Vistra Corp (VST) 2022 Q4 法說會逐字稿

Good morning, and welcome to the Vistra's Fourth Quarter and Full Year Results Conference Call. (Operator Instructions) Please note, this event is being recorded.

早上好，歡迎參加瑞致達第四季度和全年業績電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Meagan Horn, Vice President of Investor Relations. Please go ahead.

我現在想將會議轉交給投資者關係副總裁 Meagan Horn。請繼續。

Thank you. Good morning, everyone, and welcome to Vistra's investor webcast, discussing fourth quarter and full year 2022 results, which is being broadcast live on the Investor Relations section of our website at www.vistracorp.com. Also available on our website are a copy of today's investor presentation, the related press release and recent annual and quarterly reports on Forms 10-K and 10-Q.

謝謝。大家早上好，歡迎收看瑞致達的投資者網絡廣播，討論第四季度和 2022 年全年業績，該網絡廣播正在我們網站 www.vistracorp.com 的投資者關係部分現場直播。我們的網站上還提供今天的投資者介紹、相關新聞稿以及最近的 10-K 和 10-Q 表格年度和季度報告的副本。

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.

我們的總裁兼首席執行官 Jim Burke 和我一起參加今天的電話會議；和我們的執行副總裁兼首席財務官 Kris Moldovan。必要時，我們還有幾位高級管理人員出席今天電話會議的第二部分，以解決問題。

Before we begin our presentation, I would like to note that today's press release, 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 in the Investor Relations section of the company's website. 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 statement included on Slide 2 of the investor presentation on our website that explain the risks and forward-looking statements, the limitations of certain industry and market data included in the presentation and the use of non-GAAP financial measures.

在我們開始演講之前，我想指出，今天的新聞稿、幻燈片演示和本次電話會議的討論都包括某些非 GAAP 財務指標。新聞稿和公司網站“投資者關係”部分提供的投資者介紹附錄中提供了與最直接可比的 GAAP 措施的調節。此外，今天的討論將包含前瞻性陳述，這些陳述基於我們認為僅在今天才合理的假設。此類前瞻性陳述受某些風險和不確定性的影響，這些風險和不確定性可能導致實際結果與預測或暗示的結果存在重大差異。我們沒有義務更新我們的前瞻性陳述。我鼓勵所有聽眾查看我們網站上投資者演示文稿幻燈片 2 中的安全港聲明，該聲明解釋了風險和前瞻性陳述、演示文稿中包含的某些行業和市場數據的局限性以及非 GAAP 的使用財政措施。

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

謝謝，我現在將把電話轉給我們的總裁兼首席執行官吉姆伯克。

Thank you, Meagan. Good morning. I'm pleased to be here with you all to discuss our fourth quarter and full year 2022 results, which we believe is a positive and straightforward message. Beginning on Slide 5, as we've reiterated over these past quarters, we remain vigilant and focused on our strategic priorities throughout the year, and the 2022 results demonstrate that focus and set us up well for the future. We believe that operating an integrated business model provides the stability and consistency that our customers and our shareholders expect and our operations throughout extreme weather events this past year, we believe, have proved this thesis. You'll recall that we initiated guidance for 2022 for adjusted EBITDA from ongoing operations with a midpoint of $3.06 billion.

謝謝你，梅根。早上好。我很高興能和大家一起討論我們第四季度和 2022 年全年的業績，我們認為這是一個積極而直接的信息。從幻燈片 5 開始，正如我們在過去幾個季度重申的那樣，我們全年保持警惕並專注於我們的戰略重點，2022 年的結果證明了這一重點並為我們的未來做好了準備。我們認為，採用綜合業務模式可以提供我們的客戶和股東所期望的穩定性和一致性，我們相信，我們在過去一年的極端天氣事件中的運營已經證明了這一論點。您會記得，我們啟動了 2022 年調整後持續運營 EBITDA 的指引，中點為 30.6 億美元。

Despite extreme volatility in commodities and numerous weather events, including winter storm Elliott at the end of December, we ended the year exceeding this midpoint by $55 million. Importantly, we delivered strong adjusted free cash flows along with these higher earnings, delivering a final adjusted free cash flow before growth of $129 million above the midpoint of the narrow guidance range we introduced in the third quarter of 2022. Our integrated portfolio also supported our comprehensive hedging strategy we executed throughout 2022, with the goal of locking an out-year earnings potential in years 2023 to 2025. Kris will speak to this in more detail later, but we concluded the year at approximately 73% hedged across '23 to '25 across all markets. This hedging percentage and the current forward curves continue to support the estimated $3.5 billion to $3.7 billion midpoint of adjusted EBITDA earnings potentials in those years. And with our 2023 adjusted EBITDA guidance midpoint set at $3.7 billion, we look forward to executing squarely on these opportunities.

儘管大宗商品出現極端波動和無數天氣事件，包括 12 月底的冬季風暴 Elliott，但我們在年底時超出了這個中點 5500 萬美元。重要的是，我們提供了強勁的調整後自由現金流以及這些更高的收益，最終調整後的增長前自由現金流比我們在 2022 年第三季度引入的狹窄指導範圍的中點高出 1.29 億美元。我們的綜合投資組合也支持我們我們在整個 2022 年執行了全面的對沖策略，目標是鎖定 2023 年至 2025 年的年外收益潛力。Kris 稍後將對此進行更詳細的討論，但我們在這一年結束時在“23 年至”期間進行了約 73% 的對沖25 在所有市場。這一對沖百分比和當前的遠期曲線繼續支持那些年調整後 EBITDA 盈利潛力中值估計為 35 億至 37 億美元的中點。我們將 2023 年調整後的 EBITDA 指引中點定為 37 億美元，我們期待著抓住這些機會。

We continue to see Vistra generate significant cash flows and our strategic priorities remain focused on returning meaningful value to our shareholders. Kris will provide a detailed update on our capital allocation plan, but I will note that we returned approximately $2.25 billion to shareholders via our share repurchase program from November 2021 through December 2022, approximately $250 million more than we had originally planned. Additionally, we paid out $300 million in common stock dividends in 2022, as planned, with each quarter's dividend per share growing as the share count was reduced. The fourth quarter dividend paid in December 2022 represented a 29% increase over the fourth quarter dividend paid in December of '21. We expect shareholders to continue to experience increases in dividend returns into 2023 as we expect to continue to pay out an aggregate $300 million in annual dividends due to decreasing number of shares of Vistra common stock.

