Vistra Corp. (VST) 2022 Q3 法說會逐字稿

Good day, and welcome to the Vistra Third Quarter Earnings Call. (Operator Instructions) Please note this event is being recorded.

各位好，歡迎參加 Vistra 第三季財報電話會議。（接線員指示）請注意，本活動將被錄音。

I would now like to turn the conference over to Ms. Meagan Horn. Please go ahead.

現在我想把會議交給 Meagan Horn 女士。請開始。

Thank you. Good morning, everyone. Welcome to Vistra's investor webcast discussing third quarter 2022 results, which is being broadcast live from the Investor Relations section of our website at www.vistracorp.com. Also available on our website are copies of today's investor presentation, our Form 10-Q and the related press release.

謝謝。各位早安。歡迎收看 Vistra 投資人網路直播，我們將討論 2022 年第三季業績；本直播正透過我們網站 www.vistracorp.com 的投資人關係（Investor Relations）專區進行即時播出。我們網站亦提供今日投資人簡報、Form 10-Q 以及相關新聞稿的副本。

Joining me for today's call are Jim Burke, our President and Chief Executive Officer; and Kris Moldovan, our Executive Vice President and Chief Financial Officer. We have a few additional senior executives present to address questions during the second part of today's call, as necessary.

今天與我一同參與電話會議的有：我們的總裁兼執行長 Jim Burke，以及執行副總裁兼財務長 Kris Moldovan。視需要而定，我們也有幾位其他資深主管出席，以便在今天電話會議的第二部分回答問題。

Before we begin our presentation, I would like to note that today's press release, the slide presentation and discussions on this call, all include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are provided in the press release and in the appendix to the investor presentation available on the Investor Relations section of the company's website.

在開始簡報之前，我想提醒各位：今日新聞稿、投影片簡報以及本次電話會議的討論，均包含若干非 GAAP 財務衡量指標。與最直接可比之 GAAP 指標的調節表，已載於新聞稿以及投資人簡報附錄中，並可於公司網站的投資人關係專區取得。

Also, today's discussion will contain forward-looking statements, which are based on assumptions we believe to be reasonable only as of today's date. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or implied. We assume no obligation to update our forward-looking statements. I encourage all listeners to review the safe harbor statements included on Slide 2 in the investor presentation on our website that explain the risks of these forward-looking statements, the limitations of certain industry and market data included in the presentation and the use of these non-GAAP financial measures.

此外，今日討論將包含前瞻性陳述，該等陳述係基於我們截至今日所認為合理的假設。此類前瞻性陳述受若干風險與不確定性影響，可能導致實際結果與所預測或暗示者出現重大差異。我們不承擔更新前瞻性陳述之義務。我鼓勵所有聽眾查閱我們網站投資人簡報第 2 頁所載之「安全港」聲明，其中說明這些前瞻性陳述的風險、簡報中所含特定產業與市場資料的限制，以及這些非 GAAP 財務衡量指標的使用。

Thank you. And I will now turn the call over to our President and CEO, Jim Burke.

謝謝。接下來我將把電話會議交給我們的總裁兼執行長 Jim Burke。

Thank you, Meagan. Good morning, everyone. We plan to keep this call relatively short. We believe we have a straightforward method to deliver today. In prior calls, we've shared with you our priorities for the year. And today, we're here to share how we are successfully executing against those priorities and provide a review regarding 2023.

謝謝你，Meagan。各位早安。我們計畫讓本次電話會議相對簡短。我們認為今天要傳達的內容相當清楚。在先前的電話會議中，我們已與各位分享今年的優先事項；今天我們將說明我們如何成功落實這些優先事項，並就 2023 年提供回顧。

Starting on Slide 5. We had another strong quarter financially, earning $1.038 billion in ongoing operations adjusted EBITDA. Our Generation team performed extremely well throughout the summer. But their performance was most on display during the high heat weather events experienced in July in the ERCOT region. For example, on one particular day in July when ERCOT experienced periods of low wind and solar output, we saw our Texas generation fleet operate at its max capacity. On this day, we saw prices hit the $5,000 price cap on 3 different hours. A well-maintained fleet is key to delivering reliable power for our customers and our communities and ensuring value is captured during these weather events, and our Generation team delivered.

請看第 5 頁。我們本季財務表現再度強勁，持續營運調整後 EBITDA 達 10.38 億美元。我們的發電（Generation）團隊在整個夏季表現極佳，而其表現最明顯地展現在 7 月 ERCOT 區域所經歷的高溫天氣事件期間。舉例來說，7 月某一天 ERCOT 遭遇風電與太陽能輸出偏低的時段時，我們看到德州發電機組群以最大容量運轉。當天有 3 個不同小時的電價觸及 5,000 美元的價格上限。維護良好的機組群是為客戶與社區提供可靠電力、並在此類天氣事件中確保價值得以實現的關鍵，而我們的發電團隊做到了。

Our Retail business similarly performed well, showing its resiliency by demonstrating the ability to serve customers at attractive margins, even in light of the higher commodity cost environment. Our Retail team responded to our customers' needs and our performance reflects our deep commitment to our customers. In fact, this commitment was recently acknowledged by the PUCT when TXU Energy was recognized as a 5-star rated retailer.

我們的零售（Retail）業務同樣表現良好，展現其韌性：即使在商品成本較高的環境下，仍能以具吸引力的利潤率服務客戶。我們的零售團隊回應客戶需求，而我們的表現反映出我們對客戶的深度承諾。事實上，PUCT 近期也肯定了這項承諾，TXU Energy 獲評為 5 星級零售商。

With 3 quarters of performance now reported, we are able to narrow our previously announced guidance for ongoing operations adjusted EBITDA and ongoing operations adjusted free cash flow before growth. We now see ongoing operations adjusted EBITDA in a range of $2.96 billion to $3.16 billion and ongoing operations adjusted free cash flow before growth in a range of $2.17 billion to $2.37 billion for 2022. We're reaffirming our original midpoint of $3.06 billion of ongoing operations adjusted EBITDA for 2022. This has been a year with significant volatility in fuel prices and weather in an environment of rising inflation and yet our team is performing well and tracking at the original guidance provided last November.

