Item 2. Management’s Discussion and Analysis
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes included in Part I, Item 1. Financial Statements .
Business Environment and Outlook
Electricity Demand
Electricity demand drivers including the rise of large scale data centers, the electrification of oil field operations, and electric vehicle load building are contributing to a projected fast paced load growth in the regions we serve. Our integrated retail electricity and power generation operations allows us to quickly respond to electricity demand changes. To support growing demand from large‑scale electricity consumers, we continue to engage in discussions with various counterparties regarding the potential long-term sale of power from our generation facilities, and we are progressing a series of development initiatives across our generation portfolio, including nuclear uprates and other capacity expansions.
Supply Chain Constraints
Our industry continues to face ongoing supply chain constraints and labor shortages, which have reduced the availability of essential equipment and supplies for constructing new generation facilities, increased the lead times for procuring materials, and raised labor costs associated with maintaining our natural gas, nuclear, and coal fleet.
We are proactively managing these constraints by continuously re-evaluating the business cases and timing of our planned development projects. This has led to the deferral or abandonment of some planned capital expenditures for our solar and battery projects and could impact the economic feasibility of additional projects in our new generation development pipeline. We are engaging with suppliers to secure key materials needed to maintain our existing generation facilities before future planned outages.
Iran Conflict
We are monitoring the conflict involving the United States, Israel, and Iran and related instability in the Middle East, including the potential for further escalation and disruption. Although the Company does not conduct operations in the affected region, prolonged or expanded instability could indirectly affect the Company through broader macroeconomic and commodity-market impacts, including changes in natural gas and power prices, supply-chain disruptions, construction delays, increased inflationary pressures, and capital-market volatility, which could impact our future results of operations. See Factors Affecting Our Financial Condition and Results of Operations — Commodity Prices for additional information on our commodity hedging strategy and estimated hedging levels for the balance of 2026 and 2027.
Russia/Ukraine Conflict
We are monitoring developments in the Russia and Ukraine conflict, specifically sanctions (or potential sanctions) against Russian nuclear fuel supply and enrichment activities which may further impact commodity prices in Europe and globally. The Prohibiting Russian Uranium Imports Act (PRUI Act), which was signed into law on August 11, 2024, prohibits importation of Russian uranium; however, the Department of Energy can issue waivers (subject to decreasing annual caps) until December 31, 2027 if there is no alternate source of low-enriched uranium available to keep U.S. nuclear reactors operating or is in the national interest. Additionally, passage of the PRUI Act enabled the allocation of $2.72 billion in federal funding to ramp up production of domestic uranium fuel. On November 15, 2024, the Russian Federation temporarily suspended shipments of uranium to the U.S., stating that they would grant future export licenses on a case-by-case basis.
Our 2026 and 2027 refueling plans have not been affected by the Russia and Ukraine conflict, nor have we seen any disruption to the delivery of nuclear fuel impacting our refueling schedules. All nuclear fuel requirements for 2026 and 2027 is onshore and in our inventory. We work with a diverse set of global nuclear fuel cycle suppliers to procure our nuclear fuel years in advance. We have nuclear fuel contracted to support all our refueling needs through 2030 without any additional Russian deliveries. We continue to take affirmative action by building strategic inventory and deploying mitigating strategies in our procurement portfolio to ensure we can secure the nuclear fuel needed to continue to operate our nuclear facilities through potential Russian supply disruption.
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VISTRA CORP.
Noteworthy Developments
Collateral Release
On December 2, 2025, S&P upgraded Vistra Operations' issuer credit rating from BB+ to BBB- and revised its outlook from Positive to Stable, and on March 20, 2026, S&P upgraded the Senior Unsecured Notes rating from BB+ to BBB-. On March 16, 2026, Fitch upgraded Vistra Operations' issuer default rating and the Senior Unsecured Notes rating from BB+ to BBB- and revised its outlook from Positive to Stable. As a result of these investment-grade ratings and the satisfaction of certain other conditions specified in the Vistra Operations Senior Secured Indenture, an investment grade event was deemed to have occurred, and the liens on the collateral securing the Senior Secured Notes were automatically terminated and released in full on April 2, 2026 (Collateral Release).
The Collateral Release represents the elimination of the collateral and related lien provisions under the Vistra Operations Senior Secured Indenture only and did not modify, refinance, extinguish, or otherwise change the outstanding principal amount, maturity, interest rates, or other material terms of the Senior Secured Notes. Following the Collateral Release, the Senior Secured Notes are effectively unsecured and rank pari passu with the Senior Unsecured Notes. The Collateral Release is subject to reversion if the applicable rating agencies withdraw the investment-grade ratings or downgrade the ratings below investment grade, subject to a 60-day grace period.