我們繼續看到瑞致達產生大量現金流，我們的戰略重點仍然集中在為股東回報有意義的價值上。 Kris 將提供我們資本分配計劃的詳細更新，但我要指出的是，從 2021 年 11 月到 2022 年 12 月，我們通過股票回購計劃向股東返還了約 22.5 億美元，比我們原計劃多出約 2.5 億美元。此外，我們按計劃在 2022 年支付了 3 億美元的普通股股息，隨著股份數量的減少，每個季度的每股股息都在增長。 2022 年 12 月支付的第四季度股息比 2021 年 12 月支付的第四季度股息增加了 29%。我們預計股東的股息回報將在 2023 年繼續增加，因為由於 Vistra 普通股數量減少，我們預計將繼續支付總計 3 億美元的年度股息。

We remain vigilant this year in maintaining a strong balance sheet. While our debt balance did grow to provide the liquidity we needed to support our comprehensive hedging strategy, we achieved our goal of a sub-3x leverage after margin deposits are considered at year-end. We held our debt capacity steady at year-end as we saw less return of margin than originally expected. We have seen the margin deposits start to return to us in the first quarter of 2023, and we continue to actively manage our liquidity and focus on opportunistic timing and structures to further optimize our balance sheet. With the goal to achieve our long-term sub-3x debt leverage ratio target on a pre-margin deposit basis over time.

今年，我們對保持強勁的資產負債表保持警惕。雖然我們的債務餘額確實有所增長以提供我們支持全面對沖策略所需的流動性，但在年底考慮保證金存款後，我們實現了低於 3 倍槓桿率的目標。我們在年底保持債務能力穩定，因為我們看到利潤率回報低於原先預期。我們已經看到保證金存款在 2023 年第一季度開始返還給我們，我們將繼續積極管理我們的流動性，並專注於機會主義的時機和結構，以進一步優化我們的資產負債表。隨著時間的推移，我們的目標是在預保證金存款的基礎上實現我們低於 3 倍的長期債務槓桿率目標。

Finally, we are proud of the results we saw in our Vistra Zero business this past year. We added over 400 megawatts of renewable and storage capacity in 2022, and we expect to add another 350 megawatts of storage capacity in California at our Moss Landing Phase 3 facility in mid-2023. We also retired approximately 2,900 megawatts of Ohio and Illinois coal facilities at our Zimmer, Joppa and Edwards plants. We appreciate the dedication of our teams who work at these sites for decades, powering our communities and always with a sharp focus on safety. We are pleased to be able to redevelop these sites in the future Vistra Zero energy facilities. Notably, the Joppa and Edwards sites are part of our Illinois Coal to Solar program where we are transitioning numerous sites into solar and/or storage facilities.

最後，我們為過去一年在 Vistra Zero 業務中看到的成果感到自豪。我們在 2022 年增加了超過 400 兆瓦的可再生能源和存儲容量，我們預計在 2023 年年中在加利福尼亞州的莫斯蘭丁三期設施中再增加 350 兆瓦的存儲容量。我們還在 Zimmer、Joppa 和 Edwards 工廠淘汰了約 2,900 兆瓦的俄亥俄州和伊利諾伊州煤炭設施。我們感謝幾十年來在這些地點工作的團隊的奉獻精神，他們為我們的社區提供動力，並始終高度關注安全。我們很高興能夠在未來的瑞致達零能源設施中重新開發這些地點。值得注意的是，約帕和愛德華茲站點是我們伊利諾斯州煤改太陽能計劃的一部分，我們正在將許多站點轉變為太陽能和/或存儲設施。

Turning to Slide 6. We had a strong 2022, ending the year with $3.115 billion of ongoing operations adjusted EBITDA. This is $55 million above the $3.06 billion midpoint we said in the third quarter of 2021. We achieved nearly $2.4 billion of adjusted free cash flow before growth, $129 million higher than the narrowed guidance midpoint we set in the third quarter of '22. Our financial achievements were underscored by the strong performance of our retail and generation teams. Our flagship retail brand TXU Energy continues to execute well, growing Texas residential customers nearly 2% year-over-year, while maintaining its PUCT 5-star rating. Our Generation team has proven its ability to perform in extreme weather conditions in both the summer and winter months, optimizing the maintenance of our fleet to stand ready to perform when needed.

轉到幻燈片 6。我們在 2022 年表現強勁，年底持續運營調整後的 EBITDA 為 31.15 億美元。這比我們在 2021 年第三季度設定的 30.6 億美元中點高出 5500 萬美元。我們在增長前實現了近 24 億美元的調整後自由現金流，比我們在 2022 年第三季度設定的縮小指導中點高出 1.29 億美元。我們的零售和發電團隊的強勁表現凸顯了我們的財務成就。我們的旗艦零售品牌 TXU Energy 繼續表現良好，德州住宅客戶同比增長近 2%，同時保持其 PUCT 5 星評級。我們的 Generation 團隊已證明其能夠在夏季和冬季的極端天氣條件下執行任務，優化我們機隊的維護以隨時準備在需要時執行任務。

The team's commitment is illustrated by the 95.4% commercial availability achieved fleet-wide this past year. Safety remains our top priority and the culture of continuous improvement is exemplified in our Vistra best defense safety program. I'm pleased with our performance in 2022, but through continuous improvement, we see opportunities to perform operationally at an even higher level in 2023. We now look forward to delivering on the financial guidance we set forth last quarter for 2023.

該團隊的承諾體現在去年整個機隊實現的 95.4% 的商業可用性上。安全仍然是我們的首要任務，我們的瑞致達最佳防禦安全計劃體現了持續改進的文化。我對我們在 2022 年的表現感到滿意，但通過持續改進，我們看到了在 2023 年實現更高水平運營的機會。我們現在期待著實現我們上個季度為 2023 年制定的財務指導。

We are reaffirming our $3.4 billion to $4 billion adjusted EBITDA from ongoing operations range for 2023 as well as reaffirming our $1.75 billion to $2.35 billion adjusted free cash flow before growth guidance range. It is early in the year, but notably, despite the volatility in commodity prices we've experienced lately, we continue to have the line of sight to achieve the expectations we've set for ourselves given the potential value our comprehensive hedging program has locked in for 2023.