目前已公布 3 個季度的表現，因此我們得以收斂先前公布的持續營運調整後 EBITDA 與持續營運調整後（成長前）自由現金流指引。我們目前預期 2022 年持續營運調整後 EBITDA 介於 29.6 億至 31.6 億美元之間；持續營運調整後（成長前）自由現金流介於 21.7 億至 23.7 億美元之間。我們重申 2022 年持續營運調整後 EBITDA 原先的中位數 30.6 億美元。今年在燃料價格與天氣高度波動、且通膨上升的環境下，我們團隊仍表現良好，並與去年 11 月提供的原始指引一致。

Due to our comprehensive hedging program to capture higher earnings in future periods, we have incurred some higher interest charges, which is reflected in our modestly lower midpoint for ongoing operations adjusted free cash flow before growth. This midpoint is now $2.27 billion. As we have discussed in the past, we took on additional short-term debt to fund the liquidity needed for our comprehensive hedging program. The hedges are locking in significant out-year earnings potential.

由於我們採行全面性的避險計畫以在未來期間鎖定更高獲利，我們承擔了較高的利息費用，這也反映在持續營運調整後（成長前）自由現金流中位數小幅下調。該中位數目前為 22.7 億美元。如同我們過去所討論的，我們增加了短期負債，以支應全面避險計畫所需的流動性。這些避險部位正在鎖定未來年度可觀的獲利潛力。

Net higher earnings power is reflected on Slide 6. Today, we are initiating guidance for ongoing operations adjusted EBITDA in a range of $3.4 billion to $4 billion and ongoing operations adjusted free cash flow before growth in a range of $1.75 billion to $2.35 billion for 2023. Our 2023 guidance midpoint of ongoing operations adjusted EBITDA is $3.7 billion. This is the top end of the midpoint opportunity range we estimated for 2023 during our first quarter call as we saw the dramatic increase in gas and power forward curves.

淨獲利能力提升反映在第 6 頁。今天我們啟動 2023 年指引：持續營運調整後 EBITDA 介於 34 億至 40 億美元之間；持續營運調整後（成長前）自由現金流介於 17.5 億至 23.5 億美元之間。2023 年持續營運調整後 EBITDA 指引中位數為 37 億美元。這是我們在第一季電話會議中、看到天然氣與電力遠期曲線大幅上升時，對 2023 年所估計中位數機會區間的上緣。

Given the higher EBITDA figures and the volatility we have seen in the market, our range is larger on an absolute basis, but is a similar percentage of the midpoint as we have had in recent years. We are confident in our ability to deliver on this value proposition for 2023, and as you know, our comprehensive hedging program extends in the future years.

鑑於 EBITDA 數字較高以及我們在市場中看到的波動，我們的區間在絕對金額上更大，但相對於中位數的百分比與近年相近。我們對於在 2023 年兌現此一價值主張充滿信心；如各位所知，我們的全面避險計畫也延伸至未來年度。

With that, I wanted to take a moment to reiterate Vistra's strategic priorities as we summarized on Slide 7. We believe these priorities are delivering and are expected to continue to deliver significant value for investors. We've previously stated that we saw annual ongoing operations adjusted EBITDA potential of around $3-plus billion going forward. As forward power curves increased, we announced Q1 2022 that we saw ongoing operations adjusted EBITDA midpoint potential in the $3.5 billion to $3.7 billion range for years 2023 through 2025.

接下來，我想花點時間重申我們在第 7 頁所總結的 Vistra 策略優先事項。我們相信這些優先事項正在創造價值，並預期將持續為投資人帶來顯著價值。我們先前曾表示，未來年度每年持續營運調整後 EBITDA 的潛力約在 30 億美元以上。隨著電力遠期曲線上升，我們在 2022 年第一季宣布，我們看到 2023 至 2025 年持續營運調整後 EBITDA 中位數潛力落在 35 億至 37 億美元區間。

We're now approximately 70% hedged on average across 2023 through 2025. Accordingly, we continue to believe in that range of earnings potential. And in turn, we are using the significant cash flows to return value to the shareholders. Vistra continues to execute on our previously announced capital allocation plan, and Kris will speak to those details momentarily. But notably, our capital allocation plan offers a robust returns per share.

目前我們在 2023 至 2025 年期間平均約已避險 70%。因此，我們仍相信該獲利潛力區間。進而，我們正運用可觀的現金流向股東回饋價值。Vistra 持續執行先前公布的資本配置計畫，Kris 稍後將說明細節。值得注意的是，我們的資本配置計畫提供強勁的每股報酬。

Looking forward to the target share repurchases and dividends under the capital allocation plan between now and year-end 2023, we have $1.2 billion of remaining authorization for share repurchases that we expect to utilize by year-end 2023, plus $375 million in dividends targeted for payment Q4 2022 through Q4 2023. That capital distributed across our current shareholder base delivers an equivalent of approximately $4 per share of capital being returned. I recognize this is a simple illustration. I only point this out to underscore the incredible value proposition we believe Vistra currently offers.

展望至 2023 年底前，依資本配置計畫進行的目標庫藏股回購與股利方面，我們尚有 12 億美元的股票回購核准額度，預期將於 2023 年底前使用完畢；另有 3.75 億美元股利，目標於 2022 年第四季至 2023 年第四季期間支付。將該等資本分配至目前股東基礎，相當於約每股回饋 4 美元的資本。我理解這只是簡化的示意；我提出此點僅為強調我們認為 Vistra 目前所提供的價值主張極具吸引力。

As a reminder, these expected cash returns are achieved even after we make the planned maintenance capital investments to ensure our fleet is well positioned for the winter and the summer. This is also after we execute on our expected debt reduction to ensure a strong balance sheet. Lastly, we expect Vistra Zero to be financed primarily with third-party capital, enabling us to continue to transition aspects of our fleet, primarily some of our older coal assets in a capital-efficient manner.

提醒各位，這些預期的現金回饋是在我們進行計畫性的維護資本投資之後仍可達成，以確保我們的機組群在冬季與夏季都具備良好準備；同時也在我們按預期進行債務削減、以確保資產負債表強健之後。最後，我們預期 Vistra Zero 將主要以第三方資本融資，使我們得以持續以資本效率較高的方式，推動機組群部分資產轉型，主要是部分較老舊的燃煤資產。

Vistra Zero will also benefit from the Inflation Reduction Act, including setting a price floor for our nuclear asset Comanche Peak. You may have seen we recently submitted the relicensing application, which would extend our licenses by 20 additional years for each of the 2 units to 2050 and 2053. We continue to see how important a role our diverse set of assets are playing throughout the U.S. in ensuring reliable, affordable and sustainable power. Our integrated model is delivering the service that our customers and communities depend upon, and we are excited to be able to share our expectations with you, our owners, that the future is bright for our company.

