-Linked Facility

      5  
  

 

 

  

Net increase to Interest expense and other charges

    $ 14  

A 0.125% change in the variable interest rate of the Repurchase Facility and Commodity-Linked Facility would increase or decrease interest expense by less than $1 million for both the Repurchase Facility and Commodity-Linked Facility in the Unaudited Pro Forma Combined Consolidated Statement of Operations for the nine months ended September 30, 2024.

 

  (b)

Reflects the estimated income tax impact of the financing pro forma adjustments at the estimated blended federal and state statutory tax rate of approximately 22.7% for the nine months ended September 30, 2024. Because the tax rates used for these Unaudited Pro Forma Combined Consolidated financial statements are an estimate, the blended rate will likely vary from the actual effective rate.

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Nov. 19, 2024
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Entity Central Index Key 0001692819
Document Type 8-K
Document Period End Date Nov. 19, 2024
Entity Registrant Name VISTRA CORP.
Entity Incorporation State Country Code DE
Entity File Number 001-38086
Entity Tax Identification Number 36-4833255
Entity Address, Address Line One 6555 Sierra Drive
Entity Address, City or Town Irving
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75039
City Area Code (214)
Local Phone Number 812-4600
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Pre Commencement Issuer Tender Offer false
Security 12b Title Common stock, par value $0.01 per share
Trading Symbol VST
Security Exchange Name NYSE
Entity Emerging Growth Company false
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