VISTRA ENERGY CORP., 8-K filed on 6/15/2018
Current report filing
v3.8.0.1
Document And Entity Information - USD ($)
12 Months Ended
Dec. 31, 2017
Feb. 21, 2018
Jun. 30, 2017
Document And Entity Information [Abstract]      
Entity Registrant Name Vistra Energy Corp.    
Entity Central Index Key 0001692819    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Document Type 8-K    
Document Period End Date Dec. 31, 2017    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus Q4    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   428,447,631  
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Public Float     $ 5,404,454,926
v3.8.0.1
Statements Of Consolidated Income (Loss) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 02, 2016
Dec. 31, 2017
Dec. 31, 2015
Successor        
Operating revenues $ 1,191   $ 5,430  
Fuel, purchased power costs and delivery fees (720)   (2,935)  
Net gain from commodity hedging and trading activities 0   0  
Operating costs (208)   (973)  
Depreciation and amortization (216)   (699)  
Selling, general and administrative expenses (208)   (600)  
Impairment of goodwill 0   0  
Impairment of long-lived assets 0   (25)  
Operating income (loss) (161)   198  
Other income 10   37  
Other deductions 0   (5)  
Interest expense and related charges (60)   (193)  
Impacts of Tax Receivable Agreement (22)   213  
Reorganization items 0   0  
Income (loss) before income taxes (233)   250  
Income tax (expense) benefit 70   (504)  
Net income (loss) $ (163)   $ (254)  
Weighted average shares of common stock outstanding:        
Weighted average shares of common stock outstanding - basic 427,560,620   427,761,460  
Weighted average shares of common stock outstanding - diluted 427,560,620   427,761,460  
Net income (loss) per weighted average share of common stock outstanding:        
Net income (loss) per weighted average share of common stock outstanding - basic $ (0.38)   $ (0.59)  
Net income (loss) per weighted average share of common stock outstanding - diluted (0.38)   (0.59)  
Dividend declared per share of common stock $ 2.32   $ 0.00  
Predecessor        
Operating revenues   $ 3,973   $ 5,370
Fuel, purchased power costs and delivery fees   (2,082)   (2,692)
Net gain from commodity hedging and trading activities   282   334
Operating costs   (664)   (834)
Depreciation and amortization   (459)   (852)
Selling, general and administrative expenses   (482)   (676)
Impairment of goodwill   0   (2,200)
Impairment of long-lived assets   0   (2,541)
Operating income (loss)   568   (4,091)
Other income   19   18
Other deductions   (75)   (93)
Interest expense and related charges   (1,049)   (1,289)
Impacts of Tax Receivable Agreement   0   0
Reorganization items   22,121   (101)
Income (loss) before income taxes   21,584   (5,556)
Income tax (expense) benefit   1,267   879
Net income (loss)   $ 22,851   $ (4,677)
v3.8.0.1
Statements Of Consolidated Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 02, 2016
Dec. 31, 2017
Dec. 31, 2015
Successor        
Net income (loss) $ (163)   $ (254)  
Other comprehensive income (loss), net of tax effects:        
Effects related to pension and other retirement benefit obligations (net of tax (benefit) expense of $(6), $3, $— and $—) 6   (23)  
Other comprehensive income, net of tax effects —cash flow hedges derivative value net loss related to hedged transactions recognized during the period (net of tax benefit of $— in all periods) 0   0  
Total other comprehensive income (loss) 6   (23)  
Comprehensive income (loss) $ (157)   $ (277)  
Predecessor        
Net income (loss)   $ 22,851   $ (4,677)
Other comprehensive income (loss), net of tax effects:        
Effects related to pension and other retirement benefit obligations (net of tax (benefit) expense of $(6), $3, $— and $—)   0   0
Other comprehensive income, net of tax effects —cash flow hedges derivative value net loss related to hedged transactions recognized during the period (net of tax benefit of $— in all periods)   1   2
Total other comprehensive income (loss)   1   2
Comprehensive income (loss)   $ 22,852   $ (4,675)
v3.8.0.1
Statements Of Consolidated Comprehensive Income (Loss) (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 02, 2016
Dec. 31, 2017
Dec. 31, 2015
Successor        
Effects related to pension and other retirement benefit obligations (net of tax (benefit) expense of $(6), $3, $— and $—) $ 3   $ (6)  
Other comprehensive income, net of tax effects —cash flow hedges derivative value net loss related to hedged transactions recognized during the period (net of tax benefit of $— in all periods) $ 0   $ 0  
Predecessor        
Effects related to pension and other retirement benefit obligations (net of tax (benefit) expense of $(6), $3, $— and $—)   $ 0   $ 0
Other comprehensive income, net of tax effects —cash flow hedges derivative value net loss related to hedged transactions recognized during the period (net of tax benefit of $— in all periods)   $ 0   $ 0
v3.8.0.1
Statements Of Consolidated Cash Flows - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 02, 2016
