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| (a) | Our financial statements and financial statement schedules are incorporated under Part II, Item 8 of this Annual Report on Form 10-K. |
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| (b) | SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT |
VISTRA ENERGY CORP. (PARENT)
SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF LOSS
(Millions of Dollars)
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| Successor | | | | | | |
| Year Ended December 31, 2017 | | | | Period from October 3, 2016 through December 31, 2016 | | |
| Selling, general and administrative expense | $ | (47 | ) | | $ | (7 | ) |
| Loss from operations | (47 | | ) | | (7 | | ) |
| Interest income | 4 | | | | — | | |
| Impacts of Tax Receivable Agreement | 213 | | | | (22 | | ) |
| Income (loss) before income taxes and equity earnings | 170 | | | | (29 | | ) |
| Pretax equity in gains (losses) of consolidated subsidiaries | 80 | | | | (204 | | ) |
| Income tax (expense) benefit | (504 | | ) | | 70 | | |
| Net loss | $ | (254 | ) | | $ | (163 | ) |
See Notes to the Condensed Financial Statements.
VISTRA ENERGY CORP. (PARENT)
SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
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| Successor | | | | | | |
| Year Ended December 31, 2017 | | | | Period from October 3, 2016 through December 31, 2016 | | |
| Cash flows — operating activities: | | | | | | | |
| Net loss | $ | (254 | ) | | $ | (163 | ) |
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | | | | | | | |
| Pretax equity in (gains) losses of consolidated subsidiaries | (80 | | ) | | 204 | | |
| Deferred income tax benefit (expense), net | 418 | | | | (76 | | ) |
| Impacts of Tax Receivables Agreement | (213 | | ) | | 22 | | |
| Other, net | 23 | | | | 3 | | |
| Changes in operating assets and liabilities | (2 | | ) | | (26 | | ) |
| Cash used in operating activities | (108 | | ) | | (36 | | ) |
| Cash flows — financing activities: | | | | | | | |
| Special dividend (Note 4) | — | | | | (992 | | ) |
| Other, net | (1 | | ) | | 1 | | |
| Cash used in financing activities | (1 | | ) | | (991 | | ) |
| Cash flows — investing activities: | | | | | | | |
| Dividend received from subsidiaries | 1,505 | | | | 997 | | |
| Odessa Acquisition | (330 | | ) | | — | | |
| Changes in restricted cash | 32 | | | | 36 | | |
| Cash provided by financing activities | 1,207 | | | | 1,033 | | |
| Net change in cash and cash equivalents | 1,098 | | | | 6 | | |
| Cash and cash equivalents — beginning balance | 26 | | | | 20 | | |
| Cash and cash equivalents — ending balance | $ | 1,124 | | | $ | 26 | |
See Notes to the Condensed Financial Statements.
VISTRA ENERGY CORP. (PARENT)
SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS
(Millions of Dollars)
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| December 31 | | | | | | |
| 2017 | | | | 2016 | | |
| ASSETS | | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | $ | 1,124 | | | $ | 26 | |
| Restricted cash | 59 | | | | 90 | | |
| Other current assets | 5 | | | | 3 | | |
| Total current assets | 1,188 | | | | 119 | | |
| Equity investments in consolidated subsidiaries | 4,927 | | | | 6,067 | | |
| Accumulated deferred income taxes | 710 | | | | 1,122 | | |
| Other noncurrent assets | 6 | | | | 7 | | |
| Total assets | $ | 6,831 | | | $ | 7,315 | |
| LIABILITIES AND EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Trade accounts payable | $ | 11 | | | $ | — | |
| Accrued taxes | 59 | | | | 31 | | |
| Other current liabilities | 86 | | | | 91 | | |
| Total current liabilities | 156 | | | | 122 | | |
| Tax Receivable Agreement obligation | 333 | | | | 596 | | |
| Total liabilities | 489 | | | | 718 | | |
| Total shareholders' equity | 6,342 | | | | 6,597 | | |
| Total liabilities and equity | $ | 6,831 | | | $ | 7,315 | |
See Notes to the Condensed Financial Statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
The accompanying unconsolidated condensed balance sheets, statements of net loss and cash flows present results of operations and cash flows of Vistra Energy Corp. (Parent). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules of the SEC. Because the unconsolidated condensed financial statements do not include all of the information and footnotes required by U.S. GAAP, they should be read in conjunction with the financial statements and related notes of Vistra Energy Corp. and Subsidiaries included in the 2017 Annual Report on Form 10-K. Vistra Energy Corp.'s subsidiaries have been accounted for under the equity method. All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated.