Additionally, Vistra Operations repaid $2.444 billion in outstanding borrowings under the Term Loan B-3 facility in April 2026, and in coordination with the investment-grade ratings, met the collateral suspension provisions of the Vistra Operations Credit Agreement and Commodity-Linked Credit Agreement releasing all liens securing the Vistra Operations Credit Facilities and the Vistra Operations Commodity-Linked Credit Facility (Credit Facility Collateral Suspension). The Credit Facility Collateral Suspension is subject to reversion if the applicable rating agencies withdraw the investment-grade ratings or downgrade the ratings below investment grade, subject to a 60-day grace period.
PJM Nuclear Power Purchase Agreements and Uprates
In January 2026, Vistra announced it had entered into 20-year PPAs with Meta, pursuant to which the Company has agreed to supply Meta with a total of 2,609 MW of carbon-free power and capacity from the Company's PJM nuclear power plants as follows:
• 1,268 MW of energy and capacity from Perry and 908 MW of energy and capacity from Davis-Besse; and
• 213 MW of uprate energy and capacity from Perry, 80 MW of uprate energy and capacity from Davis-Besse, and 140 MW of uprate energy and capacity from Beaver Valley.
Under the terms of the PPAs, the Company anticipates commencing delivery on a portion of the operating energy and capacity in late 2026 and full delivery of the operating energy and capacity by year end 2027. Additionally, the Company anticipates commencing delivery on a portion of the uprate energy and capacity by 2031 and full delivery of the uprate energy and capacity by year end 2034. To achieve the uprates, the Company expects to incur capital expenditures commencing in 2026 and extending through 2034, with less than 20% of the aggregate spend projected to occur by year end 2028. The timing and amount of our planned uprate expenditures will depend on a range of factors, including regulatory approvals, engineering evaluations and capital allocation decisions.
Cogentrix Transaction
On December 31, 2025, Vistra executed definitive agreements to acquire Cogentrix Energy which consists of 10 modern natural gas generation facilities totaling approximately 5,500 MW of capacity (Cogentrix Transaction). The facilities include three combined cycle gas turbine facilities and two combustion turbine facilities located across PJM, four combined cycle gas turbine facilities in ISO-NE, and one cogeneration facility in ERCOT.
Aggregate consideration at closing will consist of approximately (i) $2.3 billion in cash, net of adjustments for the assumption of an estimated $1.5 billion of outstanding indebtedness of Cogentrix as of the closing date, and (ii) 5,000,000 shares of Vistra common stock, par value $0.01, to be issued to the seller, at a mutually agreed-upon value of $185 per share.
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VISTRA CORP.
Consummation of the Cogentrix Transaction is subject to customary closing conditions, including receipt of all requisite regulatory approvals, including approvals of FERC and the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Cogentrix Transaction is expected to close in the second half of 2026.
Lotus Acquisition
On October 22, 2025, pursuant to a purchase and sale agreement dated May 15, 2025, Vistra Operations acquired 100% of the membership interests of certain subsidiaries of Lotus (Lotus Acquisition). The Lotus Acquisition resulted in the addition of seven natural gas generation facilities totaling 2,600 MW in Delaware and Pennsylvania (PJM), Rhode Island (ISO-NE), New York (NYISO), and California (CAISO), further geographically diversifying Vistra's natural gas fleet.
The aggregate purchase price consisted of a base purchase price of $1.9 billion, subject to certain customary adjustments, including the acquired companies' working capital, cash, indebtedness, and certain other adjustments. Vistra Operations funded the Lotus Acquisition with a combination of cash and the assumption of the acquired companies' indebtedness which consisted of a senior secured credit facility, including an existing term loan with approximately $800 million principal outstanding, which reduced the cash consideration payable at closing. Cash consideration payable at closing, excluding adjustments for the acquired companies' working capital, cash, and certain other adjustments of $137 million, was $1.1 billion. See Note 2 to the Financial Statements for additional information.
Comanche Peak Power Purchase Agreement
In September 2025, Vistra announced that we entered into a 20-year PPA (with options to extend for up to an additional 20 years) with AWS, pursuant to which we agreed to supply AWS 1,200 MW of carbon-free power from the Comanche Peak Nuclear Power Plant. Vistra anticipates power delivery to begin in the fourth quarter of 2027 and ramp to full capacity by 2032.
Nuclear Plant License Renewal
In July 2025, our application for license renewal at our Perry Nuclear Plant was approved by the NRC. The license now extends through 2046.
OBBBA and CAMT
In July 2025, the legislation known as the OBBBA was signed into law and we have accounted for the effects in our consolidated financial statements. Key changes include the immediate expensing of domestic research and development costs, the reinstatement of 100% bonus depreciation, and increases in the limitation of interest deductibility. Certain provisions of the OBBBA will change the timing of cash tax payments in the current fiscal year and future year periods, however the legislation did not have a material impact on our consolidated financial statements. We do not expect Vistra to be subject to the corporate alternative minimum tax (CAMT) in the 2026 tax year. We have taken the CAMT and forecasted OBBBA impacts into account when forecasting cash taxes.