我們重申 2023 年持續運營範圍內的調整後 EBITDA 為 34 億美元至 40 億美元，並重申增長指導範圍前的調整後自由現金流為 17.5 億美元至 23.5 億美元。現在是今年年初，但值得注意的是，儘管我們最近經歷了大宗商品價格的波動，但考慮到我們綜合對沖計劃鎖定的潛在價值，我們仍然希望實現我們為自己設定的預期在 2023 年。

I will now hand the call over to Kris to discuss the 2022 fourth quarter and annual performance in more detail.

我現在將電話轉給 Kris，更詳細地討論 2022 年第四季度和年度業績。

Thank you, Jim. Starting on Slide 8, Vistra delivered solid fourth quarter results in 2022 with ongoing operations adjusted EBITDA of approximately $771 million, including $359 million from Retail and $412 million from Generation. For the year, Vistra delivered $3.115 billion of adjusted EBITDA from ongoing operations, including $923 million for retail and $2.192 billion from Generation. Retail's results exceeded the midpoint of its component of our 2022 adjusted EBITDA from ongoing operations guidance of $700 million by $223 million. Our favorable results were primarily driven by strong residential margins, claim management and customer counts in ERCOT, offset partially by PJM and New York, New England counts and margins.

謝謝你，吉姆。從幻燈片 8 開始，瑞致達在 2022 年第四季度取得了穩健的業績，持續運營調整後的 EBITDA 約為 7.71 億美元，其中包括零售業務的 3.59 億美元和發電業務的 4.12 億美元。這一年，瑞致達從持續運營中交付了 31.15 億美元的調整後 EBITDA，其中零售業務為 9.23 億美元，Generation 業務為 21.92 億美元。零售業的業績比我們 2022 年調整後 EBITDA 的組成部分的中點 7 億美元高出 2.23 億美元。我們的有利業績主要是由 ERCOT 強勁的住宅利潤率、索賠管理和客戶數量推動的，部分被 PJM 和紐約、新英格蘭的數量和利潤率所抵消。

Moving now to Generation. Its adjusted EBITDA from ongoing operations results came in under the midpoint of the Generation component of guidance by $168 million, primarily driven by low first quarter prices in ERCOT, coal constraints and higher default service costs, partially offset by higher realized prices and strong commercial availability.

現在轉到 Generation。其根據持續運營結果調整後的 EBITDA 低於發電部分指導的中點 1.68 億美元，這主要是由於 ERCOT 第一季度價格較低、煤炭限制和更高的違約服務成本，部分被更高的實現價格和強大的商業可用性所抵消.

Turning now to Slide 9. We are providing an update on the progress we've made on our capital allocation plan. As of February 23, we had executed approximately $2.45 billion of share repurchases since beginning the program in the fourth quarter of 2021. This includes an incremental $200 million since the end of 2022. We expect to utilize the remaining approximately $800 million of authorization by year-end 2023. Notably, as of February 23, our outstanding share count had fallen to approximately 381 million shares outstanding, which represents an approximately 21% reduction from the aggregate number of shares that were outstanding just under 16 months ago. Additionally, in 2022, we delivered on our goal to pay $300 million in dividends to our common stockholders each year, and we continue to execute against that goal as we head into 2023. To that end, we recently declared the quarterly dividend to be paid on Vistra's common stock in the amount of $0.1975 per share or approximately $75 million in the aggregate, payable on March 31, 2023.

現在轉到幻燈片 9。我們正在提供我們在資本配置計劃方面取得的進展的最新情況。自 2021 年第四季度啟動該計劃以來，截至 2 月 23 日，我們已經執行了約 24.5 億美元的股票回購。這包括自 2022 年底以來增加的 2 億美元。我們預計每年將使用剩餘的約 8 億美元的授權- 2023 年底。值得注意的是，截至 2 月 23 日，我們的流通股數量已降至約 3.81 億股流通股，這比不到 16 個月前的流通股總數減少了約 21%。此外，在 2022 年，我們實現了每年向普通股股東支付 3 億美元股息的目標，並且在進入 2023 年時，我們將繼續實現這一目標。為此，我們最近宣布將支付季度股息以每股 0.1975 美元或總計約 7500 萬美元的價格購買 Vistra 的普通股，於 2023 年 3 月 31 日支付。

This is an approximately 16% growth in dividend per share as compared to the dividend paid in the first quarter of 2022. While returning cash directly to our shareholders remains a priority, we also continue to focus on maintaining a strong balance sheet. Importantly, we continue to target a long-term net leverage ratio, excluding any nonrecourse debt at Vistra Zero of less than 3x. While we did in the year with a higher debt balance than we planned, that higher balance corresponds to the higher levels of adjusted EBITDA opportunities we now have in years 2023 through 2025 as a result of our comprehensive hedging strategy, the execution of which required additional liquidity. Even with the higher debt balance, we achieved a sub-3x leverage on an after margin deposit basis at year-end.

與 2022 年第一季度支付的股息相比，每股股息增長了約 16%。雖然直接向股東返還現金仍然是我們的首要任務，但我們也將繼續專注於維持穩健的資產負債表。重要的是，我們繼續以長期淨槓桿比率為目標，不包括 Vistra Zero 低於 3 倍的任何無追索權債務。雖然我們在這一年的債務餘額高於我們的計劃，但由於我們全面的對沖策略，更高的餘額對應於我們現在在 2023 年至 2025 年擁有的更高水平的調整後 EBITDA 機會，執行該策略需要額外的流動性。即使債務餘額較高，我們在年末保證金存款後的基礎上實現了低於 3 倍的槓桿率。

As we have reported in prior quarters, we continue to pursue Vistra Zero growth, and once again, we emphasize that we anticipate financing that growth by using primarily third-party capital along with the remaining proceeds from the issuance of the $1 billion of green preferred stock and ongoing Vistra Zero free cash flow.