Dec. 31, 2017
Dec. 31, 2015
Cash flows — investing activities:        
Cash and cash equivalents, beginning balance     $ 843  
Cash and cash equivalents, ending balance $ 843   1,487  
Successor        
Cash flows — operating activities:        
Net income (loss) (163)   (254)  
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:        
Depreciation and amortization 285   835  
Deferred income tax expense (benefit), net (76)   418  
Unrealized net (gain) loss from mark-to-market valuations of derivatives 176   116  
Gain on extinguishment of LSTC 0   0  
Net loss from adopting fresh start reporting 0   0  
Contract claims adjustments of Predecessor 0   0  
Noncash adjustment for estimated allowed claims related to debt 0   0  
Adjustment to intercompany claims pursuant to Settlement Agreement 0   0  
Impairment of goodwill 0   0  
Impairment of long-lived assets 0   25  
Write-off of intangible and other assets 0   0  
Impacts of Tax Receivables Agreement 22   (213)  
Increase in asset retirement obligation liability 0   112  
Accretion expense 6   60  
Other, net 1   69  
Changes in operating assets and liabilities:        
Affiliate accounts receivable/payable — net 0   0  
Accounts receivable — trade 135   7  
Inventories 3   22  
Accounts payable — trade (79)   (30)  
Commodity and other derivative contractual assets and liabilities (48)   (1)  
Margin deposits, net (193)   146  
Accrued interest 32   (10)  
Alcoa contract settlement 0   238  
Tax Receivable Agreement payment 0   26  
Major plant outage deferral 0   (66)  
Other — net assets (2)   4  
Other — net liabilities (18)   (66)  
Cash provided by (used in) operating activities 81   1,386  
Cash flows — financing activities:        
Repayments/repurchases of debt 0   (191)  
Incremental Term Loan B Facility 1,000   0  
Special dividend (992)   0  
Net proceeds from issuance of preferred stock 0   0  
Payments to extinguish claims of TCEH first lien creditors 0   0  
Cash distributed for TCEH unsecured claims 0   0  
Payment to extinguish claims of TCEH unsecured creditors 0   0  
TCEH DIP Roll Facilities and DIP Facility financing fees 0   0  
Other, net (2)   (10)  
Cash provided by (used in) financing activities 6   (201)  
Cash flows — investing activities:        
Capital expenditures (48)   (114)  
Nuclear fuel purchases (41)   (62)  
Solar development expenditures 0   (190)  
Odessa Acquisition 0   (355)  
Lamar and Forney acquisition — net of cash acquired 0   0  
Changes in restricted cash (Predecessor) 0   0  
Proceeds from sales of nuclear decommissioning trust fund securities 25   252  
Investments in nuclear decommissioning trust fund securities (30)   (272)  
Notes/advances due from affiliates 0   0  
Other, net 1   14  
Cash used in investing activities (93)   (727)  
Net change in cash, cash equivalents and restricted cash (6)   458  
Cash, cash equivalents and restricted cash — beginning balance 1,594   1,588  
Cash, cash equivalents and restricted cash — ending balance 1,588 $ 1,594 $ 2,046  
Predecessor        
Cash flows — operating activities:        
Net income (loss)   22,851   $ (4,677)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:        
Depreciation and amortization   532   995
Deferred income tax expense (benefit), net   (1,270)   (883)
Unrealized net (gain) loss from mark-to-market valuations of derivatives   36   (119)
Gain on extinguishment of LSTC   (24,344)   0
Net loss from adopting fresh start reporting   2,013   0
Contract claims adjustments of Predecessor   13   54
Noncash adjustment for estimated allowed claims related to debt   0   896
Adjustment to intercompany claims pursuant to Settlement Agreement   0   (1,037)
Impairment of goodwill   0   2,200
Impairment of long-lived assets   0   2,541
Write-off of intangible and other assets   45   84
Impacts of Tax Receivables Agreement   0   0
Increase in asset retirement obligation liability   0   0
Accretion expense   0   0
Other, net   63   57
Changes in operating assets and liabilities:        
Affiliate accounts receivable/payable — net   31   (4)
Accounts receivable — trade   (216)   17
Inventories   71   34
Accounts payable — trade   26   40
Commodity and other derivative contractual assets and liabilities   29   27
Margin deposits, net   (124)   129
Accrued interest   (10)   2
Alcoa contract settlement   0   0
Tax Receivable Agreement payment   0   0
Major plant outage deferral   0   0
Other — net assets   (3)   (22)
Other — net liabilities   19   (97)
Cash provided by (used in) operating activities   (238)   237
Cash flows — financing activities:        
Repayments/repurchases of debt   (2,655)   (21)
Incremental Term Loan B Facility   0   0
Special dividend   0   0
Net proceeds from issuance of preferred stock   69   0
Payments to extinguish claims of TCEH first lien creditors   (486)   0
Cash distributed for TCEH unsecured claims   (429)   0
Payment to extinguish claims of TCEH unsecured creditors   4,680   0
TCEH DIP Roll Facilities and DIP Facility financing fees   (112)   (9)
Other, net   (8)   0
Cash provided by (used in) financing activities   1,059   (30)