Vistra Zero 也將受惠於《通膨削減法案》（Inflation Reduction Act），其中包括為我們的核能資產 Comanche Peak 設定價格底線。各位可能已看到，我們近期已提交延役（relicensing）申請，將使兩部機組的執照各延長 20 年，分別至 2050 年與 2053 年。我們持續看到，我們多元化資產組合在全美各地對於確保可靠、可負擔且永續的電力供應扮演著重要角色。我們的整合式商業模式正提供客戶與社區所仰賴的服務；我們也很高興能與各位—我們的股東—分享我們的展望：公司前景光明。

I will now hand the call over to Kris to discuss this quarter's financial performance in more detail.

接下來我將把電話會議交給 Kris，請他更詳細說明本季的財務表現。

Thank you, Jim. Starting on Slide 9. As Jim mentioned, Vistra delivered strong financial results during the third quarter, with ongoing operations adjusted EBITDA of approximately $1.038 billion, including negative $2 million for Retail and $1.04 billion for Generation.

謝謝你，Jim。從第 9 頁投影片開始。如 Jim 所提到，Vistra 在第三季交出強勁的財務成果，持續營運調整後 EBITDA 約為 10.38 億美元，其中零售為負 200 萬美元，發電為 10.4 億美元。

Important to note that Vistra's full year 2022 guidance contemplated that retail would deliver negative ongoing operations adjusted EBITDA this quarter. Despite rapidly rising power prices this year, retail's results this quarter and year-to-date are bolstered by continued strong margins and customer counts in ERCOT, along with robust large business market sales performance, partially offset by higher bad debt expense and ex-ERCOT headwinds.

需要特別指出的是，Vistra 2022 全年指引原本就預期本季零售將呈現持續營運調整後 EBITDA 為負值。儘管今年電力價格快速上漲，零售本季及年初至今的表現仍受惠於 ERCOT 持續強勁的利差與客戶數，以及大型商業市場銷售表現亮眼；但部分被較高的呆帳費用與 ERCOT 以外市場的不利因素所抵銷。

Moving now to Generation. The results of the Generation segment this quarter and year-to-date have benefited from higher prices in the summer months, coupled with outstanding performance of the fleet to be available to capture those higher prices, offset by lower prices in Q1 2022, lower generation volumes from coal plants due to industry-wide fuel delivery challenges and higher-than-expected migration of customers to default service providers.

接著談發電業務。本季及年初至今，發電事業部的結果受惠於夏季月份較高的價格，加上機組群表現出色、可用度高，得以掌握較高價格；但部分被 2022 年第一季較低的價格、因全產業燃料交付挑戰導致燃煤電廠發電量下降，以及客戶轉移至預設供電商（default service providers）的幅度高於預期所抵銷。

With our financial results tracking consistently with our expectations, we continue to execute on our capital allocation plan as described on Slide 10. As of November 1, we had completed approximately $2.05 billion of share repurchases. We expect to utilize the remaining approximately $1.2 billion of authorization under the upside $3.25 billion program by year-end 2023. Notably, as of November 1, our outstanding share count had fallen to approximately 398 million shares outstanding, which represents an approximately 18% reduction from the aggregate number of shares that were outstanding as of a year ago.

由於我們的財務表現持續符合預期，我們將繼續依第 10 頁投影片所述執行資本配置計畫。截至 11 月 1 日，我們已完成約 20.5 億美元的庫藏股回購。我們預期在 2023 年底前，使用「上行」32.5 億美元計畫中剩餘約 12 億美元的核准額度。值得注意的是，截至 11 月 1 日，我們流通在外股數已降至約 3.98 億股，較一年前的流通在外總股數約減少 18%。

We also remain committed to paying $300 million in dividends to our common stockholders each year. To that end, our Board recently approved a quarterly dividend to be paid on Vistra's common stock in the amount of $0.193 per share or approximately $75 million in the aggregate, payable on December 29, 2022. This is an approximately 29% growth in dividend per share as compared to the dividend paid in the fourth quarter of 2021.

我們也持續承諾每年向普通股股東支付 3 億美元股利。為此，我們董事會近期核准 Vistra 普通股每季股利為每股 0.193 美元，合計約 7,500 萬美元，將於 2022 年 12 月 29 日支付。相較於 2021 年第四季支付的股利，此次每股股利約成長 29%。

While returning cash directly to our shareholders remains a priority, we will continue to focus on maintaining a strong balance sheet. Importantly, we have not deviated from our long-term net leverage target, excluding any nonrecourse debt at Vistra Zero of less than 3x. On our second quarter call, we noted that we expected to repay at least $2.5 billion in the second half of the year, and we made significant progress this quarter repaying approximately $1.4 billion of debt. We expect to repay an additional $1.1 billion of debt by year-end.

在直接回饋現金給股東仍為優先事項的同時，我們將持續專注於維持強健的資產負債表。重要的是，我們並未偏離長期淨槓桿目標：扣除 Vistra Zero 的任何無追索權債務後，淨槓桿低於 3 倍。在第二季電話會議中，我們提到預期在下半年至少償還 25 億美元，而本季我們已大幅推進，償還約 14 億美元債務。我們預期在年底前再償還額外 11 億美元債務。

Finally, as we look to grow Vistra Zero, it is important to emphasize that we anticipate financing that growth by using primarily third-party capital. As Jim mentioned earlier, we have initiated guidance for ongoing operations adjusted EBITDA with a $3.7 billion midpoint for 2023. On Slide 11, we're presenting the forward power price and gas curves as of October 31, 2022. As you can see, while there has been noticeable volatility, prices are still up materially as compared to the prior year. Not only do these curves support our 2023 guidance range, but they also continue to give us confidence in the $3.5 billion to $3.7 billion of potential ongoing operations adjusted EBITDA midpoint for each of years 2024 and 2025.