Vistra Energy Corp. (Parent) will file a consolidated U.S. federal income tax return. All consolidated tax expenses/benefits and deferred tax assets/liabilities are recorded at Vistra Energy Corp. (Parent).
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| 2. | RESTRICTIONS ON SUBSIDIARIES |
The agreement governing the Vistra Operations Credit Facilities (the Credit Facilities Agreement) generally restricts the ability of Vistra Operations Company LLC (Vistra Operations) to make distributions to any direct or indirect parent unless such distributions are expressly permitted thereunder. As of December 31, 2017, Vistra Operations can distribute approximately $1.0 billion to Vistra Energy Corp. (Parent) under the Credit Facilities Agreement without the consent of any party. The amount that can be distributed by Vistra Operations to Parent was partially reduced by distributions made by Vistra Operations to Parent during the year ended December 31, 2017 of approximately $1.1 billion. Additionally, Vistra Operations may make distributions to Vistra Energy Corp. (Parent) in amounts sufficient for Vistra Energy Corp. (Parent) to make any payments required under the Tax Receivables Agreement or the Tax Matters Agreement or, to the extent arising out of Vistra Energy Corp.'s (Parent) ownership or operation of Vistra Operations, to pay any taxes or general operating or corporate overhead expenses. As of December 31, 2017, the maximum amount of restricted net assets of Vistra Operations that may not be distributed to Parent totaled $3.9 billion.
As of December 31, 2017, there are no material outstanding guarantees at Vistra Energy Corp. (Parent).
Under applicable law, Vistra Energy Corp. (Parent) is prohibited from paying any dividend to the extent that immediately following payment of such dividend there would be no statutory surplus or Vistra Energy Corp. (Parent) would be insolvent. On December 30, 2016, Vistra Energy Corp. (Parent) paid a special cash dividend in the aggregate amount of approximately $992 million to holders of record of its common stock on December 19, 2016.
Vistra Energy Corp. (Parent) received $1.505 billion and $997 million in dividends from its consolidated subsidiaries in the Successor period for the year ended December 31, 2017 and the period from October 3, 2016 through December 31, 2016, respectively.
Vistra Energy Corp. Exhibits to Form 10-K for the Fiscal Year Ended December 31, 2017
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| Exhibits | | Previously Filed With File Number* | | As Exhibit | | | | |
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| (2) | | Plan of Acquisition, Reorganization, Arrangement, Liquidation, or Succession | | | | | | |
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| 2(a) | | 333-215288 Form S-1 (filed December 23, 2016) | | 2.1 | | — | | Order of the United States Bankruptcy Court for the District of Delaware Confirming the Third Amended Joint Plan of Reorganization |
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| 2(b) | | 001-38086 Form 8-K (filed October 31, 2017) | | 2.1 | | — | | Agreement and Plan of Merger, dated as of October 29, 2017, by and between Vistra Energy Corp. and Dynegy, Inc. |
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| (3(i)) | | Articles of Incorporation | | | | | | |
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| 3(a) | | 333-215288 Form S-1 (filed December 23, 2016) | | 3.1 | | | | Certification of Incorporation of TCEH Corp. (now known as Vistra Energy Corp.), dated October 3, 2016 |
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| 3(b) | | 333-215288 Form S-1 (filed December 23, 2016) | | 3.2 | | — | | Certificate of Amendment of Certificate of Incorporation of TCEH Corp. (now known as Vistra Energy Corp.), dated November 2, 2016 |
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| (3(ii)) | | By-laws | | | | | | |
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| 3(c) | | 333-215288 Form S-1 (filed December 23, 2016) | | 3.3 | | — | | Restated Bylaws of Vistra Energy Corp., dated November 4, 2016 |
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| (4) | | Instruments Defining the Rights of Security Holders, Including Indentures | | | | | | |
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| 4(a) | | 333-215288 Form S-1 (filed December 23, 2016) | | 4.1 | | — | | Registration Rights Agreement, by and among TCEH Corp. (now known as Vistra Energy Corp.) and the Holders party thereto, dated as of October 3, 2016 |
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| (10) | | Material Contracts | | | | | | |
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| | Management Contracts; Compensatory Plans, Contracts and Arrangements | | | | | | |
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| 10(a) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.6 | | — | | 2016 Omnibus Incentive Plan |
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| 10(b) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.7 | | — | | Form of Option Award Agreement (Management) for 2016 Omnibus Incentive Plan |
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| 10(c) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.8 | | — | | Form of Restricted Stock Unit Award Agreement (Management) for 2016 Omnibus Incentive Plan |
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| 10(d) | | ** | | | | — | | Form of Performance Stock Unit Award Agreement for 2016 Omnibus Incentive Plan |
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| 10(e) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.9 | | — | | Vistra Energy Corp. Executive Annual Incentive Plan |
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| 10(f) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.10 | | — | | Stockholder's Agreement, by and between TCEH Corp. (now known as Vistra Energy Corp.) and Apollo Management Holdings, L.P., dated as of October 3, 2016 |
