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Item 1A. Risk Factors

2025-02-28 compared with 2024-02-29 · 113 added, 116 removed, 591 unchanged (28% of the section changed)

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• Tax legislation initiatives or challenges to our tax positions, or potential future legislation or the imposition of new or increased taxes or fees, could have a material adverse effect on our financial condition, results of operations, and cash flows.

• If electricity demand does not grow at the rate expected, or if we are unable to execute on large load offtake opportunities, our financial performance, growth opportunities, and stock price could be adversely impacted.

Regulatory and Legislative Risks

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• Our cost of compliance with existing and new environmental laws could have a material adverse effect on us.

• Pending or proposed laws or regulations, or the repeal of existing beneficial laws or regulations, including those proposed or implemented under the Biden administration, could have a material adverse effect on our businesses, results of operations, liquidity and financial condition.

• Pending or proposed laws or regulations, or the repeal of existing beneficial laws or regulations, including those proposed or implemented under the Trump administration, could have a material adverse effect on our businesses, results of operations, liquidity and financial condition.

• Changes to laws, rules or regulations related to market structures in the markets in which we participate may have a material adverse effect on our businesses, results of operation, liquidity and financial condition.

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Attacks on our infrastructure that breach cyber/data security measures could expose us to significant liabilities, reputational damage, regulatory action, and disrupt business operations, which could have a material adverse effect on us.

• We may suffer material losses, costs and liabilities due to operational risks, regulatory risks, and the risk of nuclear accidents arising from the ownership and operation of the Comanche Peak nuclear generation facility.

• The operation and maintenance of power generation facilities and related mining operations are capital intensive and involve significant risks that could adversely affect our results of operations, liquidity and financial condition.

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Demand for electricity can fluctuate dramatically, creating periods of substantial under- or over-supply.

Over-supply can occur as a result of the construction of new power generation sources, as we have observed in recent years.

Over-supply can occur as a result of the construction of new power generation sources.

During periods of over-supply, electricity prices might be depressed.

For example, the cost of electricity from renewable resources, such as solar, wind and battery ESS, has dropped substantially in recent years.

In many instances, energy from these sources are bid into the relevant spot market at a price of zero or close to zero during certain times of the day, lowering the clearing price for all power wholesalers in such market.

For example, in many instances, energy from renewable resources, such as solar, wind and battery ESS, are bid into the relevant spot market at a price of zero or close to zero during certain times of the day, lowering the clearing price for all power wholesalers in such market.

Also, at times there is political pressure, or pressure from regulatory authorities with jurisdiction over wholesale and retail energy commodity and transportation rates, to impose price limitations, bidding rules and other mechanisms to address volatility and other issues in these markets.

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Additionally, there may be changes to existing laws or regulations that could significantly impact our ability to effectively hedge, which may have a material adverse effect on us.

With the continued tightening of credit markets that began in 2008 and expansion of regulatory oversight through various financial reforms, there has been a decline in the number of market participants in the wholesale energy commodities markets, resulting in less liquidity.

Notably, participation by financial institutions and other intermediaries (including investment banks) in such markets has declined.

Extended declines in market liquidity could adversely affect our ability to hedge our financial exposure to desired levels.

To the extent we engage in hedging and risk management, and power purchase agreement activities, we are exposed to the credit risk that counterparties that owe us money, energy or other commodities as a result of these activities will not perform their obligations to us.

Should the counterparties to these arrangements fail to perform, we could be forced to enter into alternative hedging arrangements or honor the underlying commitment at then-current market prices.

Additionally, our counterparties may seek bankruptcy protection under Chapter 11 or liquidation under Chapter 7 of the Bankruptcy Code.

Additionally, our counterparties may seek bankruptcy protection under Chapter 11 or liquidation under Chapter 7 of the U.S.

Bankruptcy Code.

Our credit risk may be exacerbated to the extent collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount due to us.

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We do not apply hedge accounting to our commodity derivative transactions, which may cause increased volatility in our quarterly and annual financial results.

We engage in economic hedging activities to manage our exposure related to commodity price fluctuations through the use of financial and physical derivative contracts for commodities.

These derivatives are accounted for in accordance with GAAP, which requires that we record all derivatives on the balance sheet at fair value with changes in fair value immediately recognized in earnings as unrealized gains or losses.

GAAP permits an entity to designate qualifying derivative contracts as normal purchases and sales.

If designated, those contracts are not recorded at fair value.

GAAP also permits an entity to designate qualifying derivative contracts in a hedge accounting relationship.

If a hedge accounting relationship is used, a significant portion of the changes in fair value is not immediately recognized in earnings.

We have elected not to apply hedge accounting to our commodity contracts, and we have designated contracts as normal purchases and sales in only limited cases, such as certain retail sales contract portfolios.

As a result, our quarterly and annual financial results in accordance with GAAP are subject to significant fluctuations caused by changes in forward commodity prices.

We enter derivative instruments to manage commodity price risks.

All our derivatives are accounted for as economic hedges and are recorded at estimated fair value in the consolidated balance sheets with changes in fair value recorded as gains or losses in the earnings of the period in which they occur.

No derivative positions are accounted for as cash flow or fair value hedges.

A derivative contract may be designated as a normal purchase or sale if the commodity is to be physically received or delivered for use or sale in the normal course of business.

If designated as normal, the derivative contract is accounted for under the accrual method of accounting (not marked-to-market) with no balance sheet or income statement recognition of the contract until settlement.

While certain retail sales contract portfolios are designated as normal, the majority of our derivative positions are subject to adjustments caused by changes in forward commodity prices.

As a result, our quarterly and annual financial results, prepared in accordance with GAAP, are subject to increased volatility.

Competition, changes in market structure, and/or state or federal interference in the wholesale and retail power markets, together with subsidized generation, may have a material adverse effect on our financial condition, results of operations and cash flows.

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The competitive wholesale marketplace may be undermined by changes in market structure and out-of-market subsidies provided by federal or state entities, including bailouts of uneconomic plants, imports of power from Canada, renewable mandates or subsidies, as well as out-of-market payments to new generators.