最後，展望 Vistra Zero 的成長，必須強調我們預期主要透過第三方資本來為該成長提供融資。如 Jim 先前提到，我們已提出 2023 年持續營運調整後 EBITDA 指引，中位數為 37 億美元。在第 11 頁投影片，我們呈現截至 2022 年 10 月 31 日的遠期電價與天然氣曲線。可以看到，雖然波動明顯，但價格相較前一年仍大幅上升。這些曲線不僅支持我們的 2023 年指引區間，也持續讓我們對 2024 與 2025 年各年度持續營運調整後 EBITDA 的潛在中位數 35 億至 37 億美元更具信心。

As you would expect, the commercial team has continued its execution of the comprehensive hedging program that we discussed initially on the first quarter earnings call, significantly derisking and locking in our future earnings potential for these out years. As of the end of the quarter, we were approximately 70% hedged on average across all markets for 2023 through 2025, with 2023 being approximately 90% hedged.

如各位所預期，商務團隊持續執行我們在第一季財報電話會議中首次討論的全面避險計畫，顯著降低風險並鎖定未來幾年的獲利潛力。截至本季末，我們在 2023 至 2025 年各市場平均約完成 70% 的避險，其中 2023 年約完成 90% 的避險。

On Slide 12, we are providing a bit more detail around our 2023 guidance among our Retail and Generation segments. You may recall that last year, we also separately broke out our Sunset Generation segment. With several plants closing in 2022 and the very beginning of 2023 and moving from our Sunset segment to our Asset Closure segment, together with the growth of Vistra Zero, we are currently reevaluating the appropriate segments for our businesses. In light of that ongoing process, we have combined the Sunset segment with our other generation segments for 2023 guidance purposes only.

在第 12 頁投影片，我們提供 2023 年指引在零售與發電事業部之間的更多細節。各位或許記得，去年我們也將「日落發電」（Sunset Generation）事業部單獨揭露。由於多座電廠於 2022 年及 2023 年初關閉，並自日落事業部移轉至資產關閉（Asset Closure）事業部，加上 Vistra Zero 的成長，我們目前正在重新評估各業務適當的分部劃分。鑑於此一進行中的流程，針對 2023 年指引之目的，我們已將日落事業部與其他發電事業部合併。

We currently expect to finalize any segment changes by the time we share our first quarter 2023 results. I think it is worth reiterating, execution has been and will continue to be our focus in 2022 and into 2023. Our first 9 months have delivered strong results, and we see our full year 2022 on track. We look forward to discussing our full year results on the next call.

我們目前預期在分享 2023 年第一季結果時，完成任何分部調整。我認為值得重申的是，2022 年以及進入 2023 年，我們的重點一直是、也將持續是執行力。前 9 個月我們交出強勁成果，並且看到 2022 全年進度如期。我們期待在下一次電話會議中討論全年結果。

With that, operator, we're ready to open the line for questions.

接下來，接線員，我們準備開放提問。

(Operator Instructions) And the first question will come from Michael Sullivan with Wolfe Research.

（接線員指示）第一個問題來自 Wolfe Research 的 Michael Sullivan。

I was just hoping maybe you could start with just some color on some of the moving pieces relative to the last call. It seemed like '22, you were tracking a little better than the midpoint. Now at the midpoint, '23, you're kind of at the higher end of that range. So maybe just a little more color on what kind of move between the 2 years from the last call. Is it just commodity prices or anything else going on?

我想先請你們談談相較上次電話會議，一些變動因素的背景說明。看起來 2022 年你們的表現略優於中位數，但現在回到中位數；而 2023 年你們則落在區間的較高端。能否多說明一下，從上次電話會議到現在，兩個年度之間的變化是什麼造成的？只是商品價格，還是還有其他因素？

Yes. Sure, Michael. So for '22, we were tracking a little bit above midpoint when we talked last time. We see ourselves closer to midpoint at the moment. I think we've seen some headwinds with coal constraints that we assume earlier in the year and even through the summer. We were getting some indications that coal deliveries will pick up. That has been a slower process not just for us, but I think from everything we can tell industry-wide. So that's one of the headwinds.

可以的。當然，Michael。就 2022 年而言，上次我們談到時確實略高於中位數；目前我們認為更接近中位數。我想我們遇到一些逆風，來自燃煤供應受限，這是我們在年初甚至整個夏季就已納入假設的。我們曾收到一些訊號顯示煤炭交付會回升，但這個過程比預期更慢，不只我們如此，從我們所能判斷的情況看，整個產業都是如此。所以這是其中一項逆風。

The other headwind that we mentioned is we picked up some default service load. We had bid on that load last year and even as late as early this year before the price ran up. As that -- as the market moved up in the spring and the summer, customers have the opportunity to move to default service. That's their choice. In addition to that, there was one media aggregation, NOPEC, that actually en masse moved all their customers to default service. We're not sure that, that actually was provided for in the structure of default service, but it was approved by the commission in Ohio. Those headwinds that have developed even further since our last call.

我們提到的另一項逆風是，我們承接了一些預設供電（default service）負載。我們去年就對該負載投標，甚至今年年初在價格飆升之前也仍在投標。當市場在春季與夏季走高時，客戶有機會轉到預設供電，這是他們的選擇。此外，還有一個媒體聚合機構 NOPEC，實際上集體把所有客戶轉到預設供電。我們不確定這是否原本就被納入預設供電的制度設計，但在俄亥俄州已獲主管機關核准。這些逆風自上次電話會議以來又進一步發展。

So when we look at the year, we've been able to offset those. So we have had very good performance on the Retail business. We've had good performance with the summer, as we mentioned in the script. And so we had length, we were able to cover those headwinds. And I think the integrated model shows diversification paid off. But I think that's really the driver as to why we saw ourselves tracking slightly above midpoint before, and now we see it on midpoint. But the operational excellence of the fleet in the Retail business has been quite strong.

因此，當我們回頭看今年，我們已能抵銷這些影響。我們的零售業務表現非常好；如同講稿所述，我們也受惠於夏季表現。因此我們有多頭部位（length），得以覆蓋這些逆風。我認為整合式商業模式顯示多元化帶來回報。我想這就是為什麼先前我們看起來略高於中位數，而現在回到中位數的主要原因。不過，機組群與零售業務的營運卓越表現一直相當強勁。

And as it relates to '23, some of the default service carries over into the May -- through the May time frame. And we also had to recognize that the coal constraints has been a rolling issue. So we have just modest improvement now assumed in 2023 for coal deliveries. We're still not running everything that we could run from the coal fleet even in the 2023 plan. So I think there's a little bit of conservatism and it's just something we've learned throughout this year that it's a tough market. It's a tough challenge just to basically free up the supply chain and have the train sets running and the quantity and the cycle times that we would like. So we reflected that here.