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| Exhibits | | Previously Filed With File Number* | | As Exhibit | | | | |
| 10(g) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.11 | | — | | Stockholder's Agreement, by and between TCEH Corp. (now known as Vistra Energy Corp.) and Brookfield Asset Management Private Institutional Capital Adviser (Canada), dated as of October 3, 2016 |
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| 10(h) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.12 | | — | | Stockholder's Agreement, by and between TCEH Corp. (now known as Vistra Energy Corp.) and Oaktree Capital Management, L.P. and certain of its affiliated entities, dated as of October 3, 2016 |
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| 10(i) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.19 | | — | | Employment Agreement between Curtis A. Morgan and Vistra Energy Corp. |
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| 10(j) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.20 | | — | | Employment Agreement between James A. Burke and Vistra Energy Corp. |
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| 10(k) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.21 | | — | | Employment Agreement between William Holden and Vistra Energy Corp. |
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| 10(l) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.22 | | — | | Employment Agreement between Stephanie Zapata Moore and Vistra Energy Corp. |
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| 10(m) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.23 | | — | | Employment Agreement between Carrie Lee Kirby and Vistra Energy Corp. |
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| 10(n) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.24 | | — | | Employment Agreement between Sara Graziano and Vistra Energy Corp. |
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| 10(o) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.25 | | — | | General Release Agreement, dated as of January 31, 2017, by and between Michael Liebelson and Vistra Energy Corp. |
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| 10(p) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.26 | | — | | Form of indemnification agreement with directors |
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| 10(q) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.29 | | — | | Stock Purchase Agreement, dated as of October 25, 2016, by and between TCEH Corp. (now known as Vistra Energy Corp.) and Curtis A. Morgan |
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| | Credit Agreements and Related Agreements | | | | | | |
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| 10(r) | | 333-215288 Form S-1 (filed December 23, 2016) | | 10.1 | | — | | Credit Agreement, dated as of October 3, 2017 |
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| 10(s) | | 333-215288 Form S-1 (filed December 23, 2016) | | 10.2 | | — | | Amendment to Credit Agreement, dated December 14, 2016, by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| Exhibits | | Previously Filed With File Number* | | As Exhibit | | | | |
| 10(t) | | 333-215288 Amendment No. 1 to Form S-1 (filed February 14, 2017) | | 10.3 | | — | | Second Amendment to Credit Agreement, dated February 1, 2017, by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| 10(u) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.4 | | — | | Third Amendment to Credit Agreement, dated February 28, 2017, by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| 10(v) | | 001-38086 Form 8-K (filed August 17, 2017) | | 10.1 | | — | | Fourth Amendment to Credit Agreement, dated as of August 17, 2017 (effective August 17, 2017), by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| 10(w) | | 001-38086 Form 8-K (filed December 14, 2017) | | 10.1 | | — | | Fifth Amendment to Credit Agreement, dated as of December 14, 2017 (effective December 14, 2017), by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| 10(x) | | 001-38086 Form 8-K (filed February 22, 2018) | | 10.1 | | — | | Sixth Amendment to Credit Agreement, dated as of February 20, 2018 (effective February 20, 2018), by and among Deutsche Bank AG New York Branch, Vistra Operations Company LLC, Vistra Intermediate Company LLC and the other Credit Parties and Lenders party thereto. |
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| | Other Material Contracts | | | | | | |
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| 10(y) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.5 | | — | | Collateral Trust Agreement, by and among TEX Operations Company LLC (now known as Vistra Operations LLC), the Grantors from time to time thereto, Railroad Commission of Texas, as first-out representative, and Deutsche Bank AG, New York Branch, as senior credit agreement representative, dated as of October 3, 2016 |
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| 10(z) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.13 | | — | | Tax Receivable Agreement, by and between TEX Energy LLC (now known as Vistra Energy Corp.) and American Stock Transfer & Trust Company, as transfer agent, dated as of October 3, 2016 |
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| 10(aa) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.14 | | — | | Tax Matters Agreement, by and among TEX Energy LLC (now known as Vistra Energy Corp.), Energy Future Holdings Corp., Energy Future Intermediate Holding Company LLC, EFI Finance Inc. and EFH Merger Co. LLC, dated as of October 3, 2016 |
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| 10(bb) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.15 | | — | | Transition Services Agreement, by and between Energy Future Holdings Corp. and TEX Operations Company LLC (now known as Vistra Operations Company LLC), dated as of October 3, 2016 |