Multiple potential changes have been and are being evaluated by the PUCT and the Texas legislature for the ERCOT market, including the PCM that would align a required reliability standard with resource availability during higher-risk system conditions, the ultimate resolution of which is unknown.

Multiple potential changes have been and are being evaluated by the PUCT and the Texas Legislature for the ERCOT market, including Dispatchable Reliability Reserve Service that would facilitate compliance with a required reliability standard, the ultimate resolution of which is unknown.

In another example, the resolution of a number of filings pending at FERC could impact PJM capacity market rules in future years.

Our power generation business competes with other non-utility generators, regulated utilities, unregulated subsidiaries of regulated utilities, other energy service companies and financial institutions in the sale of electric energy, capacity and ancillary services, as well as in the procurement of fuel, transmission and transportation services.

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The convergence of current global conditions, including sustained inflation, elevated interest rates, and the geopolitical climate, has and could lead to, or accelerate or exacerbate the occurrence of, a significant economic downturn, as well as changes in consumer and counterparty behavior, higher costs of capital, decreases in the value of our existing long-dated contracts, commodity price increases and volatility, supply chain shortages, and other adverse impacts to our business.

Additionally, prolonged economic downturns that negatively impact our financial condition, results of operations and cash flows could result in future material impairment charges to write down the carrying value of certain assets to their respective fair values.

For example, the U.S.

administration has taken action or may take action in the future with respect to major changes to trade policies, such as the imposition of tariffs on imported products and the withdrawal from or renegotiation of certain trade agreements.

Any such material changes in trade policies, including the imposition of tariffs, could lead to increased supply chain disruptions and increased supply chain costs, which could have a material adverse impact on our business, financial condition and results of operations.

Our liquidity needs could be difficult to satisfy, particularly during times of uncertainty in the financial markets or during times of significant fluctuation in commodity prices, and we may be unable to access capital on favorable terms or at all in the future, which could have a material adverse effect on us.

We currently maintain non-investment grade credit ratings that could negatively affect our ability to access capital on favorable terms or result in higher collateral requirements, particularly if our credit ratings were to be downgraded in the future.

Vistra currently maintains non-investment grade credit ratings that could negatively affect our ability to access capital on favorable terms or result in higher collateral requirements, particularly if our credit ratings were to be downgraded in the future.

Our businesses are capital intensive.

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Limitations on our access to, or increases in our cost of, capital could have a material adverse effect on us.

In addition, we currently maintain non-investment grade credit ratings.

In addition, Vistra currently maintains non-investment grade credit ratings.

As a result, we may not be able to access capital on terms (financial or otherwise) as favorable as companies that maintain investment-grade credit ratings or we may be unable to access capital at all at times when the credit markets tighten.

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The agreements and instruments governing our debt, including the Vistra Operations Credit Facilities and indentures, contain restrictions and limitations that could affect our ability to operate our business, or liquidity, and results of operations, and any failure to comply with these restrictions could have a material adverse effect on us.

The agreements and instruments governing our debt, including the Vistra Operations Credit Facilities and indentures, contain restrictions that could adversely affect us by limiting our ability to operate our businesses and plan for, or react to, market conditions or to meet our capital needs and could result in an event of default under the Vistra Operations Credit Facilities and/or indentures.

The Vistra Operations Credit Facilities and indentures contain events of default customary for financings of this type.

If we fail to comply with the covenants in the Vistra Operations Credit Facilities and/or indentures and are unable to obtain a waiver or amendment, or a default exists and is continuing, the lenders under such agreements or notes, as the case may be, could give notice and declare outstanding borrowings thereunder immediately due and payable.

The Vistra Operations Credit Facilities, indentures and our other debt facilities contain events of default customary for financings of such type.

If we fail to comply with the covenants in the Vistra Operations Credit Facilities, indentures and/or our other debt facilities and are unable to obtain a waiver or amendment, or a default exists and is continuing, the lenders under such agreements or notes, as the case may be, could give notice and declare outstanding borrowings thereunder immediately due and payable.

The breach of any covenants or obligations in certain agreements and instruments governing our debt, including the Vistra Operations Credit Facilities and indentures, not otherwise waived or amended, could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our debt, and any such acceleration of outstanding borrowings could have a material adverse effect on us.

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A material increase in the amount of letters of credit or cash collateral required to be provided to our counterparties may have a material adverse effect on us.

The Transactions (as defined below) remain subject to customary closing conditions which, if not satisfied or waived, would delay the Transactions or adversely impact our ability to complete the Transactions on the terms set forth in the Transaction Agreement (as defined below) or at all.

The completion of the Transactions remain subject to the satisfaction or waiver of customary closing conditions.

These closing conditions may not be fulfilled in a timely manner or at all, and, accordingly, the Transactions may not be completed.

If we are unable to complete the Transactions, we still will incur and will remain liable for significant transaction costs, including legal, accounting, advisory and other costs relating to the Transactions.

Also, depending upon the reasons for not completing the Transactions, we may be required to pay Energy Harbor a termination fee of $225 million.

If such a termination fee is payable, the payment could affect Vistra's share price.

Failure to consummate the Transactions as currently contemplated or at all could adversely affect the price of Vistra's common stock and our future business and financial results.

We cannot guarantee when or if these conditions will be satisfied or that the Transactions will be successfully completed.

If the Transactions are not consummated, or are consummated on different terms than as contemplated by the Transaction Agreement, we could be adversely affected and subject to a variety of risks associated with the failure to consummate the Transactions, or to consummate the Transactions as contemplated by the Transaction Agreement, including:

• our stockholders may be prevented from realizing the anticipated potential benefits of the Transactions;

• the market price of our common stock could decline significantly;

• reputational harm due to the adverse public perception of any failure to successfully complete the Transactions;

• under certain circumstances, we may be required to pay Energy Harbor a termination fee of up to $225 million or reimburse Energy Harbor's expenses up to $20 million;

• the attention of our management and employees may be diverted from their day-to-day business and operational matters and our relationships with our customers and suppliers may be disrupted as a result of efforts relating to attempting to consummate the Transactions.