Moss Landing 300 Incident
On January 16, 2025, we detected a fire at our Moss Landing 300 MW energy storage facility at the Moss Landing Power Plant site (the Moss Landing Incident) that resulted in ceasing operations at all facilities at the Moss Landing complex until the fire was contained. No injuries occurred due to the fire or the Company's response. See Note 8 to the Financial Statements for additional information.
Martin Lake Unit 1 Incident
On November 27, 2024, we experienced a fire at Unit 1 of our Martin Lake facility in ERCOT (the Martin Lake Incident), an 815 MW unit. We wrote-off the unit's net book value of less than $1 million to depreciation expense in December 2024. The unit returned to service in February 2026. See Note 8 to the Financial Statements for additional information.
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VISTRA CORP.
Planned Gas-Fueled Dispatchable Power in ERCOT
In May 2024, we announced our intention to add up to 2,000 MW of dispatchable, natural gas-fueled electricity capacity in west, central, and north Texas consisting of the following projects:
• Building up to 860 MW of advanced simple-cycle peaking plants to be located in west Texas to support the increasing power needs of the region, including the state's oil and gas industry. Early development work is underway on this project which we anticipate will be online in 2028.
• Repowering the coal-fueled Coleto Creek Power Plant near Goliad, Texas, set to retire in 2027 to comply with EPA rules, as a natural-gas fueled plant with up to 600 MW of capacity.
• Completing upgrades at existing natural gas-fueled plants that will add more than 500 MW of summer capacity and 100 MW of winter capacity.
In July 2024, we filed applications with the PUCT under the Texas Energy Fund loan program seeking financing for the 860 MW of new advanced simple-cycle peaking plants referenced above. Both projects were selected for due diligence as part of the Texas Energy Fund loan program. An invitation to due diligence does not mean an applicant is awarded a loan. Due diligence is progressing and we are in the final stages.
Inflation Reduction Act of 2022 (IRA)
In August 2022, the U.S. enacted the IRA, which, among other things, implements substantial new and modified energy tax credits, including recognizing the value of existing carbon-free nuclear power by providing for a nuclear PTC, a solar PTC, new technology-neutral ITCs and PTCs that apply to various different clean energy technologies, and a first-time stand-alone battery storage ITC. The IRA also implements a 15% corporate alternative minimum tax (CAMT) on book income of certain large corporations, and a 1% excise tax on net stock repurchases. The section 45U nuclear PTC is available to existing nuclear facilities from 2024 through 2032 and provides a federal tax credit of up to $15 MWh, subject to an annually inflated gross-receipts based phase out. As discussed in Note 5 to the Financial Statements in our 2025 Form 10-K, we recognized transferable nuclear PTC revenues of $220 million and $545 million in the years ended December 31, 2025 and 2024, respectively. U.S. Treasury regulations are expected to further define the scope of the legislation in many important respects, including interpretive guidance on the definition of gross receipts for the nuclear PTC. Any interpretive guidance on the definition of gross receipts that differs from the interpretation used in our estimates could result in a material change to PTC revenues recorded in 2024 and 2025 and would be reflected as a change in estimate in the period in which the guidance is received.
Factors Affecting Our Financial Condition and Results of Operations
Commodity Prices
The price of electricity has a significant impact on our operating revenues and purchased power costs. Electricity prices are typically set by the cost to fuel a generation facility and the amount of fuel needed to generate one unit of electricity (Heat Rate) from the generation facility. Market Heat Rate is the implied relationship between wholesale electricity prices and the commodity price of the marginal supplier (generally natural gas plants).
Wholesale electricity prices generally move with natural gas prices, except in certain circumstances, such as when ERCOT power prices increase significantly during extreme weather events due to generation scarcity. Because natural gas prices are volatile, the operating costs of our natural gas‑fueled generation facilities can also be volatile. While changes in natural gas prices do not materially affect the cost of generation at our nuclear‑, lignite‑, and coal‑fueled facilities, such changes generally influence electricity prices and, therefore, the operating margins of these facilities. Other factors that may affect electricity prices include fuel costs, load growth, regional generation supply, weather conditions, competitive dynamics, emerging technologies, and macroeconomic and regulatory developments.
The wholesale market price of electricity divided by the market price of natural gas represents the Market Heat Rate. Market Heat Rate can be affected by a number of factors, including generation availability, mix of assets and the efficiency of the marginal supplier (generally natural gas-fueled generation facilities) in generating electricity. Our Market Heat Rate exposure is impacted by changes in the availability of generation resources, such as additions and retirements of generation facilities, and mix of generation assets. For example, increasing renewable (wind and solar) generation capacity generally depresses Market Heat Rates, particularly during periods when total demand is relatively low. However, increasing penetration of renewable generation capacity may also contribute to greater volatility of wholesale market prices independent of changes in the price of natural gas, given their intermittent nature.
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VISTRA CORP.
