Item 1A. RISK FACTORS

As of the date of this Quarterly Report on Form 10-Q, except as set forth below, there have been no material changes to the risk factors discussed in Part I, Item 1A Risk Factors in our 2022 Form 10-K. We could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations.

The Transactions are subject to a number of conditions which, if not satisfied or waived, would delay the Transactions or adversely impact our ability to complete the Transactions on the terms set forth in the Transaction Agreement or at all.

The completion of the Transactions is subject to the satisfaction or waiver of a number of conditions, including (a) receipt of all requisite regulatory approvals, including approvals of the NRC and the FERC, (b) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and (c) the divestment of Energy Harbor's remaining fossil assets. These closing conditions may not be fulfilled in a timely manner or at all, and, accordingly, the Transactions may not be completed.

If we are unable to complete the Transactions, we still will incur and will remain liable for significant transaction costs, including legal, accounting, advisory and other costs relating to the Transactions. Also, depending upon the reasons for not completing the Transactions, we may be required to pay Energy Harbor a termination fee of $225 million. If such a termination fee is payable, the payment could affect Vistra's share price and the overall cash flows of the Company.

Failure to consummate the Transactions as currently contemplated or at all could adversely affect the price of Vistra's common stock and our future business and financial results.

The completion of the Transactions is subject to the satisfaction or waiver of a number of conditions. We cannot guarantee when or if these conditions will be satisfied or that the Transactions will be successfully completed. If the Transactions are not consummated, or are consummated on different terms than as contemplated by the Transaction Agreement, we could be adversely affected and subject to a variety of risks associated with the failure to consummate the Transactions, or to consummate the Transactions as contemplated by the Transaction Agreement, including:

• our stockholders may be prevented from realizing the anticipated potential benefits of the Transactions;

• the market price of our common stock could decline significantly;

• reputational harm due to the adverse public perception of any failure to successfully complete the Transactions;

• under certain circumstances, we may be required to pay Energy Harbor a termination fee of up to $225 million or reimburse Energy Harbor's expenses up to $20 million; and

• the attention of our management and employees may be diverted from their day-to-day business and operational matters and our relationships with our customers and suppliers may be disrupted as a result of efforts relating to attempting to consummate the Transactions.

Any delay in the consummation of the Transactions, any uncertainty about the consummation of the Transactions on terms other than those contemplated by the Transaction Agreement and any failure to consummate the Transactions could adversely affect our business, financial results and common stock price.

Following the completion of the Transactions, we may be unable to successfully integrate Energy Harbor's businesses with Vistra's nuclear and retail businesses and its Vistra Zero renewable and energy storage projects or realize the anticipated synergies and other expected benefits of the Transactions on the anticipated timeframe or at all.

The Transactions involve the combination of Energy Harbor's nuclear and retail businesses with Vistra's nuclear and retail businesses and Vistra Zero renewables and energy storage projects under a newly-formed subsidiary holding company, Vistra Vision. This new combination expects to benefit from certain cost savings, operating efficiencies and a growing renewables and energy storage portfolio, some of which will take time to realize. We will be required to devote significant management attention and resources to the integration of our and Energy Harbor's business practices and operations into Vistra Vision. The potential difficulties we may encounter in building Vistra Vision include the following:

• the inability to successfully combine our nuclear, retail, renewables and battery storage business and Energy Harbor's nuclear and retail businesses in a manner that permits Vistra Vision to achieve the cost savings anticipated to result from the Transactions, which would result in the anticipated benefits of the Transactions not being realized in the timeframe currently anticipated or at all;

• the complexities associated with maintaining the second-largest competitive nuclear fleet in the U.S.;

• the complexities of combining two companies with different histories, geographic footprints and asset mixes;

• the complexities in combining two companies with separate technology systems;

• potential unknown liabilities and unforeseen increased expenses, delays or conditions associated with the Transactions;

• failure to perform by third-party service providers who provide key services for the combined company; and

• performance shortfalls as a result of the diversion of management’s attention caused by completing the Transactions and integrating the companies' operations.

For all these reasons, it is possible that the integration process could result in the distraction of our management, the disruption of our ongoing business or inconsistencies in operations, services, standards, controls, policies and procedures, any of which could adversely affect our ability to maintain relationships with operators, vendors and employees, to achieve the anticipated benefits of the Transactions, or could otherwise materially and adversely affect its business and financial results.

In consummating the Transactions, Vistra Operations will take on a significant amount of indebtedness. As a result, it may be more difficult for Vistra Operations to pay or refinance its debts or take other actions, and Vistra Operations may need to divert its cash flow from operations (including cash flow from the new Vistra Vision entity) to debt service payments.

Vistra Operations will have significant indebtedness following completion of the Transactions. Initially a substantial portion of such indebtedness will be subject to rising changes in interest rates. In addition, subject to the limits contained in the documents governing such indebtedness, Vistra Operations may be able to incur significant additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If the combined company does so, the risks related to its high level of debt could intensify. The amount of such indebtedness could have material adverse consequences for Vistra Operations, including:

• hindering its ability to adjust to changing market, industry or economic conditions;

• limiting its ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or to fund future working capital, capital expenditures, acquisitions or emerging businesses or other general corporate purposes;

• limiting the amount of free cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses;

• making it more vulnerable to economic or industry downturns, including interest rate increases; and

• placing it at a competitive disadvantage compared to less leveraged competitors.

Moreover, to respond to competitive challenges, Vistra Operations may be required to raise significant additional capital to execute its business strategy. Vistra Operations' ability to arrange additional financing will depend on, among other factors, its financial position and performance, as well as prevailing market conditions and other factors beyond its control. Even if Vistra Operations is able to obtain additional financing, its credit ratings could be adversely affected, which could raise its borrowing costs and limit its future access to capital and its ability to satisfy its obligations under its indebtedness.

**Item 2.**UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Exchange Act, as amended, during the quarter ended June 30, 2023.

In October 2021, we announced that the Board had authorized a share repurchase program (Share Repurchase Program) under which up to $2.0 billion of our outstanding common stock may be repurchased. The Share Repurchase Program became effective on October 11, 2021. In August 2022 and March 2023, the Board authorized incremental amounts of $1.25 billion and $1.0 billion, respectively, for repurchases to bring the total authorized under the Share Repurchase Program to $4.25 billion. We expect to complete repurchases under the Share Repurchase Program by the end of 2024.

Under the Share Repurchase Program, any purchases of shares of the Company's stock may be repurchased from time to time in open-market transactions at prevailing market prices, in privately negotiated transactions, pursuant to plans complying with the Exchange Act, or by other means in accordance with federal securities laws. The actual timing, number and value of shares repurchased under the Share Repurchase Program or otherwise will be determined at our discretion and will depend on a number of factors, including our capital allocation priorities, the market price of our stock, general market and economic conditions, applicable legal requirements and compliance with the terms of our debt agreements and the certificate of designation of the Series A Preferred Stock and the Series B Preferred Stock, respectively.

See Note 14 to the Financial Statements for more information concerning the Share Repurchase Program.

**Item 3.**DEFAULTS UPON SENIOR SECURITIES

None.