Any delay in the consummation of the Transactions, any uncertainty about the consummation of the Transactions on terms other than those contemplated by the Transaction Agreement and any failure to consummate the Transactions could adversely affect our business, financial results and common stock price.

Following the completion of the Transactions, we may be unable to successfully integrate Energy Harbor's businesses with Vistra's nuclear and retail businesses and its Vistra Zero renewable and battery ESS projects or realize the anticipated synergies and other expected benefits of the Transactions on the anticipated timeframe or at all.

The Transactions involve the combination of Energy Harbor's nuclear and retail businesses with Vistra's nuclear and retail businesses and certain of Vistra Zero renewables and battery ESS projects under Vistra Vision.

This new combination expects to benefit from certain cost savings, operating efficiencies and a growing renewables and battery ESS portfolio, some of which will take time to realize.

We will be required to devote significant management attention and resources to the integration of our and Energy Harbor's business practices and operations into Vistra Vision.

The potential difficulties we may encounter in building Vistra Vision include the following:

• the inability to successfully combine our nuclear, retail, renewables and battery storage business and Energy Harbor's nuclear and retail businesses in a manner that permits Vistra Vision to achieve the cost savings anticipated to result from the Transactions, which would result in the anticipated benefits of the Transactions not being realized in the timeframe currently anticipated or at all;

• the complexities associated with maintaining the second-largest competitive nuclear fleet in the U.S.;

• the complexities of combining two companies with different histories, geographic footprints and asset mixes;

• the complexities in combining two companies with separate technology systems;

• potential unknown liabilities and unforeseen increased expenses, delays or conditions associated with the Transactions;

• failure to perform by third-party service providers who provide key services for the combined company;

• performance shortfalls as a result of the diversion of management’s attention caused by completing the Transactions and integrating the companies' operations.

For all these reasons, it is possible that the integration process could result in the distraction of our management, the disruption of our ongoing business or inconsistencies in operations, services, standards, controls, policies and procedures, any of which could adversely affect our ability to maintain relationships with operators, vendors and employees, to achieve the anticipated benefits of the Transactions, or could otherwise materially and adversely affect its business and financial results.

We may not be able to complete future acquisitions on favorable terms or at all, successfully integrate future acquisitions into our business, or effectively identify and invest in value-creating businesses, assets or projects, which could result in unanticipated expenses and losses or otherwise hinder or delay our growth strategy.

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Further, the recent proliferation of renewable projects has resulted in a large volume of interconnection requests submitted to grid operators, including the markets in which we operate, resulting in significant delays to the approval process and estimated completion dates for our projects and others.

FERC and regional ISOs are working to address these backlogs, including with potential regulatory rule changes, which would change the interconnection process, the results of which are currently unknown.

FERC and regional ISOs are working to address these backlogs, including with regulatory rule changes, changing the interconnection process, the impacts of which are currently unknown because the changes have only been partially implemented.

Additionally, the increased demand for construction of renewables projects, such as battery ESS and solar projects, and other labor market and supply chain constraints have resulted, and may continue to result, in limited availability of qualified specialists, contractors, and necessary services or materials, leading to delays in and higher costs for the development and construction of our current and future planned projects.

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If our goodwill, intangible assets, or long-lived assets become impaired, we may be required to record a significant charge to earnings.

We have significant goodwill, intangible assets and long-lived assets recorded on our balance sheet.

In accordance with U.S.

GAAP, goodwill and non-amortizing intangible assets are required to be tested for impairment at least annually.

Additionally, we review goodwill, our intangible assets and long-lived assets for impairment when events or changes in circumstances indicate the carrying value of the asset may not be recoverable.

Factors that may be considered include a decline in future cash flows, slower growth rates in the energy industry, and a sustained decrease in the price of our common stock.

We performed our annual assessment of goodwill and non-amortizing intangibles in the fourth quarter of 2023 and determined that no material impairment was required.

However, impairment assessments will be performed in future periods and may result in an impairment loss, which could be material.

Goodwill and intangible assets with indefinite useful lives, such as the intangible asset related to our retail trade names are not amortized and are subject to impairment testing annually, or when events or changes in the business environment indicate that the carrying value of the reporting unit may exceed its fair value.

Additionally, we evaluate long-lived assets (including intangible assets with finite lives) for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Any reduction in or impairment of the value of goodwill, intangible assets, or other long-lived assets will result in a charge against earnings, which could materially adversely affect our reported results of operations and financial position in future periods.

If an impairment of goodwill, intangible assets with indefinite useful lives, or long-lived assets is realized, it may result in a significant charge to earnings in the respective quarterly or annual financial results prepared in accordance with GAAP.

Issuances or acquisitions of our common stock, or sales or dispositions of our common stock by stockholders, that result in an ownership change as defined in Internal Revenue Code (IRC) § 382 could further limit our ability to use certain tax attributes and our federal net operating losses to offset our future taxable income.

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federal income tax laws or the imposition of new or increased taxes or fees could have a material adverse effect on our financial condition, results of operations and cash flows.

If electricity demand does not grow at the rate expected, or if we are unable to execute on large load offtake opportunities, our financial performance, growth opportunities, and stock price could be adversely impacted.

Multiple demand drivers such as emergence of large load data centers, including in response to transformations in technologies like artificial intelligence (AI) and electrification of oil field operations (specifically in the Permian Basin of west Texas), have accelerated, and are expected to continue to accelerate, load growth in the geographic regions we serve.

We continue to pursue opportunities for the potential sale of power from our existing or new nuclear and gas facilities pursuant to long-term agreements to supply large load facilities.

Such potential transactions are subject to certain risks and uncertainties, including various currently contemplated or future potential regulatory actions, reviews, and/or approvals and legislative actions, which could impact the timing of, and our ability to consummate, a potential transaction.

In addition, if demand does not continue to increase at a rate in line with market expectations due to various factors, such as changes in technology, more energy efficient AI solutions or slow adoption of AI products and services, economic downturns, or adverse government actions, or if we are unable to execute on such large load offtake opportunities, our opportunities for growth and stock price may be adversely impacted.