至於 2023 年，部分預設供電會延續到 5 月前後。此外，我們也必須認知到燃煤供應受限是一個持續滾動的問題。因此在 2023 年，我們僅假設煤炭交付有小幅改善。即使在 2023 年計畫中，我們仍未讓燃煤機組群能夠把可運轉的量全部跑滿。我想這反映了一些保守性，也是我們今年一路學到的：這是一個艱難的市場與挑戰，要讓供應鏈真正順暢、讓列車編組運行，以及達到我們希望的供應量與週轉時間並不容易。因此我們在此做了反映。

And I think the upper end -- $3.5 billion to $3.7 billion, we mentioned that on our first week call in May, and we're at the upper end of that midpoint. And so we feel good about being able to weather this volatility. But those are the headwinds and some of the tailwinds that we've reflected now in this guidance.

另外，關於上緣——35 億到 37 億美元——我們在 5 月第一週的電話會議中就提過，而我們目前位於該中位數的上緣。因此我們對於能夠度過這些波動感到有信心。不過，以上就是我們在這次指引中所反映的逆風與部分順風因素。

Okay. That's super helpful. And then my next question was just, as we look out to '24, '25, it seemed like previously given a bigger unhedged position, you built maybe even better out there and just latest thoughts on how you're feeling since the Q2 call.

好的。這非常有幫助。接著我下一個問題是，當我們展望到 '24、'25 時，先前看起來在較大的未避險部位下，你們在那段期間可能建立了甚至更好的狀態；想請教自從第二季電話會議以來，你們最新的看法與感受如何。

Yes. On Slide 11, you see the direction of the curves, and we've tried to -- we knew when we put this out, the first week of May, that we'd be asked for continuous updates on this. So we added potentially our disclosure on a more consistent basis now for the third call.

是的。在第 11 張投影片上，你可以看到曲線的走向；我們也嘗試——我們在 5 月第一週發布這個內容時就知道，大家會要求我們持續更新。因此，到了第三次電話會議，我們現在可能會以更一致的方式加入相關揭露。

But you see the run-up, late spring and summer, and then you see it coming back off pretty hard, we had been hedging through that period. And I think that's the value of the comprehensive hedging program. So we were a little bit more bullish about where we saw things. Obviously, when you're in the middle of the summer and the curves were peaking and you had the unhedged position, we were able to hedge through some of that, but the curves have come off, and we are actually still through this chart showing that through October 31 curves, which is certainly much lower than where they were at the peak of the summer because we've increased our hedge percentage now to 70% across the years, we still feel good about the $3.5 billion to $3.7 billion.

但你可以看到在晚春與夏季的快速上升，接著又看到它大幅回落；我們在那段期間一直在做避險。我認為這就是全面性避險計畫的價值所在。所以我們對走勢的看法稍微更偏多一些。顯然，當你在夏季中段、曲線達到高峰且你有未避險部位時，我們能夠針對其中一部分進行避險；但曲線已經回落，而我們這張圖表實際上仍是呈現截至 10 月 31 日的曲線，這當然遠低於夏季高峰時的水準。由於我們已將各年度的避險比例提高到 70%，我們對 35 億至 37 億美元仍然感到有信心。

So again, it's a predictable set of cash flows as far as we can see. We obviously aren't fully hedged. But I think we haven't been trying to time the high and the low. We've been working through this. And I think showing that $3.5 billion to $3.7 billion is still there and our expectations for '24 and '25 is a sign of that integrated model working.

所以再說一次，就我們所能看到的而言，這是一組可預測的現金流。我們顯然並非完全避險。但我認為我們並沒有試圖去抓高點或低點，而是一路按計畫推進。我認為，35 億至 37 億美元仍然存在，以及我們對 '24 與 '25 的預期，顯示這個整合式模型正在發揮作用。

Okay. That's great. And just real quick, the last one, again, kind of back to the bridge to '23. What are the positives on the retail side? If I just look at kind of where you are year-to-date, something like $564 million and then the range for next year, it's kind of close to $1 billion. Yes. What are the tailwinds there that could be up for next year?

好的。很棒。再很快問最後一個，同樣有點回到通往 '23 的橋接。零售端有哪些正面因素？如果我看你們年初至今大約是 5.64 億美元，然後明年的區間大概接近 10 億美元。是的。明年有哪些順風因素可能推動上行？

Yes, we continue -- one of the things we've been able to do this year, which has been a benefit for customers is we forward by, obviously, as you'd expect, in our retail business because our customers expect predictable pricing. And so we've seen our rates move up on existing customers, on average, about 10% this year. So in the aggregate of the inflationary effects and even the price spikes of commodities, I think we've done a nice job smoothing that out for our customer base.

是的，我們持續——今年我們能做到的一件事，對客戶而言是一項好處，就是我們會提前鎖定（forward buy），這在我們的零售業務中當然如你所預期，因為客戶期待可預測的定價。因此，我們看到既有客戶的費率今年平均上調約 10%。所以整體而言，面對通膨效應甚至大宗商品的價格飆升，我認為我們在為客戶群平滑這些波動方面做得不錯。

As you look at what's going on when you move forward, we do have continued movement in our expectations on average of how we smooth out the prices for customers. So we have even greater margin realization as we go forward, which is a tailwind. We also are seeing -- we've had great margin management this year. We see that continuing. The count story has been very good at ERCOT, and that continues. And even our Midwest, Northeast business, which has been more challenged because of the default service, price is lagging. The same topic I just mentioned about default service migration. It makes it difficult for retail businesses to compete against that. We see that improving in the Midwest, Northeast improving next year as well.

當你往前看目前的情況，我們對於如何在平均層面為客戶平滑價格的預期仍在持續調整。因此，隨著時間推進，我們會實現更高的利潤落地（margin realization），這是一項順風。我們也看到——今年我們的利潤管理做得很好，我們預期這會延續。ERCOT 的用戶數（count）表現非常好，而且仍在持續。甚至在我們的中西部、東北部業務，因為預設服務（default service）而更具挑戰、價格調整落後——也就是我剛提到的預設服務移轉（default service migration）同一個議題——這使得零售業務很難與之競爭。我們看到中西部、東北部的情況在明年也會改善。

So Retail business is in a very good position. It's having a very good year this year, and we expect that to continue to improve. We also have a little bit less Retail bill credits that we have as a post-theory effect where we have no credits for settling large customers. We have less of that in '23 versus '22. So those are the key drivers of the improvement in that business.