Cash flows — investing activities:        
Capital expenditures   (230)   (337)
Nuclear fuel purchases   (33)   (123)
Solar development expenditures   0   0
Odessa Acquisition   0   0
Lamar and Forney acquisition — net of cash acquired   (1,343)   0
Changes in restricted cash (Predecessor)   (233)   123
Proceeds from sales of nuclear decommissioning trust fund securities   201   401
Investments in nuclear decommissioning trust fund securities   (215)   (418)
Notes/advances due from affiliates   (41)   (37)
Other, net   8   (13)
Cash used in investing activities   (1,420)   (650)
Net change in cash and cash equivalents   (599)   (443)
Cash and cash equivalents, beginning balance $ 801 1,400   1,843
Cash and cash equivalents, ending balance   $ 801   $ 1,400
v3.8.0.1
Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2017
Dec. 31, 2016
Current assets:    
Cash and cash equivalents $ 1,487 $ 843
Restricted cash 59 95
Trade accounts receivable — net 582 612
Inventories 253 285
Commodity and other derivative contractual assets 190 350
Margin deposits related to commodity contracts 30 213
Prepaid expense and other current assets 72 75
Total current assets 2,673 2,473
Restricted cash 500 650
Investments 1,240 1,064
Property, plant and equipment — net 4,820 4,443
Goodwill 1,907 1,907
Identifiable intangible assets — net 2,530 3,205
Commodity and other derivative contractual assets 58 64
Accumulated deferred income taxes 710 1,122
Other noncurrent assets 162 239
Total assets 14,600 15,167
Current liabilities:    
Long-term debt due currently 44 46
Trade accounts payable 473 479
Commodity and other derivative contractual liabilities 224 359
Margin deposits related to commodity contracts 4 41
Accrued taxes 58 31
Accrued taxes other than income 136 128
Accrued interest 16 33
Asset retirement obligations 99 55
Other current liabilities 297 332
Total current liabilities 1,351 1,504
Long-term debt, less amounts due currently 4,379 4,577
Commodity and other derivative contractual liabilities 102 2
Tax Receivable Agreement obligation 333 596
Asset retirement obligation 1,837 1,671
Other noncurrent liabilities and deferred credits 256 220
Total liabilities 8,258 8,570
Commitments and Contingencies
Total equity:    
Common stock (par value — $0.01; number of shares authorized — 1,800,000,000) (shares outstanding: December 31, 2017 — 428,398,802; December 31, 2016 — 427,580,232) 4 4
Additional paid-in-capital 7,765 7,742
Retained deficit (1,410) (1,155)
Accumulated other comprehensive income (loss) (17) 6
Total equity 6,342 6,597
Total liabilities and equity $ 14,600 $ 15,167
v3.8.0.1
Consolidated Balance Sheets Consolidated Balance Sheets (Parenthetical)
Dec. 31, 2017
$ / shares
shares
Statement of Changes in Financial Position [Abstract]  
Common Stock, Par or Stated Value Per Share | $ / shares $ 0.01
Common stock, shares authorized 1,800,000,000
Common stock, shares outstanding 428,398,802
v3.8.0.1
Statements of Consolidated Equity Statement of Consolidated Equity - USD ($)
$ in Millions
Total
Common Stock [Member]
Capital Units [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stockholders' Equity Attributable to Parent | Predecessor $ (18,209)   $ (18,174) $ 0 $ 0 $ (35)
Net income (loss) | Predecessor (4,677)   (4,677)      
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | Predecessor 0          
Cash flow hedges - change during the period | Predecessor 2   0     2
Stockholders' Equity Attributable to Parent | Predecessor (22,884)   (22,851) 0 0 (33)
Net income (loss) | Predecessor 22,851   22,851      
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | Predecessor 0          
Cash flow hedges - change during the period | Predecessor 1          
Cash flow hedges — change during period | Predecessor (33)         (33)
Stockholders' Equity Attributable to Parent | Predecessor 0   $ 0 0 0 0
Shares issued upon Emergence | Successor 7,741 $ 4   7,737    
Effects of stock-based compensation | Successor 4     4    
Other issuances of common stock | Successor 1     1    
Net income (loss) | Successor (163)       (163)  
Dividends declared on common stock | Successor (992)       (992)  
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | Successor 6         6
Cash flow hedges - change during the period | Successor 0          
Stockholders' Equity Attributable to Parent | Successor 6,597 4   7,742 (1,155) 6
Stockholders' Equity Attributable to Parent 6,597          
Effects of stock-based compensation | Successor 23     23    
Net income (loss) | Successor (254)       (254)  
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | Successor (23)         (23)
Stockholders' Equity, Other | Successor (1)       (1)  
Cash flow hedges - change during the period | Successor 0          
Stockholders' Equity Attributable to Parent | Successor 6,342 $ 4   $ 7,765 $ (1,410) $ (17)
Stockholders' Equity Attributable to Parent $ 6,342          
v3.8.0.1
Business And Significant Accounting Policies
12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
Business And Significant Accounting Policies
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