正如我們在前幾個季度報告的那樣，我們繼續追求瑞致達零增長，我們再次強調，我們預計主要通過第三方資本以及發行 10 億美元綠色優先股的剩餘收益為增長提供資金股票和持續的瑞致達零自由現金流。

Turning to Slide 10. As Jim mentioned earlier, we are reaffirming our guidance for ongoing operations adjusted EBITDA with a $3.7 billion midpoint for 2023. As you can see on Slide 10, we are providing an update on the forward power and gas price curves as of February 23. While there has been noticeable volatility over the past year, prices are still holding in the range of the April 29, 2022 curves, which were the basis for the estimate of $3.5 billion to $3.7 billion of potential ongoing operations adjusted EBITDA midpoint range for each of years '24 and '25. Importantly, as of the end of 2022, we were approximately 73% hedged on average across all markets for 2023 through 2025, with 2023 approximately 90% hedged and 2024, approximately 76% hedged. As Jim stated, we are pleased with our 2022 accomplishments, but we are focused on continuous improvement as we deliver on our 2023 priorities.

轉到幻燈片 10。正如 Jim 之前提到的，我們重申我們對 2023 年持續運營調整後 EBITDA 的指導，中點為 37 億美元。正如您在幻燈片 10 中看到的那樣，我們提供了遠期電力和天然氣價格曲線的更新，如下所示2 月 23 日。雖然過去一年出現了明顯的波動，但價格仍保持在 2022 年 4 月 29 日曲線的範圍內，這是估計 35 億美元至 37 億美元的潛在持續運營調整後 EBITDA 中點的基礎'24 和 '25 年的範圍。重要的是，截至 2022 年底，我們在 2023 年至 2025 年的所有市場中平均對沖了約 73%，其中 2023 年約 90% 對沖，2024 年約 76% 對沖。正如吉姆所說，我們對 2022 年取得的成就感到滿意，但我們在實現 2023 年的優先事項時專注於持續改進。

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

有了這個，接線員，我們就可以打開問題熱線了。

(Operator Instructions) Our first question will come from Shar Pourreza with Guggenheim Partners.

（操作員說明）我們的第一個問題將來自 Guggenheim Partners 的 Shar Pourreza。

Realize it still kind of ways off, but I guess given the volatility we've seen in the backdrop, I think it'd be kind of helpful for The Street, how should we sort of think about the EBITDA in '26 and beyond? The curves would imply a bit of a step down, obviously, not as liquid that far out from a hedging perspective. And I guess, any general sense you can give there like you've been doing for '25?

意識到它還有很長的路要走，但我想考慮到我們在背景中看到的波動，我認為這對華爾街有點幫助，我們應該如何考慮 26 年及以後的 EBITDA？從對沖的角度來看，這些曲線顯然意味著一點點下降，而不是流動性那麼大。而且我想，您可以像在 25 年所做的那樣給出任何一般意義嗎？

Shar, this is Jim. We knew when we put out 3-year kind of views, we get asked about before and it's not surprising. What's interesting about the curves is that '26 is actually hanging in there relative to '25. You see gas, obviously, still has a little bit of contango in it. We're seeing the heat rates hold up. We're certainly way more open in '26, and the liquidity there is not obviously the same as the near term. But right now, it's just that we're really open in '26, Shar, but actually, the '26 on just sort of a view as to where the curves are today. If we could actually lock that in, we feel pretty good about where we would guide for '26.

莎爾，這是吉姆。我們知道當我們提出 3 年的觀點時，我們之前會被問到，這並不奇怪。這些曲線的有趣之處在於，相對於 25 年，26 年實際上懸在那裡。你看天然氣，顯然，裡面還有一點正價差。我們看到熱率保持不變。我們在 26 年肯定更加開放，那裡的流動性顯然與近期不同。但現在，我們只是在 26 年真正開放，Shar，但實際上，26 年只是對今天曲線位置的一種看法。如果我們真的能鎖定它，我們對 26 年的指導方向感覺很好。

It's just that's a long ways off, and it's not as liquid as we'd like it to be to be able to act on it. I'm not even sure from a point of view that we would act on it fully, if we could. I think we think that some things might be a little bit overdone on at least as we see the view now with the mild winter and that putting that kind of downward pressure we've seen on the complex overall. But it's a good question. It's one we talk about every day, as we look at how we commercially optimize the business, but '26 is hanging in there.

只是那還有很長的路要走，而且它不像我們希望的那樣能夠對其採取行動。如果可以的話，從某種角度來看，我什至不確定我們是否會完全採取行動。我認為我們認為有些事情可能有點過頭了，至少我們現在看到的是溫和的冬天，這給整個建築群帶來了我們所看到的那種下行壓力。但這是個好問題。這是我們每天都在談論的話題，因為我們正在研究如何在商業上優化業務，但 26 年仍然存在。

Perfect. And then, Jim, a lot of different data points flying around this winter on the PCM and ERCOT. I realize it's not yet a completely done deal, but I guess how should we sort of think about potential uplift to your assets, if it's passed? You guys should have done the math, and obviously, is there still a door open to do something else down there?

完美的。然後，吉姆，今年冬天在 PCM 和 ERCOT 上有很多不同的數據點。我意識到這還不是一個完全完成的交易，但我想如果它通過了，我們應該如何考慮對你資產的潛在提升？你們應該算一算，很明顯，那裡還有門可以做其他事情嗎？

The PCM, as you know, is the leading concept at the moment as a proposal passed by the Public Utility Commission 50 in January. A lot of alternatives still being discussed there. The one thing to note about the PCM is, it was passed, I would say, more with the conceptual framework. The details are still to be worked out, things like what is the reliability standard that the state is actually going to procure resources to ensure reliability. What is the net CONE, what's the slope of the demand curve. There's just a lot of things to work out. And so this idea of trying to calculate its value, I think there's really a couple of concepts we would want to make sure when we get through the stakeholder process.

如您所知，PCM 是目前的主導概念，作為公用事業委員會 50 在 1 月份通過的提案。那裡仍在討論許多替代方案。關於 PCM 需要注意的一件事是，我想說，它通過了更多的概念框架。具體細節還有待研究，比如國家實際上要採購資源以確保可靠性的可靠性標準是什麼。淨 CONE 是多少，需求曲線的斜率是多少。有很多事情需要解決。因此，這個嘗試計算其價值的想法，我認為當我們通過利益相關者流程時，我們確實需要確定幾個概念。

One is, is it material enough to attract investment? And that's one of the ideas that is the concept behind doing anything with market reform. And is it enough to retain the Generation that's currently there? So to the extent that we end up with a PCM that just does not have a lot of value in it, it could be a concept and it could be implemented, but it may not do much attracting of investment or retaining of assets. And I think you'll hear the debate down there that's happening in Austin, there are many stakeholders that do not believe that we have to do significant market reform. We're concerned about market reform from the standpoint that the state of Texas from a reliability standpoint will need to actually incentivize new generation while retaining the existing because we are such a strong economy, and we're seeing the load growth here in markets unlike anywhere else in the country.