Regulatory and Legislative Risks

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For example, as a result of Winter Storm Uri, we received a civil investigative demand from the Attorney General of Texas as well as a request for information from ERCOT, NERC, and other regulatory bodies related to this event.

Winter Storm Elliott, in December 2022, has also led to regulatory requests for information and notices of investigation by NERC, FERC, regional reliability entities, and independent market monitors for regions across the country.

Winter Storm Elliott, in December 2022, also led to regulatory requests for information and notices of investigation by NERC, FERC, regional reliability entities, and independent market monitors for regions across the country.

Such investigations have resulted, and in the future may result, in changes in laws or regulations that impact our industry and businesses including, but not limited to, additional requirements for winterization of various facets of the electricity supply chain including generation, transmission, and fuel supply;

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and other potential legislative and regulatory corrective actions that may be taken.

Previously announced or future legal proceedings, regulatory actions, investigations, or other administrative proceedings involving market participants may lead to adverse determinations or other findings of violations of laws, rules, or regulations, any of which may impact the ability of market participants to satisfy, in whole or in part, their respective obligations.

The Texas Legislature, the PUCT, and ERCOT have implemented new requirements and continue to consider future market design and other rule changes in response to Winter Storm Uri and other extreme weather events.

Previously announced or future legal proceedings, regulatory actions, or other administrative proceedings involving market participants may lead to adverse determinations or other findings of violations of laws, rules, or regulations, any of which may impact the ability of market participants to satisfy, in whole or in part, their respective obligations.

For example, the Texas Legislature, the PUCT, ERCOT, FERC, and NERC have implemented new requirements and continue to consider future market design and other rule changes in response to Winter Storm Uri and other extreme weather events.

Finally, the regulatory environment has undergone significant changes in the last several years due to state and federal policies affecting wholesale and retail competition and the creation of incentives for the addition of large amounts of new renewable generation.

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Any of the foregoing could have a material adverse effect on us.

The EPA has recently finalized or proposed several regulatory actions establishing new requirements for control of certain emissions from sources, including electricity generation facilities.

The Biden Administration recently finalized or proposed several regulatory actions establishing new requirements for control of certain emissions from sources, including electricity generation facilities.

In the future, the EPA may also propose and finalize additional regulatory actions that may adversely affect our existing generation facilities or our ability to cost-effectively develop new generation facilities.

There is no assurance that the currently installed emissions control equipment at our lignite, coal and/or natural gas-fueled generation facilities will satisfy the requirements under any future EPA or state environmental regulations.

Some of the recent regulatory actions, such as the EPA's Good Neighbor Plan for the 2015 Ozone NAAQS, May 2023 proposal to regulated GHG emissions that would replace the ACE rule, and actions under the Regional Haze program, could require us to install significant additional control equipment, resulting in potentially material costs of compliance for our generation units, including capital expenditures, higher operating and fuel costs and potential production curtailments or plant retirements.

Some of the recent regulatory actions, such as the EPA's Good Neighbor Plan for the 2015 Ozone NAAQS, the final rule to regulated GHG emissions that would replace the ACE rule, and actions under the Regional Haze program, could require us to install significant additional control equipment, resulting in potentially material costs of compliance for our generation units, including capital expenditures, higher operating and fuel costs and potential production curtailments or plant retirements.

These costs or operation impacts could have a material adverse effect on us.

In January 2025, President Trump issued a series of executive orders, including an order titled Unleashing American Energy (the "Order") that ordered that all federal agencies are to review all existing regulations, orders and other actions for consistency with the policy goals in that Order, and develop an action plan within 30 days to resolve any policy inconsistencies.

In addition, the Order stated that the U.S.

Attorney General may request stays of litigation involving any identified rules or actions from the review.

We expect the Trump Administration to review the recent actions of the Biden Administration, but the outcome of those actions is uncertain.

We may not be able to obtain or maintain all required environmental regulatory approvals.

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Supreme Court's opinion.

The EPA is in the process of developing a more stringent and more encompassing rule to replace the ACE rule in its remand proceeding and has been directed by the Biden Administration to review this rule and others promulgated by the EPA during the Trump Administration.

Prior to the vacatur and remand by the D.C.

Circuit Court, states where we operate coal plants (Texas, Illinois and Ohio) had begun the development of their state plans to comply with the ACE rule.

In May 2024, the EPA issued a more stringent and more encompassing rule to replace the ACE rule.

The GHG rule issued in May 2024 is currently being challenged in the D.C.

Circuit after the U.S.

Supreme Court declined to issue a stay of that rule.

We expect the Trump Administration to review the May 2024 GHG rule.

Additionally, pursuant to the Order, the Administrator of the EPA, in collaboration with the heads of any other relevant agencies, will submit joint recommendations to the Director of the Office of Management and Budget on the legality and continuing applicability of the December 2009 Endangerment Finding.

In addition, a number of federal court cases have been filed in recent years asserting damage claims related to GHG emissions, and the results in those proceedings could establish adverse precedent that might apply to companies (including us) that produce GHG emissions.

We could be materially and adversely affected if new federal and/or state legislation or regulations are adopted to address global climate change that could require efforts that exceed or are more expensive than our currently planned initiatives or if we are subject to lawsuits for alleged damage to persons or property resulting from GHG emissions.

We could be materially and adversely affected if federal and/or state legislation or regulations that address global climate change require efforts that exceed or are more expensive than our currently planned initiatives or if we are subject to lawsuits for alleged damage to persons or property resulting from GHG emissions.

Additionally, in January 2021, President Biden issued written notification to the United Nations of the U.S.'s intention to rejoin the Paris Agreement, effective in February 2021.

Although the Paris Agreement does not create any binding obligations for nations to limit their GHG emissions, it does include pledges to voluntarily limit or reduce future emissions, and various corporations, investors and U.S.

states and local governments have previously pledged to further the goals of the Paris Agreement.

Additionally, the Biden Administration has directed certain agencies to submit a plan to the National Climate Task Force to achieve a carbon-pollution-free electricity sector by 2035.