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| 10(cc) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.16 | | — | | Separation Agreement, by and between Energy Future Holdings Corp., TEX Energy LLC (now known as Vistra Energy Corp.) and TEX Operations Company LLC (now known as Vistra Operations LLC), dated as of October 3, 2016 |
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| 10(dd) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.17 | | — | | Purchase and Sale Agreement, dated as of November 25, 2015, by and between La Frontera Ventures, LLC and Luminant Holding Company LLC |
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| 10(ee) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.18 | | — | | Amended and Restated Split Participant Agreement, by and between Oncor Electric Delivery Company LLC (f/k/a TXU Electric Delivery Company) and TEX Operations Company LLC (now known as Vistra Operations Company LLC), dated as of October 3, 2016 |
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| Exhibits | | Previously Filed With File Number* | | As Exhibit | | | | |
| 10(ff) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.27 | | — | | Lease Agreement, dated February 14, 2002, between State Street Bank and Trust Company of Connecticut, National Association, an owner trustee of ZSF/Dallas Tower Trust, a Delaware grantor trust, as lessor and EFH Properties Company (now known as Vistra EP Properties Company), as Lessee (Energy Plaza Property) |
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| 10(gg) | | 333-215288 Amendment No. 2 to Form S-1 (filed April 5, 2017) | | 10.28 | | — | | First Amendment, dated June 1, 2007, to Lease Agreement, dated February 14, 2002 |
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| 10(hh) | | 001-38086 Form 8-K (filed July 7, 2017) | | 10(a) | | — | | Asset Purchase Agreement, dated as of July 5, 2017, by and among Odessa-Ector Power Partners, L.P., La Frontera Holdings, LLC, Vistra Operations Company LLC, Koch Resources, LLC |
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| 10(ii) | | 001-38086 Form 8-K (filed October 31, 2017) | | 10.1 | | — | | Merger Support Agreement, dated as of October 29, 2017, by and between Vistra Energy Corp. and Terawatt Holdings, LP |
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| 10(jj) | | 001-38086 Form 8-K (filed October 31, 2017) | | 10.2 | | — | | Merger Support Agreement, dated as of October 29, 2017, by and among Vistra Energy Corp. and Oaktree Opportunities Fund VIII, L.P., Oaktree Huntington Investment Fund, L.P., Oaktree Opportunities Fund VIII (Parallel 2), L.P., Oaktree Opportunities Fund VIIIb, L.P., Oaktree Opportunities Fund IX, L.P. and Oaktree Opportunities Fund IX (Parallel 2), L.P. |
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| (12) | | Statement Regarding Computation of Ratios | | | | | | |
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| 12(a) | | ** | | | | — | | Computation of Ratio of Earnings to Fixed Charges. |
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| (21) | | Subsidiaries of the Registrant | | | | | | |
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| 21(a) | | ** | | | | — | | Subsidiaries of Vistra Energy Corp. |
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| (23) | | Consent of Experts | | | | | | |
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| 23(a) | | ** | | | | — | | Consent of Deloitte & Touche LLP |
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| (31) | | Rule 13a-14(a) / 15d-14(a) Certifications | | | | | | |
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| 31(a) | | ** | | | | — | | Certification of Curtis A. Morgan, principal executive officer of Vistra Energy Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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| 31(b) | | ** | | | | — | | Certification of J. William Holden, principal financial officer of Vistra Energy Corp., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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| (32) | | Section 1350 Certifications | | | | | | |
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| 32(a) | | ** | | | | — | | Certification of Curtis A. Morgan, principal executive officer of Vistra Energy Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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| 32(b) | | ** | | | | — | | Certification of J. William Holden, principal financial officer of Vistra Energy Corp., pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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| (95) | | Mine Safety Disclosures | | | | | | |
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| 95(a) | | ** | | | | — | | Mine Safety Disclosures |
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| Exhibits | | Previously Filed With File Number* | | As Exhibit | | | | |
| | XBRL Data Files | | | | | | |
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| 101.INS | | ** | | | | — | | XBRL Instance Document |
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| 101.SCH | | ** | | | | — | | XBRL Taxonomy Extension Schema Document |
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| 101.CAL | | ** | | | | — | | XBRL Taxonomy Extension Calculation Document |
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| 101.DEF | | ** | | | | — | | XBRL Taxonomy Extension Definition Document |
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| 101.LAB | | ** | | | | — | | XBRL Taxonomy Extension Labels Document |
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| 101.PRE | | ** | | | | — | | XBRL Taxonomy Extension Presentation Document |
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| * | Incorporated herein by reference |