Business Description

1 Market Discussion 1 Business Strategy 6 Human Capital Resources 7 Environmental Regulations and Related Considerations 9 Corporate Information 16 Available Information 16 Item 1A. RISK FACTORS 17 Item 1B. UNRESOLVED STAFF COMMENTS 45 Item 1C. CYBERSECURITY 46 Item 2. PROPERTIES 47 Item 3. LEGAL PROCEEDINGS 49 Item 4. MINE SAFETY DISCLOSURES 49 PART II. Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 50 Item 6. [RESERVED] 51 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, AND RESULTS OF OPERATIONS 51 K ey Financial Results 52 B usiness Environment and Outlook 53 Noteworthy Developments 53 F actors Affecting Our Financial Condition and Results of Oper ations 57 Results of Operations 60 Liquidity and Capital Resources 67 Critical Accounting Estimates 70 Changes in Accounting Standards 73 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 73 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 77 R eport of Independent Registered Public Accounting Firm 77 Consolidated Statements of Operations 79 Consolidated Statements of Comprehensive Income (Loss) 79 Consolidated Balance Sheets 80 Consolidated Statements of Cash Flows 82 Consolidated Statement of Changes in Equity 84 Notes to Consolidated Financial Statements: 86 1. Business and Significant Accounting Policies 86 2. Acquisitions 92 3. Revenue 97 4. Other Income, Net 101 5. Government Grants 102 6. Income Taxes 103 7. Property, Plant, and Equipment 106 i 8. Loss Events and Insurance Recoveries 107 9. Goodwill and Identifiable Intangible Assets and Liabilities 110 10. Collateral Financing Agreement with Affiliate 112 11. Debt, Credit Facilities, and Financings 113 12. Leases 122 13. Derivatives 123 14. Fair Value Measurements 128 15. Asset Retirement Obligations 132 16. Pension and Other Postretirement Employee Benefits (OPEB) Plans 133 17. Stock-Based Compensation 138 18. Commitments and Contingencies 140 19. Equity 147 20. Earnings Per Share 150 21. Segment Information 150 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 154 Item 9A. CONTROLS AND PROCEDURES 154 Item 9B. OTHER INFORMATION 155 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 156 PART III. Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 157 Item 11. EXECUTIVE COMPENSATION 157 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 157 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 157 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 157 PART IV. Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 158 Item 16. FORM 10-K SUMMARY 180 Signatures 181 ii GLOSSARY OF TERMS AND ABBREVIATIONS When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below. Current and Former Related Entities: Ambit Energy Ambit Holdings, LLC, and/or its subsidiaries (d/b/a Ambit Energy), depending on context Ambit Texas Ambit Texas, LLC, a wholly owned subsidiary of Vistra BCOP BCOP Borrower LLC, a subsidiary of Vistra Zero Dynegy Dynegy Inc., and/or its subsidiaries, depending on context Dynegy Energy Services Dynegy Energy Services, LLC and Dynegy Energy Services (East), LLC (each d/b/a Dynegy, Better Buy Energy, Brighten Energy, Honor Energy and True Fit Energy), indirect, wholly owned subsidiaries of Vistra, that are REPs in certain areas of MISO and PJM, respectively, and are engaged in the retail sale of electricity to residential and business customers EFH Corp.…