The Company's plan to transition to clean power generation sources and reduce its GHG emissions may not be completed in this timeframe and we may not otherwise achieve our sustainability and emissions reduction targets as expected.

Accordingly, we may be required to accelerate or change our targets, incur additional expenses, and/or adjust or cease certain operations as a result of newly implemented federal and/or state regulations to reduce future carbon emissions.

However, in January 2025, President Trump signed an Executive Order announcing the withdrawal from the Paris Agreement.

Luminant's mining operations are subject to RCT oversight.

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Luminant's lignite mining reclamation activity will require significant resources as existing and retired mining operations are reclaimed over the next several years.

In conjunction with Luminant's announcements in 2017 to retire several power generation assets and related mining operations, along with the continuous reclamation activity at its continuing mining operations for its mines related to the Oak Grove generation asset, Luminant is expected to spend a significant amount of money, internal resources and time to complete the required reclamation activities.

In conjunction with Luminant's announcements in 2017 to retire several power generation assets and related mining operations, along with the reclamation obligations at the closed Martin Lake mines and continuous reclamation activity at its continuing mining operations for its mines related to the Oak Grove generation asset, Luminant is expected to spend a significant amount of money, internal resources and time to complete the required reclamation activities.

For the next five years, Vistra is projected to spend approximately $238 million (on a nominal basis) to achieve its mining reclamation objectives.

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Some of these competitors or potential competitors may be larger than we are or have greater resources or access to capital than we have.

Competitors may also incorporate AI into their businesses, services, and products more quickly or more successfully than we do.

Competitors may also incorporate emerging technology like generative AI into their businesses, services, and products more quickly or more successfully than we do.

In retail markets with substantial competition, high customer acquisition costs may outweigh the potential margin and it may not be profitable for us to compete in these markets.

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Further, our retail business requires us to regularly access, collect, store, and transmit customer data, including sensitive customer data.

New data privacy and data protection laws and regulations, increased enforcement, and other government actions could impact our businesses and failure to comply with them could adversely affect our business and financial results.

New data privacy and data protection laws and regulations, increased enforcement, and other government actions could impact our businesses, increase compliance costs, and failure to comply with these laws and regulations could adversely affect our business and financial results.

Our retail business may need to provide access to customer data, including sensitive customer data, to third parties and service providers to provide services, such as call center operations.

Under new data protection laws, in certain circumstances, Vistra could incur liability for a third-party or service provider's misuse or loss of the data.

In certain circumstances, Vistra could incur liability for a third-party or service provider's misuse or loss of the data.

Although we take precautions to protect our infrastructure, we have been, and will likely continue to be, subject to attempts at phishing and other cybersecurity intrusions.

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However, we recognize the growing threat within the general marketplace and our industry, especially as generative AI becomes more widely used by threat actors.

There is no assurance that we will be able to prevent any such impacts in the future.

There is no assurance that we will be able to prevent or mitigate any such impacts in the future.

In the event of a material cyber breach, critical operational capabilities to support our generation, commercial, or retail operations could be disrupted or lost.

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Our efforts to deter, identify, and mitigate future breaches may require additional, significant capital and operating costs and may not be successful.

We may suffer material losses, costs and liabilities due to operation risks, regulatory risks, and the risk of nuclear accidents arising from the ownership and operation of the Comanche Peak nuclear generation facility.

We own and operate a nuclear generation facility in Glen Rose, Texas (Comanche Peak Facility).

The ownership and operation of a nuclear generation facility involves certain risks.

We may suffer material losses, costs and liabilities due to operation risks, regulatory risks, and the risk of nuclear accidents arising from the ownership and operation of the nuclear generation facilities.

We own and operate nuclear generation facilities in Texas, Ohio, and Pennsylvania.

The ownership and operation of nuclear generation facilities involves certain risks.

These risks include:

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• the costs of, and liabilities relating to, storage, handling, treatment, transport, release, use and disposal of radioactive materials;

• the costs of procuring nuclear fuel, including impacts from restrictions on imports from Russia or China (see Item 7.

• the costs of procuring nuclear fuel, including impacts from trade restrictions such as tariffs, embargoes, and quotas (see Item 7.

Management's Discussion and Analysis of Financial Condition, and Results of Operations – Significant Activities and Events, and Items Influencing Future Performance – Macroeconomic Conditions );

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• the impact of a natural disaster;

• financial risk associated with retrospective insurance premium that could become due under secondary coverage required by the Price Anderson Act;

• limitations on the amounts and types of insurance coverage commercially available;

• uncertainties with respect to the technological and financial aspects of modifying or decommissioning nuclear facilities at the end of their useful lives.

Any prolonged unavailability of the Comanche Peak Facility could have a material adverse effect on our results of operation, cash flows, financial position and reputation.

Our financial performance could be materially and negatively affected by matters arising from our ownership and operation of nuclear facilities, including any prolonged unavailability of any of our nuclear generation facilities.

The following are among the more significant related risks:

• Operational Risk — Operations at any generation facility could degrade to the point where the facility would have to be shut down.

If such degradations were to occur at the Comanche Peak Facility, the process of identifying and correcting the causes of the operational downgrade to return the facility to operation could require significant time and expense, resulting in both lost revenue and increased fuel and purchased power expense to meet supply commitments.

Furthermore, a shut-down or failure at any other nuclear generation facility could cause regulators to require a shut-down or reduced availability at the Comanche Peak Facility.

• Regulatory Risk — The NRC may modify, suspend or revoke licenses and impose civil penalties for failure to comply with the Atomic Energy Act, the regulations under it or the terms of the licenses of nuclear generation facilities.

Unless extended, as to which no assurance can be given, the NRC operating licenses for the two licensed operating units at the Comanche Peak Facility will expire in 2030 and 2033, respectively.

Changes in regulations by the NRC, as well as any extension of our operating licenses, could require a substantial increase in capital expenditures or result in increased operating or decommissioning costs.

• Nuclear Accident Risk — Although the safety record of the Comanche Peak Facility and other nuclear generation facilities generally has been very good, accidents and other unforeseen problems have occurred both in the U.S.

• Operational Risk.