一是，它的物質性是否足以吸引投資？這就是市場改革背後的理念之一。是否足以保留當前存在的一代？因此，就我們最終得到的 PCM 而言，它並沒有太多價值，它可能是一個概念並且可以實施，但它可能不會吸引投資或保留資產。我想你會聽到奧斯汀正在發生的辯論，有許多利益相關者不相信我們必須進行重大的市場改革。從可靠性的角度來看，我們對市場改革感到擔憂，因為我們的經濟如此強勁，德克薩斯州需要在保留現有發電量的同時實際激勵新一代發電，而且我們看到這裡的市場負荷增長不同於該國其他任何地方。

So I think, Shar, it's too early to say what the PCM is going to provide. Obviously, we believe in a dispatchable resource emphasis around PCM. We think that's core to grid reliability, but there's too many things to still work out in the stakeholder process, if this is the leading concept coming out of the legislative session.

所以我認為，Shar，現在說 PCM 將提供什麼還為時過早。顯然，我們相信圍繞 PCM 的可調度資源重點。我們認為這是電網可靠性的核心，但如果這是立法會議提出的主要概念，利益相關者流程中仍有太多事情需要解決。

Perfect. And then, Jim, one last one for me, I promise. Just on the inorganic side, I mean we've seen nuclear assets in the East come to market in recent months. One of your peers obviously has been very vocal that they couldn't bridge the bid ask there. Is this something you've considered or would you consider in the future? Any thoughts there would be appreciated.

完美的。然後，吉姆，最後一個給我，我保證。就無機方面而言，我的意思是我們已經看到東方的核資產最近幾個月上市。您的一位同行顯然一直非常直言不諱，他們無法在那裡彌合出價要價。這是您考慮過的還是將來會考慮的？如果有任何想法，我們將不勝感激。

Yes, sure, sure. We're obviously not going to comment on any specific aspect of M&A, but you've seen this in the past. If they can leverage our core capabilities, it'd be a consideration. We've done it with Dynegy, Crius, Ambit. I view it as -- I think we're good at 3 things. I think we're very good at operating plants, serving customers and commercially integrating these 2 activities, which as you know, operate in a followable commodity market. So I think we would look at things, and we have been around processes and that's part of just our core strategy of looking how -- looking at ways that we can maximize value for shareholders, but I wouldn't put a caveat.

是的，當然，當然。我們顯然不會對併購的任何具體方面發表評論，但你過去已經看到了這一點。如果他們可以利用我們的核心能力，那將是一個考慮因素。我們已經通過 Dynegy、Crius、Ambit 做到了。我認為——我認為我們擅長三件事。我認為我們非常擅長運營工廠、服務客戶和將這兩項活動進行商業整合，如您所知，這些活動在可追踪的商品市場中運作。所以我認為我們會審視事物，我們一直在關注流程，這只是我們核心戰略的一部分——尋找我們可以為股東實現價值最大化的方式，但我不會提出警告。

Our investors have been very clear that they do like our return of capital strategy. We try to be very consistent with that approach, as Kris laid out, and I think that still remains our priority. So anything that we're going to consider in that front, I believe, needs to fit within that framework that may or may not be possible, but we have a priority around returning capital to shareholders. And if we can do that and leverage our core capabilities, we'd be interested.

我們的投資者非常清楚，他們確實喜歡我們的資本回報策略。正如 Kris 所說，我們試圖與這種方法保持一致，我認為這仍然是我們的首要任務。因此，我認為，我們在這方面要考慮的任何事情都需要符合可能或不可能的框架，但我們優先考慮向股東返還資本。如果我們能做到這一點並利用我們的核心能力，我們就會感興趣。

Terrific, guys. Congrats on the execution and much appreciated.

太棒了，伙計們。祝賀執行並非常感謝。

Our next question will come from David Arcaro with Morgan Stanley.

我們的下一個問題將來自摩根士丹利的 David Arcaro。

I was wondering -- let's see. Could you speak just a little bit more to the Winter Storm Elliott events. Curious if you could just elaborate a bit on how your Generation facilities operated, if there were any penalties that you might have experienced? And then also on the Retail side of things, how did you manage the unexpectedly strong load and get through that weather event?

我在想——讓我們看看。你能再談談冬季風暴埃利奧特事件嗎？想知道您是否可以詳細說明一下您的發電設施是如何運作的，是否有任何您可能經歷過的處罰？然後在零售方面，您是如何管理意外的強大負載並度過那場天氣事件的？

Sure. It's a good question. So obviously, we ended the year with a really strong weather system that affected not just one market, but multiple markets. When we go into these events and some of this has been refined since Uri, we carry more length into these events because we've seen that particularly, in winter events, you can actually have some fuel disruptions, not just asset performance challenges. So we try to take that into consideration. So we hold back length on the Generation side, and then we expect that retail load, particularly in extremely cold weather, can swing even more than what we would normally have expected on a winter day. And we expect those 2 to offset each other, and in Winter Storm Elliot, that's what happened. So we were able to run our ERCOT fleet, and our fleet performed really well -- and in PJM. And that extra length from an energy perspective covered the extra swing that we experienced on the retail side.