Due to our exposure to variability in natural gas prices and Market Heat Rates, retail sales and hedging activities are critical to our operating results and cash flow stability. Our integrated power generation and retail electricity business provides flexibility to hedge our generation position by utilizing retail markets as an effective sales channel. As we entered the 2025 and 2026 calendar years, substantially all of our expected generation volumes for these years were hedged. This disciplined hedging strategy supports margin protection and contributes to more stable and predictable earnings.
As a result of our hedging strategy, the net income of our segments can be significantly impacted by changes in unrealized gains and losses on commodity derivative instruments which are driven by changes in forward power prices. When power prices increase or decrease compared to what our generation segments have sold forward, the generation segments recognize unrealized losses or gains, respectively. Conversely, the retail segment, which procures power from the generation segments to meet future load obligations, experiences an inverse effect on unrealized mark-to-market valuations compared to the generation segments.
The table below summarizes the average around-the-clock settled prices for the periods presented and does not necessarily reflect prices we realized or costs we incurred.
Three Months Ended March 31,
2026 2025
Average Power Price ($/MWh):
ERCOT North Hub $ 32.18 $ 30.91
ERCOT West Hub $ 29.56 $ 30.13
PJM AEP Dayton Hub $ 70.66 $ 47.91
PJM Northern Illinois Hub $ 51.08 $ 35.19
PJM Western Hub $ 97.41 $ 53.91
MISO Indiana Hub $ 67.25 $ 44.84
ISONE Massachusetts Hub $ 117.31 $ 102.77
New York Zone A $ 100.48 $ 68.63
CAISO NP15 $ 29.01 $ 40.89
Average Natural Gas Price ($/MMMBtu)
NYMEX Henry Hub $ 4.90 $ 4.28
Houston Ship Channel $ 3.26 $ 3.46
Permian Basin $ (1.05) $ 1.83
Dominion South $ 4.73 $ 3.74
Tetco ELA $ 4.91 $ 4.06
Chicago Citygate $ 5.34 $ 4.00
Tetco M3 $ 9.61 $ 6.42
Algonquin Citygates $ 14.08 $ 11.83
PG&E Citygate $ 2.07 $ 3.71
Estimated hedging levels for generation volumes in our Texas, East, and West segments as of March 31, 2026 were as follows:
Balance of 2026
2027
Nuclear/Renewable/Coal Generation:
Texas 100 % 100 %
East 98 % 68 %
Natural Gas Generation:
Texas 100 % 59 %
East 99 % 90 %
West 100 % 56 %
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VISTRA CORP.
Seasonality
The demand for and market prices of electricity and natural gas are affected by weather. As a result, our operating results are impacted by extreme or sustained weather conditions and may fluctuate on a seasonal basis. Typically, demand for and the price of electricity is higher in the summer and winter seasons, when the temperatures are more extreme, and the demand for and price of natural gas is also generally higher in the winter. More severe weather conditions such as heat waves or extreme winter weather have made, and may make, such fluctuations more pronounced. The pattern of this fluctuation may change depending on, among other things, the retail load served and the terms of contracts to purchase or sell electricity.
To illustrate the impact of weather variability on our operating results, the following table presents cooling and heating degree days relative to normal levels by segment in the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,
Retail Texas East West
2026 2025 2026 2025 2026 2025 2026 2025
Weather - percent of normal (a):
Heating degree days 73% 105% 77 % 113 % 107 % 101 % 64 % 124%
____________
(a) Reflects cooling degree or heating degree days based on Weather Services International (WSI) data. A degree day compares the average of the hourly outdoor temperatures during each day to a 65° Fahrenheit base temperature. Retail amounts represent weather data for the Dallas-Fort Worth area.
Results of Operations
The tables and discussion that follows present period‑over‑period changes in our results of operations and highlight the primary drivers of those variances for the periods presented.
In analyzing and planning for our business, we supplement our use of GAAP financial measures with non-GAAP financial measures, including EBITDA and Adjusted EBITDA as performance measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed (i) with our GAAP results and (ii) the accompanying reconciliations to corresponding GAAP financial measures may provide a more complete understanding of factors and trends affecting our business. Because EBITDA and Adjusted EBITDA are financial measures that management uses to allocate resources, determine our ability to fund capital expenditures, assess performance against our peers, and evaluate overall financial performance, we believe they provide useful information for investors.
These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures and are, by definition, an incomplete understanding of Vistra and must be considered in conjunction with GAAP measures. In addition, non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. We strongly encourage investors to review the condensed consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
When EBITDA or Adjusted EBITDA is discussed in reference to performance on a consolidated basis, the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA is Net income (loss).
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VISTRA CORP.