Operations at any generation facility could degrade to the point where the facility would have to be shut down.

If such degradations were to occur at a nuclear generation facility, the process of identifying and correcting the causes of the operational downgrade to return the facility to operation could require significant time and expense, resulting in both lost revenue and increased fuel and purchased power expense to meet supply commitments.

Furthermore, a shut-down or failure at any other nuclear generation facility could cause regulators to require a shut-down or reduced availability at our nuclear generation facilities.

• Regulatory Risk.

The NRC may modify, suspend or revoke licenses and impose civil penalties for failure to comply with the Atomic Energy Act, the regulations under it or the terms of the licenses of nuclear generation facilities.

Unless extended, as to which no assurance can be given, the NRC operating license for the unit at the Perry Facility will expire in 2026, and is pending a license renewal application subject to review by the NRC.

Changes in regulations by the NRC could require a substantial increase in capital expenditures or result in increased operating or decommissioning costs.

• Spent Nuclear Fuel Storage .

Our nuclear operations produce various types of nuclear waste materials, including spent nuclear fuel.

The availability of a national repository for the storage of spent nuclear fuel and the timing of that facility opening will significantly affect the costs associated with storage of spent nuclear fuel and the ultimate amounts received from the DOE to reimburse us for these costs.

Any regulatory action relating to the timing and availability of a repository for spent nuclear fuel could adversely affect our ability to decommission fully our nuclear units.

We cannot predict whether a fee may be established or to what extent in the future for spent nuclear fuel disposal.

• Decommissioning Obligation and Funding .

NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available in certain minimum amounts at the end of the life of the facility to decommission the facility.

Actual costs to decommission our nuclear facilities may substantially exceed our estimates as a result of changes in the approach and timing of decommissioning activities, changes in decommissioning costs, changes in federal or state regulatory requirements, other changes in our estimates or ability to effectively execute on our planned decommissioning activities.

Forecasting trust fund investment earnings and costs to decommission nuclear generating stations requires significant judgment, and actual results could differ significantly from current estimates.

In addition, financial market performance directly affects the asset values in the NDT trust funds.

If the investments held by our PJM NDT funds are not sufficient to fund the decommissioning of our nuclear units, we could be required to take steps, such as providing financial guarantees through letters of credit or parent company guarantees or making additional contributions to the trusts, which could be significant, to ensure that the trusts are adequately funded and that current and future NRC minimum funding requirements are met.

• Nuclear Accident Risk.

Although the safety record of our nuclear generation facilities generally has been very good, accidents and other unforeseen problems have occurred at nuclear stations both in the U.S.

and elsewhere.

The consequences of an accident can be severe and include loss of life, injury, lasting negative health impacts and property damage.

Any accident, or perceived accident, could result in significant liabilities and damage our reputation.

Any such resulting liability from a nuclear accident could exceed our resources, including insurance coverage, and could ultimately result in the suspension or termination of power generation from the Comanche Peak Facility.

Any accident, or perceived accident, could result in significant liabilities that may exceed our resources, including insurance coverages, and could damage our reputation.

Such liabilities to third parties are currently covered by a primary layer of financial protection required by the Price Anderson Act in the form of insurance carried by the owners of each nuclear facility and by a secondary layer of insurance coverage into which each nuclear licensee in the country is required to contribute in the event of an accident at any facility which exceeds the primary level of coverage for that facility.

Our potential exposure for the secondary layer of coverage is currently capped at $165.9 million per reactor but is subject to adjustment for inflation, and the total retrospective premium per reactor per incident is capped at $24.7 million in any one year.

Such accidents could also result in property damage to our nuclear plant and equipment, which could exceed coverage available under insurance provided by Nuclear Electric Insurance Limited.

If a serious nuclear incident were to occur, our business, reputation, financial condition and results of operations could be materially adversely affected.

The operation and maintenance of power generation facilities and related mining operations are capital intensive and involve significant risks that could adversely affect our results of operations, liquidity and financial condition.

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In addition to natural risks such as extreme weather, earthquake, flood, lightning, hurricane and wind, other human-made hazards, such as nuclear accidents, dam failure, gas or other explosions, mine area collapses, fire, structural collapse, machinery failure, and other dangerous incidents are inherent risks in our operations.

These and other hazards can cause significant personal injury or loss of life, severe damage to and destruction of property, plant and equipment, contamination of, or damage to, the environment and suspension of operations.

These and other hazards have and may in the future cause significant personal injury or loss of life, severe damage to and destruction of property, plant, and equipment, contamination of, or damage to, the environment and suspension of operations.

Further, our employees and contractors work in, and customers and the general public may be exposed to, potentially dangerous environments at or near our operations.

As a result, employees, contractors, customers, and the general public are at risk for serious injury, including loss of life.

The occurrence of any one of these events may result in us being named as a defendant in lawsuits asserting claims for substantial damages, including for environmental cleanup costs, personal injury and property damage and fines and/or penalties.

The occurrence of any one of these events has in the past and may in the future result in us being named as a defendant in lawsuits asserting claims for substantial damages, including for environmental cleanup costs, personal injury and property damage and fines and/or penalties.

We maintain an amount of insurance protection that we consider adequate, but we cannot provide any assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject and, even if we do have insurance coverage for a particular circumstance, we may be subject to a large deductible and maximum cap.

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These federal and state laws, regulations and other legal requirements may require or result in additional expenditures, increased operating and maintenance costs and/or result in closure of certain power generation facilities, which could affect the results of operations, financial position and cash flows of the Company.

We have recognized ARO related to these CCR-related requirements.

We have recognized ARO liabilities related to these CCR-related requirements based on costs of closure methods that our operations and environmental services teams determined were appropriate based on the existing closure requirements at the time we recorded those ARO liabilities, and is reasonably possible for those to increase once the IEPA determines final closure requirements for our Illinois sites.

As the closure and CCR management work progresses and final closure plans and corrective action measures are developed and approved at each site, the scope and complexity of work and the amount of CCR material could be greater than current estimates and could, therefore, materially impact earnings through increased compliance expenditures.