當然。這是個好問題。很明顯，我們以一個非常強大的天氣系統結束了這一年，它不僅影響了一個市場，而且影響了多個市場。當我們進入這些事件時，其中一些自 Uri 以來已經得到改進，我們對這些事件進行了更長時間的研究，因為我們已經看到，特別是在冬季事件中，您實際上可能會遇到一些燃料中斷，而不僅僅是資產性能挑戰。所以我們嘗試考慮到這一點。因此，我們在發電方面保留了長度，然後我們預計零售負荷，尤其是在極冷的天氣下，可能會比我們通常在冬日預期的波動更大。我們希望這兩個相互抵消，而在冬季風暴埃利奧特中，這就是發生的事情。所以我們能夠運行我們的 ERCOT 機隊，我們的機隊表現非常好——而且在 PJM 中。從能源的角度來看，這段額外的時間涵蓋了我們在零售方面經歷的額外波動。

On the penalty specifically, because PJM has yet another aspect to it with the penalties, you could be in a bonus or a penalty situation. And our view at this point, although we do not have full information yet from PJM, is that we're in a net bonus situation, not by a lot, but we are in a net bonus situation. But we haircut a bonus expectations because of some of the default risk that others are concerned about, and this actual process could take 8 or 9 months to receive payments for people that are in a penalty, and they need to pay in order for us to receive a bonus.

特別是關於罰球，因為 PJM 在罰球方面還有另一個方面，您可能處於獎金或罰球的情況。在這一點上，我們的觀點是，雖然我們還沒有從 PJM 獲得全部信息，但我們處於淨紅利狀態，不是很多，但我們處於淨紅利狀態。但由於其他人擔心的一些違約風險，我們削減了獎金預期，而這個實際過程可能需要 8 或 9 個月才能收到罰款的人的付款，他們需要付款才能讓我們獲得獎金。

So we've assumed for this purpose that we basically have a breakeven penalty bonus situation in PJM with that haircut on the bonuses. And so we came out of the storm where we expected to be. What we like about our business is, we can handle these events. What you tend to see in the aftermath of these events is some more volatility potentially in the forward curve. And then we try to hedge into that, and that's how we're able to provide the guidance that we provide. But we don't go into any one event looking for it to be a significantly positive or negative event because we're on both sides, the Gen and the Retail. And we try to come out of that event, and we had a good performance at Elliot.

因此，我們為此目的假設我們基本上在 PJM 中有一個盈虧平衡的罰金情況，並且獎金會有所削減。因此，我們走出了預期的風暴。我們喜歡我們的業務是，我們可以處理這些事件。在這些事件之後，您往往會看到遠期曲線可能出現更多波動。然後我們嘗試對沖，這就是我們能夠提供我們提供的指導的方式。但我們不會研究任何一個事件來尋找它是一個顯著積極或消極的事件，因為我們在兩邊，Gen 和 Retail。我們試圖從那場比賽中脫穎而出，我們在埃利奧特的表現很好。

Got it. That's great to hear. Obviously, a very tough event for a lot of generators. And then I was curious if you could just give an update on the margin deposits so far this year. Is there a level that you could give us as to what that currently stands at? I think you mentioned that it was kind of coming back in slower than expected. So curious if that's starting to improve.

知道了。聽到這個消息我很高興。顯然，對於很多發電機來說，這是一個非常艱難的事件。然後我很好奇你是否可以提供今年到目前為止保證金存款的最新情況。關於目前的水平，你能告訴我們一個水平嗎？我想你提到過它的恢復速度比預期的要慢。很好奇這是否開始有所改善。

Yes. This is Kris. So as of the end of the fourth quarter we talked about, we had expected to start seeing margin deposits come back as we settled our -- settled some of those hedges in the fourth quarter. With the volatility that continued on in the fourth quarter, especially in December, we actually saw margin deposits go up from September 30 through the end of the year. Over the past 1.5 months, prices and volatility have settled a little bit, and we are seeing some return of cash, and so -- and we've also settled some additional hedges. So we are seeing cash come back in, and we do expect more cash to come in, in the near term and over the course of the year. And over the course of the year, we would expect a significant portion of the -- over $3 billion of cash that we had posted to come back.

是的。這是克里斯。因此，從我們談到的第四季度末開始，我們預計在第四季度結算我們的一些對沖時，我們會開始看到保證金存款回來。隨著第四季度持續的波動，尤其是在 12 月，我們實際上看到保證金存款從 9 月 30 日到年底有所增加。在過去的 1.5 個月裡，價格和波動性有所穩定，我們看到了一些現金回報，因此——我們還解決了一些額外的對沖。因此，我們看到現金回流，我們確實預計在短期內和一年中會有更多現金流入。在這一年中，我們預計我們已經發布的超過 30 億美元的現金中有很大一部分會回來。

Our next question will come from Durgesh Chopra with Evercore ISI.

我們的下一個問題將來自 Evercore ISI 的 Durgesh Chopra。

Jim, can we get your updated thoughts on capital allocation, share buybacks, et cetera, et cetera. On the Q2 call last year, you announced $1.25 billion in additional share buybacks that you're going to complete this year. But just can we get your latest thoughts there? And when should we -- from a timing perspective, when should us and investors be looking for an update in terms of your forward-looking share buyback plans?

吉姆，我們能否了解您對資本配置、股票回購等方面的最新想法。在去年第二季度的電話會議上，您宣布將在今年完成 12.5 億美元的額外股票回購。但是我們可以在那裡了解您的最新想法嗎？我們應該什麼時候 - 從時間的角度來看，我們和投資者什麼時候應該在你的前瞻性股票回購計劃方面尋找更新？

Durgesh, this is Kris. I appreciate the question. So when we did upsize the program in the middle of the year last year and that was in part as we were seeing increased opportunity for 2023 that we went ahead and added that increase into the middle of last year. So we added a $250 million. As we disclosed this morning, we ended up completing the first $2.25 billion approximately of the program by the end of the year. And as you know, we have a 3.25 upsize program that we said that would be by the end of this year. So that left $1 billion for 2023. And we had said that we thought share buybacks would be at least $1 billion starting in 2023 through 2026. We have also disclosed today that we have already, through February 23, executed another approximately $200 million. So that would leave approximately $800 million for the final 10 months of the year, which is consistent with going into the year, how we thought about it.

Durgesh，這是 Kris。我很欣賞這個問題。因此，當我們在去年年中確實擴大了該計劃時，部分原因是我們看到 2023 年的機會增加了，所以我們繼續將增加的機會增加到去年年中。所以我們增加了 2.5 億美元。正如我們今天上午披露的那樣，我們最終在年底前完成了該計劃的首批 22.5 億美元。如您所知，我們有一個 3.25 的升級計劃，我們說這將在今年年底完成。因此，2023 年還剩下 10 億美元。我們曾說過，我們認為從 2023 年到 2026 年的股票回購至少為 10 億美元。我們今天還透露，到 2 月 23 日，我們已經執行了另外大約 2 億美元。因此，這將為今年的最後 10 個月留下大約 8 億美元，這與我們進入這一年的想法是一致的。

We will -- as with same as last year, any changes to capital allocation, including share buybacks, we wouldn't likely consider those and talk to our Board about those until after we get through the important winter and summer months. So I'm not predicting any changes or updates as we had last year, but if there were to be any, that would probably come after we've gotten through a couple of the summer months.

我們將——與去年一樣，資本配置的任何變化，包括股票回購，在我們度過重要的冬季和夏季月份之前，我們不太可能考慮這些並與我們的董事會討論這些。所以我並沒有像去年那樣預測任何變化或更新，但如果有任何變化或更新，那可能會在我們度過幾個夏季之後出現。

Got it. So back half of the year. And then my next question is on the nuclear fuel. I see sort of you kind of reiterated your nuclear fuel expense projections for 2023. Some of your peers are showing a pretty sizable ramp-up in nuclear fuel costs looking out in the future. Can you comment on that, please?

知道了。所以回到半年。然後我的下一個問題是關於核燃料。我看到你們在某種程度上重申了你們對 2023 年的核燃料支出預測。你們的一些同行表明，展望未來，核燃料成本將大幅上升。你能對此發表評論嗎？

Sure. Yes, it's a good question. It's one that we're staying close to. We forward buy nuclear fuel, as you would expect. We buy the various components that allow us to have the fuel assemblies for our reloads. On a historical basis, we've seen it be somewhere around $5 a megawatt hour a fairly good estimate, if you were to take all of the capital costs and kind of spread them out over the megawatt hours of production. The team has been forward buying, and that's why you saw a bigger CapEx number in '22. We have a bigger CapEx number in '23. Our best view of this is, as you spread that out over the time period in the 2025, 2026, that fuel cost is working its way up from $5 to just sub $6. So if you put that on a on Comanche Peak size unit, $1 is about a $20 million per year impact. So it's not jumping to $6, just kind of migrating from a $5 cost on average historically to hedge.

當然。是的，這是個好問題。這是一個我們保持接近。正如您所期望的，我們提前購買核燃料。我們購買了各種組件，使我們能夠擁有用於重新裝填的燃料組件。從歷史的角度來看，如果你把所有的資本成本分攤到兆瓦時的生產中，我們已經看到每兆瓦時 5 美元左右是一個相當不錯的估計。團隊一直在提前購買，這就是為什麼你在 22 年看到了更大的資本支出數字。我們在 23 年的資本支出數字更大。我們對此的最佳看法是，當您將其分攤到 2025 年、2026 年的時間段時，燃料成本正在從 5 美元上升到略低於 6 美元。因此，如果您將其放在科曼奇峰大小的單位上，1 美元每年的影響約為 2000 萬美元。所以它並沒有跳到 6 美元，只是從歷史上平均 5 美元的成本轉移到對沖。

It's looking like it's going to be sub-$6, but heading towards $6 around that 2026 time frame. And so that gives you a sense that it is definitely on the upward trend, where there'll be some domestic opportunities for supply down the road. That remains to be seen, but I think the team has done a very nice job of getting ahead of the nuclear fuel cost escalation and sourcing, and that gives you a kind of a range of magnitude as to how we're managing through it.

看起來它會低於 6 美元，但在 2026 年的時間框架內會朝著 6 美元的方向發展。因此，這讓您感覺它肯定處於上升趨勢，未來會有一些國內供應機會。這還有待觀察，但我認為該團隊在核燃料成本上漲和採購方面做得非常好，這讓你對我們如何管理它有了一定程度的了解。

Next question will come from Angie Storozynski with Seaport.

下一個問題將來自 Seaport 的 Angie Storozynski。

So maybe a little bit more about Vistra Zero. So thank you for the additional slides. I'm just wondering, I mean it doesn't seem like the market is giving you any credit for that business. So if you could comment both on how you could extract some value from this business? And two, what's the long-term view on the profitability of this business? Or maybe as a percentage of total EBITDA, what do you think is going to come from that business? Again, any way to extract value.

因此，也許更多關於 Vistra Zero 的信息。感謝您提供額外的幻燈片。我只是想知道，我的意思是市場似乎並沒有給你任何關於該業務的信用。那麼，您是否可以就如何從這項業務中提取一些價值發表評論？第二，對這項業務的盈利能力的長期看法是什麼？或者可能佔總 EBITDA 的百分比，您認為該業務將產生什麼？同樣，任何提取價值的方法。

Sure. Angie, thank you. That's a very good question. Vistra Zero has been off to, in our view, a really strong start on the projects that we've got line of sight to. Right now, we did deliver the 3 that were in Texas in 2022, actually on time, on budget. Our focus right now is Moss 350, which will come online for this summer, which adds to the already large battery assembly of 400 megawatts, will become 750. And then we have 9 Coal to Solar projects in Illinois that were focused on the balance of this year and in 2024 to bring those on in late '24 and '25.

當然。安吉，謝謝你。這是一個很好的問題。在我們看來，Vistra Zero 在我們已經看到的項目上已經有了一個非常好的開端。現在，我們確實按時、按預算交付了 2022 年在德克薩斯州的 3 架飛機。我們現在的重點是 Moss 350，它將在今年夏天上線，這將增加已經 400 兆瓦的大型電池組件，將變成 750。然後我們在伊利諾伊州有 9 個煤改太陽能項目，重點是平衡今年和 2024 年將在 24 世紀末和 25 世紀末推出。

What we've done, and you put all that together, Angie, you're still looking at about a $200 million to $250 million kind of EBITDA business. So on the basis of the 3.7, it's still not a sizable share, but it's a meaningful share. And what we've done in Texas, as you know, is we slowed down some of the merchant solar development because we've seen those returns be challenged based on not only EPC cost and panel costs, but solar is already starting to cannibalize solar in terms of price realization. So we would want to do additional solar under the right circumstances, which would likely be if it were contracted. So we slowed our process down at this point because we want to make sure that those projects make sense for us.

我們所做的，你把所有這些放在一起，安吉，你仍然在尋找大約 2 億到 2.5 億美元的 EBITDA 業務。所以在 3.7 的基礎上，它仍然不是一個很大的份額，但它是一個有意義的份額。正如你所知，我們在德克薩斯州所做的是，我們放慢了一些商業太陽能的發展，因為我們已經看到這些回報不僅受到 EPC 成本和麵板成本的挑戰，而且太陽能已經開始蠶食太陽能在價格實現方面。因此，我們希望在合適的情況下增加太陽能，如果合同簽訂的話，這很可能是這樣。所以我們在這一點上放慢了我們的進程，因為我們想確保這些項目對我們有意義。

As we stated since we announced Vistra Zero, we hold these options ourselves. They're not on a time constraint that if we don't exercise them, we lose them. And some of these sites, I think, can end up being more valuable through time as we see these interconnect queues are really hard to get through all over the country, and we own dozens and dozens of interconnect queues that we're not utilizing right now that we'd like to. So it is absolutely an option for us.

正如我們自宣布 Vistra Zero 以來所說的那樣，我們自己擁有這些選擇權。他們沒有時間限制，如果我們不鍛煉他們，我們就會失去他們。我認為，其中一些站點最終會隨著時間的推移變得更有價值，因為我們看到這些互連隊列真的很難在全國范圍內通過，而且我們擁有數十個我們沒有正確利用的互連隊列既然我們願意。所以這絕對是我們的一個選擇。

I think you'll see that we will continue to grow this in a very deliberate way. But I think we've also tried to show discipline that we did not give you a headline megawatt number and just go pursue it regardless of returns. I think we've been very disciplined about the approach. And the market opportunity, clearly, with the Inflation Reduction Act is improving some of these returns even on the projects that we've already announced that are executing like Moss 350 and Coal to Solar. So I feel very good about our portfolio that we're executing on, but there is still uncertainty about the back half of the Vistra Zero portfolio and whether they can generate adequate returns. And if they do, we'll pursue it, and if they don't, then we're going to be disciplined and we'll wait because we still own the sites and have the options.

我想你會看到我們將繼續以一種非常慎重的方式發展它。但我認為我們還試圖表明紀律，即我們沒有給你一個標題兆瓦數，而是不顧回報地去追求它。我認為我們對這種方法非常有紀律。很明顯，市場機會與通貨膨脹減少法案正在改善其中一些回報，即使是在我們已經宣布正在執行的項目中，如 Moss 350 和煤炭到太陽能。因此，我對我們正在執行的投資組合感覺非常好，但瑞致達零投資組合的後半部分以及它們是否能產生足夠的回報仍存在不確定性。如果他們這樣做，我們會追究，如果他們不這樣做，那麼我們將受到紀律處分，我們會等待，因為我們仍然擁有這些網站並擁有選擇權。

Okay. And there were questions about Comanche Peak. I'm looking at the size of your generation in Texas and your retail book. I mean, how core of an asset is it to serve your Retail load? And again, just judging by your multiple and comparable comps for nuclear plans, it seems like it would be an easy way to generate value by selling the assets. I'm just wondering how core of an asset is it for your generation-retail strategy?

好的。還有關於科曼奇峰的問題。我正在查看德克薩斯州你們這一代人的規模和你們的零售書籍。我的意思是，服務於您的零售負載的資產有多核心？再一次，僅從您對核計劃的多個可比比較來看，這似乎是通過出售資產來產生價值的一種簡單方法。我只是想知道對於您的世代零售戰略而言，資產的核心是什麼？

Dispatchable assets are core to serving Retail load. In fact, I think we have seen, and this is what Steve Muscato and his commercial team focus on every day is, can you serve Retail loads successfully, simply with renewables and batteries. And it's a really tough -- it's a really tough effort to manage the risk around that. So dispatchable assets clearly are required to be successful with risk management on Retail. Comanche Peak itself, we talked about was the anchor tenant in Vistra Zero when we first announced Vistra Zero. Obviously, it's got additional support from the production tax credit. We just obviously put in for the relicensing of it, and it operates at one of the lowest cost structures, if not the lowest cost structure, in the industry. So we do occasionally get inbounds from people that ask that question, Angie, and we are obviously interested in long-term value creation, but we like the Comanche Peak asset.

可調度資產是服務零售負載的核心。事實上，我認為我們已經看到，這就是 Steve Muscato 和他的商業團隊每天關注的是，您能否僅使用可再生能源和電池成功地為零售負載提供服務。這真的很艱難——管理圍繞它的風險是一項非常艱難的努力。因此，顯然需要可調度資產才能成功進行零售風險管理。當我們首次宣布 Vistra Zero 時，我們談到的 Comanche Peak 本身就是 Vistra Zero 的主要租戶。顯然，它得到了生產稅收抵免的額外支持。顯然，我們只是為它的重新許可投入了資金，它以業內成本最低的結構之一運行，如果不是成本最低的結構的話。所以我們偶爾會收到問這個問題的人的意見，Angie，我們顯然對長期價值創造感興趣，但我們喜歡 Comanche Peak 資產。

It fits within our portfolio in Texas, given our sizable retail presence. And obviously, nuclear has been given a new level of interest given the Inflation Reduction Act, but we will always engage ideas. But in the core competencies of -- we run plants well, we serve customers well, and we commercially risk manage the 2, I think it's a core asset.

鑑於我們龐大的零售業務，它符合我們在德克薩斯州的投資組合。顯然，鑑於《降低通貨膨脹法案》，核能得到了新的關注，但我們將始終參與各種想法。但在核心競爭力方面——我們很好地經營工廠，我們很好地為客戶服務，我們在商業上風險管理 2，我認為這是一項核心資產。

This concludes our question-and-answer session. I would now like to turn the conference over to Jim Burke for any closing remarks.

我們的問答環節到此結束。我現在想將會議轉交給 Jim Burke 作閉幕詞。

I just want to thank everybody for joining. I want to thank the hard-working team at Vistra for a strong 2022, and we have turned our attention, and we're focused on delivering in 2023. So I hope everybody has a great morning. Look forward to talking to you again soon.

我只想感謝大家的加入。我要感謝 Vistra 辛勤工作的團隊，他們在 2022 年表現出色，我們已經轉移了注意力，我們專注於在 2023 年交付。所以我希望大家早上好。期待很快再次與您交談。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。