因此，零售業務處於非常好的位置。今年表現非常好，我們預期這將持續改善。另外，我們的零售帳單抵扣（Retail bill credits）也稍微少一些，這是某種後續效應（post-theory effect）：我們在結算大型客戶時不再有抵扣；在 '23 相較於 '22，這部分更少。以上是該業務改善的關鍵驅動因素。

The next question will come from Paul Zimbardo with Bank of America.

下一個問題來自美國銀行（Bank of America）的 Paul Zimbardo。

To start out with, could you discuss the drivers on the 2023 free cash flow conversion? I know you had a 65% target at the Analyst Day in the past. So just curious is kind of 2023 a blip? And do we get back there in the future?

首先，能否談談 2023 年自由現金流轉換率（free cash flow conversion）的驅動因素？我知道你們在先前的分析師日（Analyst Day）有 65% 的目標。所以想了解 2023 年是否只是短暫波動（blip）？未來會回到那個水準嗎？

Yes. Paul, the free cash flow conversion from a historical standpoint, we've obviously seen revenues go up because we have inflation that's affected some of the raw commodities. Some of that also affects our cost of doing business, including our CapEx assumption. So we have more outages next year. It's actually just a function of the starts of the units and the run hours. So we have more outages planned for actually '23 and '24, and that's predictable. We can see that peak in '23 and '24, and then it comes off for the next 3 to 4 years.

是的，Paul。從歷史角度看自由現金流轉換率，我們顯然看到營收上升，因為通膨影響了一些原物料大宗商品。其中一部分也會影響我們的營運成本，包括我們對資本支出（CapEx）的假設。因此，我們明年會有更多停機檢修（outages）。這其實只是機組啟動次數與運轉時數的函數。所以我們在 '23 與 '24 實際上規劃了更多停機檢修，而且這是可預測的。我們可以看到在 '23 與 '24 達到高峰，然後在接下來 3 到 4 年回落。

So we have higher CapEx, and some of the CapEx is more expensive because of the inflation drivers. We also have more interest expense. That's a function of our comprehensive hedging program. You can see some of those drivers, obviously, in the back of the release in terms of some of the reconciliations between our EBITDA and our free cash flow. Obviously, the inflation does affect the revenue line, but it does affect some of the cost drivers, as I just mentioned, interest rates. We have more borrowings at this point, and we have slightly higher interest that's unhedged that we have. But we do have some interest rate swaps in place as well. But those are the key drivers. And Kris, if there's something you'd like to add there, please?

因此我們的資本支出更高，而且部分資本支出因通膨因素而更昂貴。我們的利息費用也更高，這是我們全面性避險計畫的結果。你可以在新聞稿後段看到其中一些驅動因素，例如我們 EBITDA 與自由現金流之間的部分調節（reconciliations）。顯然，通膨會影響營收項目，但也會影響一些成本驅動因素，如我剛提到的利率。我們目前借款較多，且有一部分未避險的利息略高。不過我們也有一些利率交換（interest rate swaps）在位。以上是主要驅動因素。Kris，如果你想補充什麼，請說？

No, Jim, I think you've covered the drivers well.

沒有，Jim，我想你已經把驅動因素講得很完整了。

Okay. Great. And then separately, I know you're running a lot of promotions in Texas over the summer. Could you just discuss what you've seen on kind of retail customer attrition? And just unpacking a little bit. It looks like customer count was down quarter-over-quarter, and you talked about like value-accretive exits. If you could just elaborate a little bit there.

好的。很棒。然後另外，我知道你們夏季在德州做了很多促銷。能否談談你們看到的零售客戶流失（attrition）情況？再稍微拆解一下：看起來客戶數量（customer count）季對季下降，而你們提到像是「具價值增益的退出」（value-accretive exits）。能否再多說一點？

Yes. Thank you, Paul. The retail market in Texas is a robust market. We have done extremely well this year. Part of it is the innovation that you mentioned. We've been able -- in fact, we rolled out an EV miles program just this week. We have a lot of those flexibilities in Texas because the retailer gets to do the billing. We get to design the products that customers are looking for, and that gives us a chance to differentiate.

是的。謝謝你，Paul。德州的零售市場非常強健。我們今年表現非常好。其中一部分來自你提到的創新。我們已經能夠——事實上，我們就在本週推出了 EV miles 計畫。在德州我們有很多彈性，因為零售商可以負責帳單開立（billing）。我們可以設計客戶想要的產品，這讓我們有機會做出差異化。

And our accounts have actually been very strong in ERCOT and we've seen ourselves hold, I think, this position of a trusted brand, and that is one of the positives from '22 going into '23. These exits that have occurred in other markets are a function of the fact that some of these other market designs, they still don't let the retailer do the billing. You're still competing against default rates. And if those default rates lag, like we've seen a lag this year in particular, it becomes unprofitable to stay in some of these markets. And so you end up in these boom-bust cycles. In fact, I think the default markets could end up seeing peak pricing, and then you'll see the retailers rush back in and pull these customers off default.

而且我們在 ERCOT 的帳戶實際上一直非常強勁；我認為我們也維持了「值得信賴的品牌」這個定位，這是從 '22 進入 '23 的一項正面因素。其他市場出現的這些退出，原因在於某些市場設計仍不允許零售商負責帳單開立。你仍在與預設費率（default rates）競爭。而如果那些預設費率調整落後——像我們今年特別看到的落後——那麼留在某些市場就會變得無利可圖。於是你會落入這種景氣循環（boom-bust cycles）。事實上，我認為預設市場可能最終會看到價格見頂，然後你會看到零售商再度蜂擁而入，把這些客戶從預設服務中拉出來。

So there were 2 things happened. On New York, we actually left the New York market because the regulatory scheme said you had to offer a discount to the default rate. So that became untenable. Once the default rate is not moving, and you have to offer a discount to that, it becomes unprofitable. It's unfortunate because it was a very good customer base. But we have to look at this and be realistic that if the market design is not there to be able to recover your cost, you need to exit. Connecticut was a different story prior to our acquisition of Crius. There was concern from the regulatory body about some of the bill disclosures and when contract term would end for customers, they wanted to see us settle that matter.