The EPA has been directed by the Biden Administration to review a number of environmental rules adopted by the EPA during the Trump Administration, including the CCR rule, the ELG rule, the ACE rule and the particulate matter (PM) and NAAQS rules.

The EPA was directed by the Biden Administration to review a number of environmental rules adopted by the EPA during the first Trump Administration, including the CCR rule, the ELG rule, the ACE rule and the particulate matter (PM), and NAAQS rules.

All of these rules may significantly and adversely impact our existing coal fleet and may lead to accelerated plant closure timeframes.

In addition, the new GHG rule expected to be finalized this year and the PM2.5 NAAQS rule released this year along with other NAAQS that may be issued in the future have the potential to adversely impact our natural gas-fired units.

In addition, the new GHG rule and the PM2.5 NAAQS rule finalized in 2024 along with other NAAQS that may be issued in the future have the potential to adversely impact our natural gas-fired units.

In January 2025, President Trump issued an executive Order, which among other things, requires the EPA to review many of the rules issued by the Biden Administration and further instructed that the U.S.

Attorney General may request a stay of the litigation while the EPA conducts its review.

The EPA is reviewing applications submitted by us to extend closure deadlines for many of our CCR impoundments.

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We face risks related to epidemics, outbreaks or other public health events that are outside of our control, and could significantly disrupt our operations and adversely affect our financial condition.

The global or national outbreak of an illness or other communicable disease, or any other public health crisis may cause disruptions to our business and operational plans, as a result of a number of factors, including (a) a protracted slowdown of broad sectors of the economy, (b) changes in demand or supply for commodities, (c) significant changes in legislation or regulatory policy to address the pandemic (including prohibitions on certain marketing channels, moratoriums or conditions on disconnections or limits or restrictions on late fees), (d) reduced demand for electricity (particularly from commercial and industrial customers), (e) increased late or uncollectible customer payments, (f) negative impacts on the health of our workforce, (g) a deterioration of our ability to ensure business continuity (including increased vulnerability to cyber and other information technology risks as a result of a significant portion of our workforce continuing to work from home), and (h) the inability of the Company's contractors, suppliers, and other business partners to fulfill their contractual obligations.

The global or national outbreak of an illness or other communicable disease, or any other public health crisis may cause disruptions to our business and operational plans, as a result of a number of factors, including (a) a protracted slowdown of broad sectors of the economy, (b) changes in demand or supply for commodities, (c) significant changes in legislation or regulatory policy to address the pandemic (including prohibitions on certain marketing channels, moratoriums or conditions on disconnections or limits or restrictions on late fees), (d) reduced demand for electricity (particularly from commercial and industrial customers), (e) increased late or uncollectible customer payments, (f) negative impacts on the health of our workforce, (g) a deterioration of our ability to ensure business continuity (including increased vulnerability to cyber and other information technology risks), and (h) the inability of the Company's contractors, suppliers, and other business partners to fulfill their contractual obligations.

Changes in technology, increased electricity conservation efforts, or energy sustainability efforts may reduce the value of our business, introduce new or emerging risks, and may otherwise have a material adverse effect on us.

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Significant technological changes continue to impact our industry.

To grow and remain competitive, we will need to adapt to changes in available technology like generative AI, continually invest in our assets, increase generation capacity, increase our use of renewable technologies, enhance our existing offerings, and introduce new offerings to meet our current and potential customers’ changing service demands.

Competitors may incorporate AI into their businesses, services, and products more quickly or more successfully than we do.

Adopting new and sophisticated technologies may result in implementation issues, such as scheduling and supplier delays, unexpected or increased costs, technological constraints, regulatory issues, customer dissatisfaction, and other issues that could cause delays in launching new technological capabilities, which in turn could result in significant costs or reduce the anticipated benefits of the upgrades.

To grow and remain competitive, we will need to adapt to changes in available technology like generative AI, continually invest in our assets, increase generation capacity, increase our use of low-carbon technologies, enhance our existing offerings, and introduce new offerings to meet our current and potential customers’ changing service demands.

Competitors may incorporate new technologies into their businesses, services, and products more quickly or more successfully than we do.

This, in turn could result in significant costs or reduce the anticipated benefits of the technology change.

As we adopt new technologies, like AI, there is a risk that the content, analyses, recommendations, or judgments that AI applications assist in producing are alleged to be deficient, inaccurate, biased, or infringe on other’s rights or property interests.

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As such, our adoption of technology or failure to adopt technology could have a material adverse effect on our business, brand, financial condition, business strategy, and operating results.

Technological advances have improved, and are likely to continue to improve, for existing and alternative methods to produce and store power, including natural gas turbines, wind turbines, fuel cells, hydrogen, micro turbines, photovoltaic (solar) cells, batteries, concentrated solar thermal devices, novel nuclear technologies (including small modular reactors), geothermal energy (including enhanced geothermal systems and advanced geothermal systems), and long duration energy storage, along with improvements in traditional technologies.

Such technological advances may be superior to, or may not be compatible with, some of our existing technologies, investments and infrastructure, and may require us to make significant expenditures to remain competitive, and have resulted, and are expected to continue to reduce the costs of power production or storage, which may result in the obsolescence of certain of our operating assets.

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To the extent self-generation or distributed generation facilities become a more cost-effective option for customers, our financial condition, operating cash flows and results of operations could be materially and adversely affected.

Technological advances in demand-side management and increased conservation efforts have resulted, and are expected to continue to result, in a decrease in electricity demand.

Technological advances in demand-side management, large-scale residential or commercial virtual power plants, and increased conservation efforts could result in a decrease in electricity demand.

A significant decrease in electricity demand as a result of such efforts would significantly reduce the value of our generation assets.

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We may potentially be affected by emerging technologies that may over time affect change in capacity markets and the energy industry overall including distributed generation and clean technology.

Some of these emerging technologies are shale gas production, distributed renewable energy technologies, energy efficiency, broad consumer adoption of electric vehicles, distributed generation and energy storage devices.