Consolidated Results of Operations
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the three months ended March 31, 2026:
Three Months Ended March 31, 2026
Retail Texas East West Asset
Closure Eliminations / Corporate and Other Vistra
Consolidated
(in millions)
Operating revenues $ 3,689 $ 2,987 $ 2,260 $ 89 $ 6 $ (3,391) $ 5,640
Fuel, purchased power costs, and delivery fees (4,097) (416) (1,384) (25) — 3,392 (2,530)
Operating costs (38) (261) (373) (16) (12) — (700)
Depreciation and amortization (10) (174) (265) (14) (3) (18) (484)
Selling, general, and administrative expenses (256) (59) (50) (3) (15) (44) (427)
Operating income (loss) (712) 2,077 188 31 (24) (61) 1,499
Other income (deductions), net
1 — (34) — 4 5 (24)
Interest expense and related charges (13) 14 22 3 — (289) (263)
Income (loss) before income taxes (724) 2,091 176 34 (20) (345) 1,212
Income tax expense — — — — — (183) (183)
Net income (loss) $ (724) $ 2,091 $ 176 $ 34 $ (20) $ (528) $ 1,029
Income tax expense — — — — — 183 183
Interest expense and related charges (a) 13 (14) (22) (3) — 289 263
Depreciation and amortization (b) 10 211 355 14 3 18 611
EBITDA before Adjustments (701) 2,288 509 45 (17) (38) 2,086
Unrealized net (gain) loss resulting from commodity hedging transactions 765 (1,722) 225 9 — — (723)
Purchase accounting impacts — — (1) — — — (1)
Non-cash compensation expenses — — — — — 32 32
Transition and merger expenses (1) — — — — 12 11
Insurance income (c) — — — — (6) — (6)
Decommissioning-related activities (d) — 4 60 — 2 — 66
Other, net
5 16 8 2 2 (23) 10
Adjusted EBITDA $ 68 $ 586 $ 801 $ 56 $ (19) $ (17) $ 1,475
____________
(a) Corporate and Other includes $16 million of unrealized mark-to-market net gains on interest rate swaps.
(b) Includes nuclear fuel amortization of $36 million and $90 million, respectively, in the Texas and East segments.
(c) Includes revenues from Moss Landing Incident business interruption proceeds in the Asset Closure segment.
(d) Includes NDT (income) loss of the PJM nuclear facilities, ARO and environmental remediation expenses, and other expenses associated with the Moss Landing Incident.
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VISTRA CORP.
The following table presents Net income (loss), EBITDA and Adjusted EBITDA for the three months ended March 31, 2025:
Three Months Ended March 31, 2025
Retail Texas East West Asset
Closure Eliminations / Corporate and Other Vistra
Consolidated
(in millions)
Operating revenues $ 3,168 $ 210 $ 1,380 $ 157 $ 4 $ (986) $ 3,933
Fuel, purchased power costs, and delivery fees (1,712) (497) (1,172) (52) — 986 (2,447)
Operating costs (40) (258) (327) (12) (56) — (693)
Depreciation and amortization (23) (150) (316) (15) 1 (19) (522)
Selling, general, and administrative expenses (243) (41) (58) (2) (17) (30) (391)
Operating income (loss) 1,150 (736) (493) 76 (68) (49) (120)
Other income (deductions), net — 2 (9) — 1 1 (5)
Interest expense and related charges (18) 14 12 1 (1) (327) (319)
Impacts of Tax Receivable Agreement — — — — — — —
Income (loss) before income taxes 1,132 (720) (490) 77 (68) (375) (444)
Income tax benefit
— — — — — 176 176
Net income (loss) $ 1,132 $ (720) $ (490) $ 77 $ (68) $ (199) $ (268)
Income tax benefit
— — — — — (176) (176)
Interest expense and related charges (a) 18 (14) (12) (1) 1 327 319
Depreciation and amortization (b) 23 181 396 15 (1) 19 633
EBITDA before Adjustments 1,173 (553) (106) 91 (68) (29) 508
Unrealized net (gain) loss resulting from commodity hedging transactions (997) 1,030 567 (32) (1) — 567
Purchase accounting impacts — — 14 — — — 14
Non-cash compensation expenses — — — — — 21 21
Transition and merger expenses — — 1 — — 17 18
Decommissioning-related activities (c)
— 5 35 — 46 — 86
Other, net 8 8 3 3 (1) (19) 2
Adjusted EBITDA $ 184 $ 490 $ 514 $ 62 $ (24) $ (10) $ 1,216
____________
(a) Corporate and Other includes $48 million of unrealized mark-to-market net losses on interest rate swaps.
(b) Includes nuclear fuel amortization of $31 million and $80 million, respectively, in the Texas and East segments.
(c) Includes, NDT (income) loss of the PJM nuclear facilities, ARO and environmental remediation expenses, and other expenses associated with the Moss Landing Incident.
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VISTRA CORP.