References in this report to "we," "our," "us" and "the Company" are to Vistra Energy and/or its subsidiaries in the Successor period, and to TCEH and/or its subsidiaries in the Predecessor periods, as apparent in the context. See Glossary for defined terms.

Vistra Energy is a holding company operating an integrated power business in Texas. Through our Luminant and TXU Energy subsidiaries, we are engaged in competitive electricity market activities including power generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity to end users. Prior to the Effective Date, TCEH was a holding company for subsidiaries principally engaged in the same activities as Vistra Energy.

Subsequent to the Effective Date, Vistra Energy has three reportable segments: (i) our Wholesale Generation segment, consisting largely of Luminant, (ii) our Retail Electricity segment, consisting largely of TXU Energy, and (iii) our Asset Closure segment, consisting of financial results associated with retired plant and mines. The Asset Closure segment was established as of January 1, 2018; however, these financial statements have been recast to reflect the changes resulting from the establishment of the Asset Closure segment. Prior to the Effective Date, there were no reportable business segments for our Predecessor. See Note 20 for further information concerning reportable business segments.

On the Petition Date, EFH Corp. and the substantial majority of its direct and indirect subsidiaries, including the Debtors, filed voluntary petitions for relief under the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

On the Effective Date, subsidiaries of TCEH that were Debtors in the Chapter 11 Cases (the TCEH Debtors) and certain EFH Corp. subsidiaries (the Contributed EFH Debtors) completed their reorganization under the Bankruptcy Code and emerged from the Chapter 11 Cases as subsidiaries of a newly formed company, Vistra Energy (our Successor). On the Effective Date, Vistra Energy was spun-off from EFH Corp. in a tax-free transaction to the former first lien creditors of TCEH (Spin-Off). As a result, as of the Effective Date, Vistra Energy is a holding company for subsidiaries principally engaged in competitive electricity market activities including power generation, wholesale energy sales and purchases, commodity risk management and retail sales of electricity to end users. TCEH is the Predecessor to Vistra Energy. See Note 5 for further discussion regarding the Chapter 11 Cases.

Basis of Presentation

As of the Effective Date, Vistra Energy applied fresh start reporting under the applicable provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 852, Reorganizations (ASC 852). Fresh start reporting included (1) distinguishing the consolidated financial statements of the entity that was previously in restructuring (TCEH, or the Predecessor) from the financial statements of the entity that emerges from restructuring (Vistra Energy, or the Successor), (2) accounting for the effects of the Plan of Reorganization, (3) assigning the reorganization value of the Successor entity by measuring all assets and liabilities of the Successor entity at fair value, and (4) selecting accounting policies for the Successor entity. The financial statements of Vistra Energy for periods subsequent to the Effective Date are not comparable to the financial statements of TCEH for periods prior to the Effective Date, as those previous periods do not give effect to any adjustments to the carrying values of assets or amounts of liabilities that resulted from the Plan of Reorganization and the related application of fresh start reporting. The reorganization value of Vistra Energy was assigned to its assets and liabilities in conformity with the procedures specified by FASB ASC 805, Business Combinations, and the portion of the reorganization value that was not attributable to identifiable tangible or intangible assets was recognized as goodwill. See Note 6 for further discussion of fresh start reporting.

The consolidated financial statements of the Predecessor reflect the application of ASC 852 as it applies to entities that have filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code. As a result, the consolidated financial statements of the Predecessor have been prepared as if TCEH was a going concern and contemplated the realization of assets and liabilities in the normal course of business. During the Chapter 11 Cases, the Debtors operated their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The guidance requires that transactions and events directly associated with the reorganization be distinguished from the ongoing operations of the business. In addition, the guidance provides for changes in the accounting and presentation of liabilities. Prior to the Effective Date, the Predecessor recorded the effects of the Plan of Reorganization in accordance with ASC 852. See Predecessor Reorganization Items in Note 5 for further discussion of these accounting and reporting changes.

The consolidated financial statements have been prepared in accordance with GAAP and on the same basis as the audited financial statements and related notes contained in our prospectus filed in May 2017 with the SEC pursuant to Rule 424(b) of the Securities Act. All intercompany items and transactions have been eliminated in consolidation. All dollar amounts in the financial statements and tables in the notes are stated in millions of U.S. dollars unless otherwise indicated.