Additionally, large-scale cryptocurrency mining is becoming increasingly prevalent in certain markets, including ERCOT, and many of these cryptocurrency mining facilities are "behind-the-meter." Such emerging technologies could affect the price of energy, levels of customer-owned generation, customer expectations and current business models and make portions of our electric system power supply and transmission and/or distribution facilities obsolete prior to the end of their useful lives.

Some of these emerging technologies are distributed renewable energy technologies, energy efficiency, broad consumer adoption of electric vehicles, distributed generation, energy storage devices, fuel cells, nuclear small modular reactors, and linear generators.

Additionally, large-scale cryptocurrency mining, AI data centers, and increased industrial electrification are becoming increasingly prevalent in certain markets, including ERCOT, and many of these facilities are "behind-the-meter." Such emerging technologies could affect the price of energy, levels of customer-owned generation, customer expectations and current business models and make portions of our electric system power supply and transmission and/or distribution facilities obsolete prior to the end of their useful lives.

These emerging technologies may also affect the financial viability of utility counterparties and could have significant impacts on wholesale market prices, which could ultimately have a material adverse effect on our financial condition, results of operations and cash flows could be materially adversely affected.

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As of December 31, 2024, we had approximately 1,940 employees covered by collective bargaining agreements.

The terms of all current collective bargaining agreements covering represented personnel engaged in lignite mining operations, lignite-, coal-, natural gas- and nuclear-fueled generation operation, as well as some battery operations, expire on various dates between March 2024 and March 2028, but remain effective thereafter unless and until terminated by either party.

The terms of all current collective bargaining agreements covering represented personnel engaged in lignite mining operations, lignite-, coal-, natural gas- and nuclear-fueled generation operation, as well as some battery operations, expire on various dates between February 2025 and March 2028, but remain effective thereafter unless and until terminated by either party.

In the event that our union employees strike, participate in a work stoppage or slowdown or engage in other forms of labor strife or disruption, we would be responsible for procuring replacement labor or we could experience reduced power generation or outages.

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These subsidiaries are separate and distinct legal entities from Vistra and have no obligation (other than any existing contractual obligations) to provide Vistra with funds to satisfy its obligations.

Any decision by a subsidiary to provide Vistra with funds to satisfy its obligations, including those under the TRA, whether by dividends, distributions, loans or otherwise, will depend on, among other things, such subsidiary's results of operations, financial condition, cash flows, cash requirements, contractual prohibitions and other restrictions, applicable law and other factors.

Any decision by a subsidiary to provide Vistra with funds to satisfy its obligations, whether by dividends, distributions, loans or otherwise, will depend on, among other things, such subsidiary's results of operations, financial condition, cash flows, cash requirements, contractual prohibitions and other restrictions, applicable law and other factors.

The deterioration of income from, or other available assets of, any such subsidiary for any reason could limit or impair its ability to pay dividends or make other distributions to Vistra.

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Companies across all industries are facing evolving expectations or increasing scrutiny from stakeholders related to their approach to ESG matters.

For Vistra, climate change, safety and stakeholder relations remain primary focus areas, and changing expectations of our practices and performance across these and other ESG areas may impose additional costs or create exposure to new or additional risks.

Our operations, projects and growth opportunities require us to have strong relationships with key stakeholders, including local communities and other groups directly impacted by our activities, as well as governments and government agencies, investor advocacy groups, certain institutional investors, investment funds and others which are increasingly focused on ESG practices.

For Vistra, reliability, affordability, safety, climate change, and stakeholder relations remain primary focus areas, and changing expectations of our practices and performance across these and other ESG areas may impose additional costs or create exposure to new or additional risks.

Certain financial institutions have announced policies to presently or in the future cease investing or to divest investments in companies that derive any or a specified portion of their income from, or have any or a specified portion of their operations in, coal and/or other fossil fuels.

While we are strategically focused on successfully adapting to the energy transition and strongly committed to our ESG practices and performance (including transparency and accountability thereof), our plans to transition to clean power generation sources and reduce our carbon footprint may not be completed in the timeframe and we may not achieve our targets as expected, which could impact stakeholder trust and confidence.

We are strategically focused on meeting growing demand for electricity as we ensure reliability and affordability while being mindful of growing stakeholder interest in our plans to transition to low-to-no carbon power generation sources.

As we work through this transition, our prioritization of reliability and affordability may prevent us from achieving our targets as expected, which could impact stakeholder trust and confidence.

Any such erosion of stakeholder trust and confidence, evolving expectations from stakeholders on such ESG issues, and such parties' resulting actions or decisions about our company and our industry could have negative impacts on our business, operations, financial results, and stock price, including:

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• loss of business or loss of market share, including to competitors who do not have any, or comparable amounts, of operations involving fossil fuels;

• loss of ability to hire and retain top talent;

• loss of ability to secure growth opportunities;

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• legal action;

• inability or limitations on ability to receive applicable government subsidies, or competitors with smaller or no fossil operations receiving subsidies for which we are not eligible, or in larger amounts;

• increased regulatory oversight;

• loss of ability to obtain and maintain necessary approvals and permits from governments and regulatory agencies on a timely basis and on acceptable terms;

• impediments on our ability to acquire or renew rights-of-way or land rights on a timely basis and on acceptable terms;

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• restricted access to and cost of capital.

• loss of ability to hire and retain top talent.

We may not pay any dividends on our common stock in the future, and we may not realize the anticipated benefits of our share repurchase program.

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The Preferred Stock is not convertible into or exchangeable for any other securities of the Company.

Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Preferred Stock will be entitled to receive, pro rata and in preference to the holders of any other capital stock, an

amount per share equal to $1,000 plus accrued and unpaid dividends thereon, if any.

Unless we have received the affirmative vote or consent of the holders of at least two-thirds of the outstanding Series A Preferred Stock, the holders of at least two-thirds of the outstanding Series B Preferred Stock and the holders of at least two-thirds of the outstanding Series C Preferred Stock, each voting as a separate class, we may not adopt any amendment to our certificate of incorporation (including the applicable Certificates of Designation) that would have a material adverse effect on the powers, preferences, duties, or special rights of such series of Preferred Stock, subject to certain exceptions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors