Acquisitions

6 Months Ended

Jun. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions

ACQUISITIONS

Purchase Agreement

On May 15, 2025, Vistra Operations entered into a purchase and sale agreement (Purchase Agreement) with subsidiaries of Lotus Infrastructure Partners (Lotus) to acquire 100% of the membership interests of subsidiaries of Lotus (the Acquired Companies, and the transactions contemplated by the Purchase Agreement, the Transactions). The Transactions will result in the acquisition 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). This expansion is expected to further geographically diversify Vistra's natural gas fleet.

The aggregate purchase price consists 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, as specified in the Purchase Agreement. Vistra Operations expects to fund the Transactions with (a) the assumption of the Acquired Companies' indebtedness, which consists of a senior secured credit facility, including an existing term loan, which would reduce the cash consideration payable at closing, and (b) cash. The principal amount of the senior secured credit facility to be assumed is expected to be approximately 50% of the consideration at closing.

Consummation of the Transactions is subject to customary closing conditions, including (a) receipt of all requisite regulatory approvals, including approvals of FERC under the Federal Power Act of 1920, (b) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and (c) a declaratory ruling or approval from the New York Public Service Commission (collectively, Specified Regulatory Approvals). The Purchase Agreement includes, as a condition to Vistra Operations’ obligation to close, a requirement that Lotus complete a pre-closing reorganization. This reorganization involves transferring certain subsidiaries of the Acquired Companies to the Sellers or their non-Acquired Company affiliates prior to closing. We are pursuing all Specified Regulatory Approvals and anticipate the Transactions will close in late 2025 or early 2026.

Energy Harbor Business Combination

On March 1, 2024 (Merger Date), pursuant to a transaction agreement dated March 6, 2023, (i) Vistra Operations transferred certain of its subsidiary entities into Vistra Vision, (ii) Black Pen Inc., a wholly owned subsidiary of Vistra, merged with and into Energy Harbor, (iii) Energy Harbor became a wholly owned subsidiary of Vistra Vision, and (iv) affiliates of Nuveen Asset Management, LLC (Nuveen) and Avenue Capital Management II, L.P. (Avenue) exchanged a portion of the Energy Harbor shares held by Nuveen and Avenue for a 15% equity interest of Vistra Vision (collectively, Energy Harbor Merger). The Energy Harbor Merger combined Energy Harbor's and Vistra's nuclear and retail businesses and certain Vistra Zero renewables and energy storage facilities to provide diversification and scale across multiple carbon-free technologies (dispatchable and renewables/storage) and the retail business.

The Energy Harbor Merger was accounted for using the acquisition method in accordance with ASC 805, Business Combinations (ASC 805), which requires identifiable assets acquired and liabilities assumed to be recorded at their estimated fair values on the Merger Date. The combined results of operations are reported in the condensed consolidated financial statements beginning as of the Merger Date.

The following table summarizes the acquisition date fair value of Energy Harbor associated with the Energy Harbor Merger on the Merger Date:

	Consideration
	(in millions)
Cash consideration	$	3,100
15% of the fair value of net assets contributed to Vistra Vision by Vistra (a)	1,496
Total purchase price	4,596
Fair value of noncontrolling interest in Energy Harbor (b)	811
Acquisition date fair value of Energy Harbor	$	5,407

____________

(a)Valued using a discounted cash flow analysis of the contributed subsidiaries including contributed debt.

(b)Represents 15% of the acquisition date fair value implied from the fair value of consideration transferred.

As a result of the Energy Harbor Merger, Vistra maintained an 85% ownership interest in Vistra Vision and recorded the remaining 15% equity interest as a noncontrolling interest in the condensed consolidated balance sheets as of the Merger Date. On the Merger Date, we reclassified the carrying value of assets contributed to Vistra Vision of $749 million from additional paid-in-capital of Vistra (the controlling interest) to the noncontrolling interest in subsidiary.

Provisional fair value measurements were made for acquired assets and liabilities in the first quarter of 2024 and adjustments to those measurements were made through March 1, 2025 (the end of the measurement period). The final fair values assigned to assets acquired and liabilities assumed are as follows:

	Fair Value as of March 1, 2024		Measurement Period Adjustments recorded since March 1, 2024
	(in millions)
Cash and cash equivalents	$	35	$	5
Trade accounts receivables, inventories, prepaid expenses and other current assets	540		2
Investments (a)	2,021		—
Property, plant and equipment (b)	5,616		(4)
Identifiable intangible assets (c)	444		16
Commodity and other derivative contractual assets (d)	129		(11)
Other noncurrent assets	62		54
Total identifiable assets acquired	8,847		62
Trade accounts payable and other current liabilities	318		55
Long-term debt, including amounts due currently	413		—
Commodity and other derivative contractual liabilities (d)	179		—
Accumulated deferred income taxes	1,314		(50)
Asset retirement obligations (e)	1,368		—
Identifiable intangible liabilities	55		(18)
Other noncurrent liabilities and deferred credits	20		8
Total identifiable liabilities assumed	3,667		(5)
Identifiable net assets acquired	5,180		67
Goodwill (f)	227		(67)
Net assets acquired	$	5,407

____________

(a)Investments represent securities held in nuclear decommissioning trusts (NDT) for the purpose of funding the future retirement and decommissioning of the PJM nuclear generation facilities. These investments include equity, debt and other fixed-income securities consistent with investment rules established by the NRC. They are valued using a market approach (Level 1 or Level 2 depending on security).

(b)Acquired property, plant, and equipment are valued using a combination of an income approach and a market approach. The income approach utilized a discounted cash flow analysis based upon a debt-free, free cash flow model (Level 3).

(c)Includes acquired nuclear fuel supply contracts valued based on contractual cash flow projections over approximately five years compared with cash flows based on current market prices with the resulting difference discounted to present value (Level 3). Also includes acquired retail customer relationships which are valued based on discounted cash flow analysis of acquired customers and estimated attrition rates (Level 3).

(d)Acquired derivatives are valued using the methods described in Note 11 (Level 1, Level 2, or Level 3). Contracts with terms that were not at current market prices are also valued using a discounted cash flow analysis (Level 3).

(e)Asset retirement obligations are valued using a discounted cash flow model which, on a unit-by-unit basis, considers multiple decommissioning methods and are based on decommissioning cost studies (Level 3).

(f)The excess of the consideration transferred over the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill. Goodwill represents expected synergies to be generated from combining operations of Energy Harbor with Vistra. None of the Goodwill is deductible for income tax purposes.

The following unaudited pro forma financial information for the three and six months ended June 30, 2024 assumes that the Energy Harbor Merger occurred on January 1, 2024. The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of the results of operations that would have occurred had the Energy Harbor Merger been completed on January 1, 2024, nor is the unaudited pro forma financial information indicative of future results of operations, which may differ materially from the pro forma financial information presented here.

	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
	(in millions)
Revenues	$	3,845	$	7,623
Net income	$	467	$	574

The unaudited pro forma financial information presented above includes adjustments for incremental depreciation and amortization as a result of the fair value determination of the net assets acquired, interest expense on debt assumed in the Energy Harbor Merger, effects of the Energy Harbor Merger on tax expense (benefit), and other related adjustments. Determining the amounts of revenue and earnings of Energy Harbor since the acquisition date is impractical as operations have been integrated into our commercial platform which is managed at a portfolio level.

Acquisition costs incurred in the Energy Harbor Merger totaled zero and $24 million for the three and six months ended June 30, 2024, respectively, and are classified as selling, general, and administrative expenses in the condensed consolidated statements of operations.

Acquisition of Noncontrolling Interest

On September 18, 2024, Vistra Operations and Vistra Vision Holdings I LLC, an indirect wholly owned subsidiary of Vistra Operations (Vistra Vision Holdings), entered into separate Unit Purchase Agreements (the UPAs) with each of Nuveen and Avenue, pursuant to which Vistra Vision Holdings agreed to purchase each of Nuveen's and Avenue's combined 15% noncontrolling interest in Vistra Vision for approximately $3.2 billion in cash. The UPAs contained certain closing conditions outside our control that represented conditional redemption obligations that required us to reflect the transaction as redeemable noncontrolling interest within the mezzanine section of the consolidated balance sheet as of September 30, 2024. The UPAs were amended prior to close to accelerate principal payments to Avenue and certain Nuveen noncontrolling interest holders. The transaction closed on December 31, 2024, with all closing conditions met. Upon closing, we reclassified the remaining future payments attributable to the redeemable noncontrolling interest to a financing obligation. See Note 9 for additional information.