Use of Estimates

Preparation of financial statements requires estimates and assumptions about future events that affect the reporting of assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense, including fair value measurements, estimates of expected obligations, judgment related to the potential timing of events and other estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Derivative Instruments and Mark-to-Market Accounting

We enter into contracts for the purchase and sale of electricity, natural gas, coal, uranium and other commodities utilizing instruments such as options, swaps, futures and forwards primarily to manage commodity price and interest rate risks. If the instrument meets the definition of a derivative under accounting standards related to derivative instruments and hedging activities, changes in the fair value of the derivative are recognized in net income as unrealized gains and losses. This recognition is referred to as mark-to-market accounting. The fair values of our unsettled derivative instruments under mark-to-market accounting are reported in the consolidated balance sheets as commodity and other derivative contractual assets or liabilities. We report derivative assets and liabilities in the consolidated balance sheets without taking into consideration netting arrangements we have with counterparties. Margin deposits that contractually offset these assets and liabilities are reported separately in the consolidated balance sheets, with the exception of certain margin amounts related to changes in fair value on certain CME transactions that, beginning in January 2017, are legally characterized as settlement of derivative contracts rather than collateral. When derivative instruments are settled and realized gains and losses are recorded, the previously recorded unrealized gains and losses and derivative assets and liabilities are reversed. See Notes 15 and 16 for additional information regarding fair value measurement and commodity and other derivative contractual assets and liabilities. A commodity-related derivative contract may be designated as a normal purchase or sale if the commodity is to be physically received or delivered for use or sale in the normal course of business. If designated as normal, the derivative contract is accounted for under the accrual method of accounting (not marked-to-market) with no balance sheet or income statement recognition of the contract until settlement.

Because derivative instruments are frequently used as economic hedges, accounting standards related to derivative instruments and hedging activities allow for hedge accounting, which provides for the designation of such instruments as cash flow or fair value hedges if certain conditions are met. At December 31, 2017 and 2016, there were no derivative positions accounted for as cash flow or fair value hedges.

For the Successor period, we report commodity hedging and trading results as revenue, fuel expense or purchased power in the statements of consolidated income (loss) depending on the type of activity. Electricity hedges, financial natural gas hedges and trading activities are primarily reported as revenue. Physical or financial hedges for coal, diesel or uranium, along with physical natural gas trades, are primarily reported as fuel expense. For the Predecessor periods, all activity was reported as a net gain (loss) from commodity hedging and trading activities. Realized and unrealized gains and losses associated with interest rate swap transactions are reported in the statements of consolidated income (loss) in interest expense for both the Predecessor and Successor.

Revenue Recognition

We record revenue from retail electricity sales under the accrual method of accounting. Revenues are recognized when electricity is provided to customers on the basis of periodic cycle meter readings and include an estimated accrual for the revenues earned from the meter reading date to the end of the period (unbilled revenue).

We record wholesale generation revenue on an accrual basis for transactions that are not accounted for on a mark-to-market basis. These revenues primarily consist of physical electricity sales to ERCOT at the resource node, ERCOT ancillary service revenue for reliability services and certain other electricity sales. Revenue is recognized when electricity and other services are metered by ERCOT or delivered to our customers. See Derivative Instruments and Mark-to-Market Accounting for revenue recognition related to derivative contracts.

Advertising Expense

We expense advertising costs as incurred and include them within selling, general and administrative expenses. Advertising expenses totaled $44 million, $9 million, $35 million and $44 million for the Successor period for the year ended December 31, 2017 and the period from October 3, 2016 through December 31, 2016 and the Predecessor period from January 1, 2016 through October 2, 2016 and the year ended December 31, 2015, respectively.

Impairment of Long-Lived Assets

We evaluate long-lived assets (including intangible assets with finite lives) for impairment whenever indications of impairment exist. The carrying value of such assets is deemed to be impaired if the projected undiscounted cash flows are less than the carrying value. If there is such impairment, a loss would be recognized based on the amount by which the carrying value exceeds the fair value. Fair value is determined primarily by discounted cash flows, supported by available market valuations, if applicable. See Note 4 for discussion of impairments of certain long-lived assets recorded by the Predecessor.

Finite-lived intangibles identified as a result of fresh start reporting are amortized over their estimated useful lives based on the expected realization of economic effects. See Note 7 for details of intangible assets with indefinite lives, including discussion of fair value determinations.

Goodwill and Intangible Assets with Indefinite Lives

As part of fresh start reporting, reorganization value is generally allocated, first, to identifiable tangible assets, identifiable intangible assets and liabilities, then any remaining excess reorganization value is allocated to goodwill (see Note 6). We evaluate goodwill and intangible assets with indefinite lives for impairment at least annually, or when indications of impairment exist. As part of fresh start reporting, we have established October 1 as the date we evaluate goodwill and intangible assets with indefinite lives for impairment. The Predecessor's annual evaluation date was December 1. See Note 7 for details of goodwill, including discussion of fair value determinations and our Predecessor's goodwill impairments.

Nuclear Fuel

Nuclear fuel is capitalized and reported as a component of our property, plant and equipment in our consolidated balance sheets. Amortization of nuclear fuel is calculated on the units-of-production method and is reported as a component of fuel, purchased power costs and delivery fees in our statements of consolidated income (loss).