Net income for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 increased by $1.297 billion. Adjusted EBITDA for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 increased by $259 million. The primary drivers for the increase in net income and the increase in Adjusted EBITDA include:
Three Months Ended March 31, 2026 Compared to 2025
(in millions)
Favorable change in realized revenue net of fuel driven primarily by higher realized capacity prices in East, energy margins in Texas, and the addition of plants acquired in the Lotus Acquisition
$ 445
Unfavorable retail margins driven by increase in excess volumes sold at lower wholesale prices
(79)
Unfavorable change in retail customer consumption due to weather
(23)
Increase in plant operating costs due primarily to higher maintenance and outage costs and the addition of plants acquired in the Lotus Acquisition
(57)
Change in SG&A and other primarily due to higher technology, legal, and retail selling costs
(27)
Change in Adjusted EBITDA $ 259
Change in depreciation and amortization, including nuclear fuel amortization
22
Change in unrealized net gains (losses) resulting from commodity hedging transactions 1,290
Increase in insurance income 6
Decommissioning related activities 20
Other (including interest expenses and income tax expense) (300)
Change in Net income (loss) $ 1,297
Results of Operations by Segment
The following section presents the results of operations and net income of Vistra's reportable business segments. See Note 18 of the Financial Statements for a discussion of the Company's segments as defined under the accounting standards for segment reporting.
Retail
Three Months Ended March 31,
2026 2025
(in millions)
Net income (loss)
$ (724) $ 1,132
Adjusted EBITDA $ 68 $ 184
Retail electricity sales volumes (GWh):
Sales volumes in ERCOT 15,904 17,965
Sales volumes in Northeast/Midwest 14,205 15,358
Total retail electricity sales volumes 30,109 33,323
Retail net income decreased due to a $1.762 billion increase in unrealized mark-to-market losses on commodity derivative positions and a decrease in retail margins primarily due to an increase in excess volumes sold at lower wholesale prices and a decrease in customer consumption due to weather.
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VISTRA CORP.
Texas
Three Months Ended March 31,
2026 2025
(in millions)
Net income (loss)
$ 2,091 $ (720)
Adjusted EBITDA $ 586 $ 490
Production volumes (GWh):
Natural gas facilities 9,259 9,145
Lignite and coal facilities 5,420 5,437
Nuclear facilities 5,224 5,229
Solar facilities 234 162
Capacity factors:
CCGT facilities 49.8 % 48.1 %
Lignite and coal facilities 52.1 % 56.0 %
Nuclear facilities 100.8 % 100.9 %
Texas net income increased primarily due to a $2.752 billion increase in unrealized mark-to-market gains on commodity derivative positions and higher energy margins.
East
Three Months Ended March 31,
2026 2025
(in millions)
Net income (loss) $ 176 $ (490)
Adjusted EBITDA $ 801 $ 514
Production volumes (GWh):
Natural gas facilities 17,450 14,642
Lignite and coal facilities 4,414 5,174
Nuclear facilities 8,044 7,679
Solar facilities 55 44
Capacity factors:
CCGT facilities 61.5 % 63.2 %
Lignite and coal facilities 52.0 % 61.0 %
Nuclear facilities 92.0 % 87.9 %
East net income increased primarily due to a $342 million decrease in unrealized mark-to-market losses on commodity derivative positions, higher realized capacity prices and the addition of plants acquired in the Lotus Acquisition.
West
Three Months Ended March 31,
2026 2025
(in millions)
Net income $ 34 $ 77
Adjusted EBITDA $ 56 $ 62
Production volumes (GWh):
Natural gas facilities 387 502
Capacity factors:
CCGT facilities 16.8 % 22.7 %
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VISTRA CORP.
West net income decreased primarily due a $41 million increase in unrealized mark-to-market losses on commodity derivative positions.
Asset Closure Segment
Three Months Ended March 31,
2026 2025
(in millions)
Net loss $ (20) $ (68)
Asset Closure net loss decreased primarily due to costs associated with the Moss Landing Incident, net of insurance recoveries, recognized in the three months ended March 31, 2025.
Disaggregated Consolidated Statement of Operations Results
Explanations of variations between periods for selected income statement categories are provided below:
Three Months Ended March 31,
2026 2025
(in millions)
Operating revenues $ 5,640 $ 3,933
Operating revenues increased primarily due to a $1.149 billion increase in unrealized mark-to-market gains on commodity derivative positions, higher wholesale capacity and energy revenues and the addition of plants acquired in the Lotus Acquisition.
Three Months Ended March 31,
2026 2025
(in millions)
Fuel, purchased power costs, and delivery fees $ (2,530) $ (2,447)
Fuel, purchased power costs, and delivery fees increased primarily due to a $246 million increase in realized fuel costs partially due to the addition of plants acquired in the Lotus Acquisition, partially offset by a $141 million increase in unrealized mark-to-market gains on commodity derivative positions.
Three Months Ended March 31,
2026 2025
(in millions)
Operating costs $ (700) $ (693)
Operating costs increased primarily due to higher maintenance and outage costs and the addition of plants acquired in the Lotus Acquisition, partially offset by costs associated with the Moss Landing Incident, net of insurance recoveries, recognized in the three months ended March 31, 2025.
Three Months Ended March 31,
2026 2025
(in millions)
Depreciation and amortization $ (484) $ (522)
Depreciation and amortization decreased primarily due to the absence of depreciation and amortization expense recorded for the Moss Landing 300 and 100 MW battery projects and Retail customer relationship intangible assets during the three months ended March 31, 2026 and other one-time retirements recorded in the three months ended March 31, 2025, partially offset by the addition of plants acquired in the Lotus Acquisition.