所以發生了兩件事。第一，在紐約，我們實際上退出了紐約市場，因為監管架構規定你必須提供相對於預設費率的折扣。因此這變得不可行。一旦預設費率不動，而你又必須對它提供折扣，就會變得無利可圖。很可惜，因為那是一個非常好的客戶群。但我們必須務實地看待：如果市場設計無法讓你回收成本，你就需要退出。康乃狄克則是另一個故事，在我們收購 Crius 之前，監管機構對某些帳單揭露以及客戶合約期限何時結束有所疑慮，他們希望我們把這件事解決。

And one of the terms of settlement was they asked us to give up our licenses in Connecticut. It's happened before we ever got the business. It seemed shortsighted from the standpoint that the customer impact wasn't even determined to necessarily be negative. It was a question about how clear was the disclosure around the termination of a contract plan. But as I mentioned earlier, if you're competing at default rates, and you do not have the ability to differentiate your product with the customer, you're essentially a line item on a bill and you're competing on price and that's a difficult proposition.

而和解條款之一是，他們要求我們放棄在康乃狄克的執照。這是在我們取得該業務之前就發生的。從某種角度看這似乎是短視的，因為對客戶的影響甚至未必被認定為負面。問題在於：關於合約方案終止的揭露是否足夠清楚。但如我先前提到的，如果你是在預設費率下競爭，而你又沒有能力在客戶端讓產品差異化，你本質上就只是帳單上的一個項目，只能在價格上競爭，這是一個很困難的命題。

So we have to work to change the mindset of some of these marketplaces to be able to open them up to differentiation. I do think other brands entering the space like Tesla, Shell, BP, can help bring other voices to the table. I think a lot of this is the follow on to the polar vortex in 2014, where there was a lot of concern about how retailers needed to try to recover their cost and prices were moving very, very quickly. And we've got to restore confidence in some of these other markets outside of Texas to be able to differentiate like we do here.

因此，我們必須努力改變其中一些市場的思維模式，才能讓它們對差異化開放。我確實認為，像特斯拉（Tesla）、殼牌（Shell）、英國石油（BP）等其他品牌進入這個領域，能夠把更多不同的聲音帶到談判桌上。我認為，這在很大程度上是2014年極地渦旋事件的延續，當時大家非常擔心零售商需要如何設法回收成本，而價格變動非常、非常迅速。我們必須在德州以外的其他市場重建信心，才能像我們在這裡一樣進行差異化。

And the final question for today will come from Angie Storozynski with Seaport.

今天最後一個問題將由Seaport的Angie Storozynski提出。

So just first, one follow-up on the free cash flow projections. It's actually for both 2022 and 2023. I think I'm a little bit confused about working capital changes and new collateral postings. I'm assuming that collateral is coming back. So I was actually hoping for some boost to free cash flow in '23. So again, maybe if you could talk both about collateral postings and the free cash flow projection.

首先，關於自由現金流預測有一個追問，實際上是針對2022年和2023年。我對營運資金變動以及新增擔保品（collateral）繳存有點困惑。我假設擔保品會退回來。所以我原本希望在2023年自由現金流能有一些提振。因此，再次請你談談擔保品繳存以及自由現金流的預測。

Yes, Angie, thanks for the question. So we do expect the collateral to be posted. As you can -- as you saw, we just -- we have just over $3 billion of cash still posted as of 9/30. We expect a significant amount of that to come back over the balance of the year and into 2023. What you would note though is the margin deposits and working capital, we don't -- that doesn't get reflected in our adjusted free cash flow number. So it's below that line. But we do expect over the next 14 months to receive a substantial portion of the cash flow, that $3 billion that we have to return to us. And that's factored into our capital allocation discussions as far as the amount of share repurchases that we plan, the dividends and the debt repayments.

是的，Angie，謝謝你的問題。我們確實預期會繳存擔保品。正如你所看到的，截至9/30我們仍有略高於30億美元的現金處於繳存狀態。我們預期其中相當大一部分會在今年剩餘期間以及進入2023年後退回。不過你需要注意的是，保證金存款（margin deposits）與營運資金，我們不會把它反映在調整後自由現金流（adjusted free cash flow）的數字裡，所以它是在那條線以下。但我們預期在未來14個月內，將收回相當大一部分現金流，也就是我們必須退回給我們的那30億美元。這也已納入我們的資本配置討論，包括我們計畫的庫藏股回購規模、股利以及償還債務。

Okay. So what's the reason why there is this big positive from working capital perspective this year and basically offsetting negative next year?

好的。那為什麼今年從營運資金角度看會有這麼大的正向貢獻，而明年基本上又被負向抵銷呢？

I think, Angie, what we're seeing in the disclosures from the EBITDA to free cash flow is that we are seeing -- obviously, from EBITDA to free cash flow, we see some drivers through CapEx and interest expense. We are expecting the return of working capital and margin deposits net through 2023, and we'll see that as part of our capital allocation, as Kris mentioned, with our share buybacks or dividends and obviously, our debt pay down.

我想，Angie，我們在從EBITDA到自由現金流的揭露中看到的是——顯然，從EBITDA到自由現金流，我們會看到一些驅動因素來自資本支出（CapEx）和利息費用。我們預期到2023年，營運資金與保證金存款的回收將以淨額形式體現，而我們也會如Kris所提到的，將其納入資本配置的一部分，用於股票回購或股利，當然也包括償還債務。

Okay. Okay. And then secondly, on the guidance, right, for '23. So you were 90% hedged, and I appreciate all the volatility that you're seeing in energy markets. But that's quite a wide range. So can you just give me a sense, for example, what is it that you're trying to hedge against? Is it, as you mentioned, some issues with coal supplies? Is it performance issues of your power plants? Again, just what can take me to the high end versus the low end?

好的。好的。第二個問題是關於2023年的指引。你們已經對沖了90%，我也理解你們在能源市場看到的高度波動。但這個區間仍然相當寬。你能否讓我了解一下，例如你們主要是在對沖什麼？是你提到的煤炭供應問題嗎？還是電廠的運轉表現問題？再說一次，究竟哪些因素會讓結果落在高端或低端？

Sure. Well, there's a number of things. Even the 90% still has quite a bit at elevated prices. That unhedged part is still a meaningful part of the various drivers. We also assume that there's volatility in the marketplace, and that volatility is something we can capture, and that's what we did over the month of July when we had higher prices, tighter supply-demand. We saw that some in PJM. We obviously saw it a little bit in CAISO.