Major Maintenance Costs

Major maintenance costs incurred by the Successor during generation plant outages are deferred and amortized into operating costs over the period between the major maintenance outages for the respective asset. Other routine costs of maintenance activities are charged to expense as incurred and reported as operating costs in our statements of consolidated income (loss). The Predecessor charged all maintenance activities to expense as incurred.

Defined Benefit Pension Plans and OPEB Plans

On the Effective Date, EFH Corp. transferred sponsorship of certain employee benefit plans (including related assets), programs and policies to a subsidiary of Vistra Energy. Certain health care and life insurance benefits are offered to eligible employees and their dependents upon the retirement of such employee from the company and also offer pension benefits to eligible employees under collective bargaining agreements based on either a traditional defined benefit formula or a cash balance formula. Effective January 1, 2017, the OPEB plan was amended to discontinue the life insurance benefits for active employees. Costs of pension and OPEB plans are dependent upon numerous factors, assumptions and estimates.

Prior to the Effective Date, our Predecessor bore a portion of the costs of the EFH Corp. sponsored pension and OPEB plans and accounted for the arrangement under multiemployer plan accounting.

See Note 17 for additional information regarding pension and OPEB plans.

Stock-Based Compensation

Stock-based compensation is accounted for in accordance with ASC 718, Compensation - Stock Compensation. The fair value of our non-qualified stock options is estimated on the date of grant using the Black-Scholes option-pricing model. Forfeitures are recognized as they occur. We recognize compensation expense for graded vesting awards on a straight-line basis over the requisite service period for the entire award. See Note 18 for additional information regarding stock-based compensation.

Sales and Excise Taxes

Sales and excise taxes are accounted for as "pass through" items on the consolidated balance sheets with no effect on the statements of consolidated income (loss) (i.e., the tax is billed to customers and recorded as trade accounts receivable with an offsetting amount recorded as a liability to the taxing jurisdiction).

Franchise and Revenue-Based Taxes

Unlike sales and excise taxes, franchise and gross receipt taxes are not a "pass through" item. These taxes are imposed on us by state and local taxing authorities, based on revenues or kWh delivered, as a cost of doing business and are recorded as an expense. Rates we charge to customers are intended to recover our costs, including the franchise and gross receipt taxes, but we are not acting as an agent to collect the taxes from customers. We report franchise and revenue-based taxes in SG&A expense in our statements of consolidated income (loss).

Income Taxes

Subsequent to the Effective Date, Vistra Energy will file a consolidated U.S. federal income tax return. Prior to the Effective Date, EFH Corp. filed a consolidated U.S. federal income tax return that included the results of our Predecessor; however, our Predecessor's income tax expense and related balance sheet amounts were recorded as if it filed separate corporate income tax returns.

Deferred income taxes are provided for temporary differences between the book and tax basis of assets and liabilities as required under accounting rules. See Note 8.

We report interest and penalties related to uncertain tax positions as current income tax expense. See Note 8.

Accounting for Contingencies

Our financial results may be affected by judgments and estimates related to loss contingencies. Accruals for loss contingencies are recorded when management determines that it is probable that an asset has been impaired or a liability has been incurred and that such economic loss can be reasonably estimated. Such determinations are subject to interpretations of current facts and circumstances, forecasts of future events and estimates of the financial impacts of such events. See Note 13 for a discussion of contingencies.

Cash and Cash Equivalents

For purposes of reporting cash and cash equivalents, temporary cash investments purchased with a remaining maturity of three months or less are considered to be cash equivalents.

Restricted Cash

The terms of certain agreements require the restriction of cash for specific purposes. See Notes 12 and 21 for more details regarding restricted cash.

Property, Plant and Equipment

In connection with fresh start reporting, carrying amounts of property, plant and equipment were adjusted to estimated fair values as of the Effective Date (see Note 6). Significant improvements or additions to our property, plant and equipment that extend the life of the respective asset are capitalized at cost, while other costs are expensed when incurred. The cost of self-constructed property additions includes materials and both direct and indirect labor and applicable overhead, including payroll-related costs. Interest related to qualifying construction projects and qualifying software projects is capitalized in accordance with accounting guidance related to capitalization of interest cost. See Note 10.

Depreciation of our property, plant and equipment (except for nuclear fuel) is calculated on a straight-line basis over the estimated service lives of the properties. Depreciation expense is calculated on an asset-by-asset basis. Estimated depreciable lives are based on management's estimates of the assets' economic useful lives. See Note 21.

Asset Retirement Obligations (ARO)

A liability is initially recorded at fair value for an asset retirement obligation associated with the legal obligation associated with law, regulatory, contractual or constructive retirement requirements of tangible long-lived assets in the period in which it is incurred if a fair value is reasonably estimable. At initial recognition of an ARO obligation, an offsetting asset is also recorded for the long-lived asset that the liability corresponds with, which is subsequently depreciated over the estimated useful life of the asset. These liabilities primarily relate to our nuclear generation plant decommissioning, land reclamation related to lignite mining, removal of lignite/coal-fueled plant ash treatment facilities and generation plant asbestos removal and disposal costs. Over time, the liability is accreted for the change in present value and the initial capitalized costs are depreciated over the remaining useful lives of the assets. Generally, changes in estimates related to ARO obligations are recorded as increases or decreases to the liability and related asset as information becomes available. Changes in estimates related to assets that have been retired or for which capitalized costs are not recoverable are reflected in income. See Note 21.