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VISTRA CORP.
Three Months Ended March 31,
2026 2025
(in millions)
Selling, general, and administrative expenses $ (427) $ (391)
Selling, general, and administrative expenses increased primarily due to an increase in technology and legal costs of $13 million, stock based compensation expense of $11 million and retail selling costs of $5 million.
Three Months Ended March 31,
2026 2025
(in millions)
Other deductions, net
$ (24) $ (5)
Other deductions, net increased due to higher NDT net losses of $24 million consisting of unrealized losses on investments of $95 million partially offset by realized income of $71 million.
Three Months Ended March 31,
2026 2025
(in millions)
Interest expense and related charges $ (263) $ (319)
Interest expense and related charges decreased primarily due to a $64 million increase in unrealized mark-to-market gains on interest rate swaps.
Three Months Ended March 31,
2026 2025
(in millions)
Income tax benefit (expense)
$ (183) $ 176
Effective tax rate 15.1 % 39.6 %
Income tax benefit (expense) decreased primarily due to an increase in pre-tax income.
Liquidity and Capital Resources
Our primary sources of liquidity and capital consist of (i) cash and cash equivalents, (ii) net cash provided by operating activities, (iii) available capacity under our credit facilities, and (iv) access to the debt and equity capital markets. Within the bounds of our risk management program and policies, we use a variety of derivative instruments to enhance the stability of future cash flows to maintain sufficient financial resources for working capital, debt service, capital expenditures, debt covenant compliance, and (or) other needs. Our hedging strategy is designed to preserve cash flow certainty while maintaining appropriate risk tolerances across our generation portfolio. We complement our hedging strategy with long‑term contracted revenues, including power purchase agreements, to lower our overall hedging requirements.
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VISTRA CORP.
Sources and Uses of Cash
Three Months Ended March 31,
2026 2025 Change
(in millions)
Net cash provided by operating activities $ 1,199 $ 599 $ 600
Net cash used in investing activities $ (638) $ (1,061) $ 423
Net cash used in financing activities $ (706) $ (164) $ (542)
Operating Cash Flows
The change in net cash provided by operating activities was primarily driven by (i) increased realized revenue net of fuel driven primarily by higher realized capacity prices and energy margins, (ii) increase in realized revenue net of expenses from the addition of plants acquired in the Lotus Acquisition and (iii) a $284 million increase in net margin deposits as $67 million in net margin deposits supporting our hedging strategy were returned for the three months ended March 31, 2026 as compared to $217 million in net margin deposits posted for the three months ended March 31, 2025.
Investing Cash Flows
The change in net cash used in investing activities is primarily driven by (i) $247 million in lower net purchases of environmental allowances in 2026 and (ii) $186 million of insurance proceeds received in 2026 for recovery of damaged property, plant, and equipment associated with the Moss Landing Incident.
Financing Cash Flows
Our significant financing activities during the three months ended March 31, 2026 and 2025 are as follows:
• For the three months ended March 31, 2026, we (i) repaid $1.8 billion under the Vistra Operations Credit Facilities and the Commodity-Linked Facility, (ii) repaid $475 million under the accounts receivable financing facilities, (iii) paid $372 million to repurchase common stock, and (iv) paid $98 million in dividends to common and preferred shareholders. For the three months ended March 31, 2026, we issued $2.25 billion in senior secured notes.
• For the three months ended March 31, 2025, we paid $337 million to repurchase common stock and $104 million in dividends to common and preferred shareholders. For the three months ended March 31, 2025, we borrowed $332 million under the accounts receivable financing facilities.
Liquidity
The following table summarizes changes in available liquidity for the three months ended March 31, 2026:
March 31, 2026 December 31, 2025 Change
(in millions)
Cash and cash equivalents (a) $ 634 $ 785 $ (151)
Vistra Operations Credit Facilities — Revolving Credit Facility (b) 2,126 1,996 130
Vistra Operations — Commodity-Linked Facility (c) 1,413 2 1,411
Total available liquidity (d)(e) $ 4,173 $ 2,783 $ 1,390
____________
(a) See the condensed consolidated statements of cash flows in the Financial Statements and Sources and Uses of Cash above for details of the decrease in cash and cash equivalents for the three months ended March 31, 2026.
(b) The increase in availability for the three months ended March 31, 2026 was driven by a $380 million decrease in cash borrowings, partially offset by a $250 million increase in letters of credit outstanding under the facility.
(c) As of March 31, 2026 and December 31, 2025, the borrowing bases were less than the facility limit of $1.75 billion. As of March 31, 2026, available capacity reflects the borrowing base of $1.413 billion and no cash borrowings. As of December 31, 2025, available capacity reflects the borrowing base of $1.422 billion and $1.420 billion in cash borrowings.