當然。原因有很多。即使是90%的對沖比例，仍有相當一部分是以較高價格水準鎖定的。未對沖的那一部分，對各項驅動因素而言仍然具有實質影響。我們也假設市場存在波動，而這種波動是我們可以捕捉的——這正是我們在7月份所做的，當時價格更高、供需更緊。我們在PJM看到了一些情況，當然在CAISO也看到了一點。

So we assume that there's an element of volatility in the marketplace and that we can capture some of that, either because prices move up and we're able to capture that incremental output at a higher margin, or if prices actually move down, we can actually not run the assets and buy back in the marketplace. And that's sort of what we call extrinsic value, is part of the value that we anticipate when we set guidance. So that's part of the expectations that we said when we put the $3.7 billion out in the market.

因此，我們假設市場中存在一定程度的波動，而我們可以捕捉其中一部分：要麼價格上升，我們能以更高的毛利捕捉到額外的發電量；要麼價格下跌，我們可以選擇不運轉資產，轉而在市場上回購。這就是我們所謂的外在價值（extrinsic value），也是我們在設定指引時預期的一部分價值。因此，這也是我們在向市場提出37億美元指引時所包含的預期之一。

We also have some assumption. I said it's modest of coal being able to be delivered slight improvement over 2022 actuals. It could still move south from here. I mean we do not know how all of this is going to get resolved. They're still in negotiation. They're trying to get the rail agreement that would work for all of the unions involved. But we don't have perfect foresight into how that will play out. That also could be a positive. We can actually get past that and get to the sense that we already have security to get the cycle times where they need to be. That would be upside potentially to our guidance.

我們也有一些假設。我提到過，煤炭交付能力的改善幅度不大，會較2022年的實際情況略有改善，但也可能從目前情況轉差。我的意思是，我們不知道這一切最終會如何解決。他們仍在談判，試圖達成一項能讓所有相關工會都接受的鐵路協議。但我們無法完全預見其結果。這也可能成為正面因素：如果我們能跨過這個問題，並確信我們已具備安全保障，能把週轉時間（cycle times）拉回到所需水準，那可能會對我們的指引帶來上行空間。

And then lastly, we still have weather variance even in Retail. We do hedge Retail conservatively and have paid off for our customer base this year. It's paid off for our Retail performance. But if you had mild weather, you could actually find yourself long power in the Retail business and having to sell that back in the market at reduced prices. And so when prices get elevated, then the variances around and volumetrically become bigger on a dollar basis. That's why we kept about an 8% band around the midpoint similar to prior years, just larger on an absolute basis.

最後，即便在零售業務（Retail）方面，我們仍然面臨天氣差異（weather variance）。我們對零售採取保守的對沖策略，今年對我們的客戶群帶來了好處，也對我們的零售表現帶來了好處。但如果天氣溫和，你可能會在零售業務中出現電力多頭（long power）的情況，必須把多餘電力以較低價格賣回市場。因此，當價格走高時，無論是偏差或是量的變動，換算成金額的影響都會更大。這就是為什麼我們在中位數附近維持約8%的區間，與往年類似，只是絕對金額更大。

Okay. And then lastly, again, I might have missed it in your deck -- in your slides. I was hoping for more disclosures on cash available for distributions and drivers year-over-year. And I appreciate some of the comments you have made in your prepared remarks. But should we expect something like that, like cash available for distribution, so we have a better sense of how much can be deployed into either additional buybacks and/or dividends?

好的。最後一個問題，我可能在你們的簡報——投影片裡漏看了。我希望能看到更多關於可供分配的現金（cash available for distributions）以及其年對年驅動因素的揭露。我也感謝你在事先準備的發言中提到的一些評論。但我們是否可以期待你們提供類似「可供分配現金」這樣的指標，讓我們更清楚有多少資金可以用於額外回購和／或股利？

Yes, Angie. So thank you, again. We continue to talk about being able and in position to spend $300 million a year on the dividend, $1 billion -- at least $1 billion a year on share repurchases and paying down debt to get to 3x, which, primarily, we can get there, as you can see, as working capital comes back -- as margin deposits come back, we could use that money to pay down debt.

是的，Angie，再次謝謝你。我們持續強調，我們有能力且處於可以每年支付3億美元股利、每年至少10億美元股票回購，並透過償還債務把槓桿降到3倍的狀態。主要是，正如你所看到的，隨著營運資金回流——隨著保證金存款回流——我們可以用那筆錢來償還債務。

We also still have some proceeds from the green preferred to allocate. But we're tracking well right at where we thought we would track when we came out with that cash available for allocation last year in November. We did upsize the share repurchases by 250 million to reflect some confidence in additional free cash flow. We'll continue to evaluate as we move through the time period and we -- as we have additional cash to allocate what's the best use of that cash. But we're still committed to at least $1 billion a year of share repurchases and the $300 million dividend and getting our leverage to 3x -- just under 3x.

我們也仍有部分綠色優先股（green preferred）的收益可供配置。不過，我們目前的進度與去年11月提出「可供配置現金」時所預期的軌跡相當一致。由於對額外自由現金流更有信心，我們將股票回購規模上調了2.5億美元。我們會在接下來的期間持續評估，隨著有更多可配置現金，該如何使用才是最佳用途。但我們仍承諾每年至少10億美元的股票回購、3億美元的股利，並將槓桿降至3倍——略低於3倍。

Okay. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Burke for any closing remarks. Please go ahead, sir.

好的。問答環節到此結束。我想把電話會議交回給Jim Burke先生，請他做結語。先生，請繼續。

Yes, I want to thank you again for joining us this morning. We're excited about Vistra's continued value proposition, and we appreciate your continued interest in Vistra, and we look forward to speaking to you again in a few months when we will discuss our fourth quarter and our full year performance. Have a good morning. Thank you.

是的，我想再次感謝各位今天早上參與。我們對Vistra持續的價值主張感到振奮，也感謝各位持續關注Vistra。我們期待在幾個月後再次與各位交流，屆時我們將討論第四季以及全年表現。祝各位早安。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

本次電話會議已結束。感謝各位參加今天的簡報。您現在可以掛線。