Inventories

Inventories consist of materials and supplies, fuel stock and natural gas in storage. Materials and supplies inventory is valued at weighted average cost and is expensed or capitalized when used for repairs/maintenance or capital projects, respectively. Fuel stock and natural gas in storage are reported at the lower of cost (on a weighted average basis) or market. We expect to recover the value of inventory costs in the normal course of business. See Note 21.

Investments

Investments in a nuclear decommissioning trust fund are carried at current market value in the consolidated balance sheets. Assets related to employee benefit plans represent investments held to satisfy deferred compensation liabilities and are recorded at current market value. See Note 21 for discussion of these and other investments.

Tax Receivable Agreement

The Company accounts for its obligations under the Tax Receivable Agreement (TRA) as a liability in our consolidated balance sheets. The carrying value of the TRA obligation represents the discounted amount of projected payments under the TRA. The projected payments are based on certain assumptions, including but not limited to (a) the federal corporate income tax rate and (b) estimates of our taxable income in the current and future years. Our taxable income takes into consideration the current federal tax code and reflects our current estimates of future results of the business.

The carrying value of the obligation is being accreted to the amount of the gross expected obligation using the effective interest method. Changes in the estimated amount of this obligation resulting from changes to either the timing or amount of TRA payments are recognized in the period of change and are included on our statement of consolidated income (loss) under the heading of Impacts of Tax Receivable Agreement.

Changes in Accounting Standards

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which was further amended through several updates issued by the FASB in 2016 and 2017. The guidance under Topic 606 provides the core principle and key steps in determining the recognition of revenue and expands disclosure requirements related to revenue recognition. We adopted the new standard on January 1, 2018 using the modified retrospective method and elected the practical expedient available under Topic 606 for measuring progress toward complete satisfaction of a performance obligation and for disclosure requirements of remaining performance obligations. The practical expedient allows an entity to recognize revenue in the amount to which the entity has the right to invoice such that the entity has a right to the consideration in an amount that corresponds directly with the value to the customer for performance completed to date. In recent periods, we completed an assessment of all of our performance obligations in our contractual relationships and continued to assess the expanded disclosure requirements. The standard will require expanded disclosure related to revenue from contracts with customers and the related performance obligations. The adoption of the standard will not have a material effect on our results of operations, cash flows or financial condition.

In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases. The ASU amends previous GAAP to require the recognition of lease assets and liabilities for operating leases. The ASU will be effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Retrospective application to comparative periods presented will be required in the year of adoption. We are currently evaluating the impact of this ASU on our financial statements.

In November 2016, the FASB issued ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The ASU requires restricted cash to be included in the cash and cash equivalents and a reconciliation between the change in cash and cash equivalents and the amounts presented on the balance sheet. The ASU modifies the presentation of our statements of consolidated cash flows, but does not have a material impact on our statements of consolidated net income and consolidated balance sheets. We adopted the standard on January 1, 2018. However, the adoption of this ASU has been reflected on a retrospective basis in the financial statements of the Successor. For the Successor period for the year ended December 31, 2017 and the period from October 3, 2016 through December 31, 2016, our statements of consolidated cash flows previously reflected sources of cash from investing activities of $186 million and $48 million, respectively, reported as changes in restricted cash that are now reported in net change in cash, cash equivalents and restricted cash. See the statements of consolidated cash flows and Note 21 for disclosures related to the adoption of this accounting standard.

In January 2017, the FASB issued ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU provides an updated model for determining if acquired assets and liabilities constitute a business. In a business combination, the acquired assets and liabilities are recognized at fair value and goodwill could be recognized. In an asset acquisition, the assets are allocated value based on relative fair value and no goodwill is recognized. The ASU narrows the definition of a business. We adopted this standard in the first quarter of 2017. ASU 2017-01 did not have a material impact on our financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). The ASU provides for the elimination of Step 2 from the goodwill impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds the reporting unit's fair value with certain limitations. We adopted this standard in the first quarter of 2017. ASU 2017-04 did not have a material impact on our financial statements.
v3.8.0.1
Merger Agreement (Notes)
12 Months Ended
Dec. 31, 2017
Merger Transaction [Abstract]  
Merger Transaction [Text Block]

On October 29, 2017, Vistra Energy and Dynegy, entered into the Merger Agreement. Upon the terms and subject to the conditions set forth in the Merger Agreement, which has been approved by the boards of directors of Vistra Energy and Dynegy, Dynegy will merge with and into Vistra Energy, with Vistra Energy continuing as the surviving corporation. The Merger is intended to qualify as a tax-free reorganization under the Internal Revenue Code, as amended, so that none of Vistra Energy, Dynegy or any of the Dynegy stockholders will recognize any gain or loss in the transaction, except that Dynegy stockholders could recognize a gain or loss with respect to cash received in lieu of fractional shares of Vistra Energy's common stock. We expect that Vistra Energy will be the acquirer for both federal tax and accounting purposes.