(d) Excludes amounts available to be borrowed under the Receivables Facility and the Repurchase Facility, respectively. See Note 11 to the Financial Statements for additional information.
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VISTRA CORP.
(e) Excludes any additional letters of credit that may be issued under the Secured LOC Facilities or the Alternative LOC Facilities. See Note 11 to the Financial Statements for additional information.
We believe that we will have access to sufficient liquidity to fund our anticipated cash requirements through at least the next 12 months, including the consummation of the Cogentrix Transaction, the maturity of 2026 and 2027 debt obligations, including the 5.050% Senior Notes due December 2026 and 3.7000% Senior Notes due January 2027, and the upcoming payments associated with the acquisition of Nuveen's noncontrolling interest in Vistra Vision discussed in Note 11 to the Financial Statements.
In April 2026, Vistra Operations issued $4.0 billion aggregate principal amount of senior unsecured notes. Net proceeds totaling approximately $3.968 billion were used to repay or redeem existing indebtedness, including the $1.3 billion outstanding principal amount of 5.625% Senior Notes due 2027 and the $2.444 billion in outstanding borrowings under the Term Loan B-3 facility, and to pay fees and expenses related to the offering. Excess net proceeds will be used for general corporate purposes. See Note 11 to the Financial Statements for additional information.
Our operational cash flows tend to be seasonal and weighted toward the second half of the year.
Liquidity Effects of Commodity Hedging and Trading Activities
We have entered into commodity hedging and trading transactions that require us to post collateral if the forward price of the underlying commodity moves such that the hedging or trading instrument we hold has declined in value. We use cash, letters of credit, Eligible Assets (see Note 10 to the Financial Statements for additional information) and other forms of credit support to satisfy such collateral posting obligations. See Note 11 to the Financial Statements for additional information.
Exchange cleared transactions typically require initial margin ( i.e. , the upfront cash and/or letter of credit posted to take into account the size and maturity of the positions and credit quality) in addition to variation margin ( i.e. , the daily cash margin posted to take into account changes in the value of the underlying commodity). The amount of initial margin required is generally defined by exchange rules. Clearing agents, however, typically have the right to request additional initial margin based on various factors, including market depth, volatility and credit quality, which may be in the form of cash, letters of credit, a guaranty or other forms as negotiated with the clearing agent. Cash collateral received from counterparties is either used for working capital and other business purposes, including reducing borrowings under credit facilities, or is required to be deposited in a separate account and restricted from being used for working capital and other corporate purposes. With respect to over-the-counter transactions, counterparties generally have the right to substitute letters of credit for such cash collateral. In such event, the cash collateral previously posted would be returned to such counterparties, which would reduce liquidity in the event the cash was not restricted.
As of March 31, 2026, we received or posted cash, letters of credit, and Eligible Assets for commodity hedging and trading activities as follows:
• $1.516 billion in cash and Eligible Assets has been posted with counterparties as compared to $1.577 billion posted as of December 31, 2025;
• $11 million in cash has been received from counterparties as compared to $7 million received as of December 31, 2025;
• $3.189 billion in letters of credit has been posted with counterparties as compared to $2.489 billion posted as of December 31, 2025; and
• $48 million in letters of credit has been received from counterparties as compared to $162 million received as of December 31, 2025.
See Note 15 to the Financial Statements for information related to collateral posted in accordance with the PUCT and ISO/RTO rules.
Income Tax Payments
In the next 12 months, we expect to make approximately $9 million in federal income tax payments, $65 million in state income tax payments, and no material TRA payments, offset by $3 million in federal income tax refunds and $17 million in state tax refunds.
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VISTRA CORP.
For the three months ended March 31, 2026, there were no federal income tax payments and $8 million in state income tax payments, offset by $2 million in state income tax refunds.
Financial Covenants and Cross-Default Provisions
The Vistra Operations Credit Agreement, Vistra Operations Commodity-Linked Credit Agreement, and Secured LOC Facilities each include a financial covenant. The Vistra Operations Credit Agreement, Vistra Operations Commodity-Linked Credit Agreement, Secured LOC Facilities, and certain of our other financing arrangements include cross-default provisions that could result in an event of default if there were a failure under financing arrangements to meet payment terms or to observe covenants that could result in an acceleration of payments due. See Note 11 to the Financial Statements for additional information.
Guarantees
See Note 15 to the Financial Statements for additional information.
Commitments and Contingencies
See Note 15 to the Financial Statements for additional information.
Critical Accounting Estimates
The Company's discussion and analysis of its financial position and results of operations is based upon its condensed consolidated financial statements. The preparation of these condensed consolidated financial statements requires estimation and judgment that affect the reported amounts of revenue, expenses, assets, and liabilities. The Company bases its estimates on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the accounting for assets and liabilities that are not readily apparent from other sources. If the estimates differ materially from actual results, the impact in the condensed consolidated financial statements may be material. The Company's critical accounting estimates are disclosed in our 2025 Form 10-K.
Changes in Accounting Standards
See Note 1 to the Financial Statements for additional information.