Upon the closing of the Merger, each issued and outstanding share of Dynegy common stock, par value $0.01 per share, other than shares owned by Vistra Energy or its subsidiaries, held in treasury by Dynegy or held by a subsidiary of Dynegy, will automatically be converted into the right to receive 0.652 shares of common stock, par value $0.01 per share, of Vistra Energy (the Exchange Ratio), except that cash will be paid in lieu of fractional shares, which we expect will result in Vistra Energy's stockholders and Dynegy's stockholders owning approximately 79% and 21%, respectively, of the combined company. Dynegy stock options and equity-based awards outstanding immediately prior to the Effective Time will generally automatically convert upon completion of the Merger into stock options and equity-based awards, respectively, with respect to Vistra Energy's common stock, after giving effect to the Exchange Ratio.

The Merger Agreement also provides that, upon the closing of the Merger, the board of directors of the combined company will be comprised of 11 members, consisting of (a) the eight current directors of Vistra Energy and (b) three of Dynegy's current directors, of whom one will be a Class I director, one will be a Class II director and one will be a Class III director, unless the closing of the Merger occurs after the date of Vistra Energy's 2018 Annual Meeting of Stockholders, in which case one will be a Class I director and two will be Class II directors.

Completion of the Merger is subject to various customary conditions, including, among others, (a) approval by Vistra Energy's stockholders of the issuance of Vistra Energy's common stock in the Merger, (b) adoption of the Merger Agreement by Vistra Energy's stockholders and Dynegy's stockholders, (c) receipt of all requisite regulatory approvals, which includes approvals of the FERC, the PUCT, the Federal Communications Commission and the New York Public Service Commission, and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (HSR Waiting Period) and (d) the approval of the listing of shares to be issued on the NYSE. Each party's obligation to consummate the Merger is also subject to certain additional customary conditions, including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) performance in all material respects by the other party of its obligations under the Merger Agreement and (iii) the receipt by such party of an opinion from its counsel to the effect that the Merger will qualify as a tax-free reorganization within the meaning of the Code. The HSR Waiting Period expired on February 5, 2018.

The Merger Agreement contains customary representations, warranties and covenants of Vistra Energy and Dynegy, including, among others, covenants (a) to conduct their respective businesses in the ordinary course during the interim period between the execution of the Merger Agreement and completion of the Merger, (b) not to take certain actions during the interim period except with the consent of the other party, (c) that Vistra Energy and Dynegy will convene and hold meetings of their respective stockholders to obtain the required stockholder approvals, and (d) that the parties use their respective reasonable best efforts to take all actions necessary to obtain all governmental and regulatory approvals and consents (except that Vistra Energy shall not be required, and Dynegy shall not be permitted, to take any action that constitutes or would reasonably be expected to have certain specified burdensome effects). Each of Vistra Energy and Dynegy is also subject to restrictions on its ability to solicit alternative acquisition proposals and to provide information to, and engage in discussion with, third parties regarding such proposals, except under limited circumstances to permit Vistra Energy's and Dynegy's boards of directors to comply with their respective fiduciary duties.

The Merger Agreement contains certain termination rights for both Vistra Energy and Dynegy, including in specified circumstances in connection with an alternative acquisition proposal that has been determined to be a superior offer. Upon termination of the Merger Agreement, under specified circumstances (a) for a failure by Vistra Energy to obtain certain requisite regulatory approvals, Vistra Energy may be required to pay Dynegy a termination fee of $100 million, (b) in connection with a superior offer, acquisition proposal or unforeseeable material intervening event, Vistra Energy may be required to pay a termination fee to Dynegy of $100 million, and (c) in connection with a superior offer, acquisition proposal or an unforeseeable material intervening event, Dynegy may be required to pay to Vistra Energy a termination fee of $87 million. In addition, if the Merger Agreement is terminated (i) because Vistra Energy's stockholders do not approve the issuance of Vistra Energy's common stock in the Merger or do not adopt the Merger Agreement, then Vistra Energy will be obligated to reimburse Dynegy for its reasonable out-of-pocket fees and expenses incurred in connection with the Merger Agreement, or (ii) because Dynegy's stockholders do not adopt the Merger Agreement, then Dynegy will reimburse Vistra Energy for its reasonable out-of-pocket fees and expenses incurred in connection with the Merger Agreement, each of which is subject to a cap of $22 million. Such expense reimbursement may be deducted from the foregoing termination fees, if ultimately payable.

The Merger is subject to certain risks and uncertainties, and there can be no assurance that we will be able to complete the Merger on the expected timeline or at all.

Merger Support Agreements — Concurrently with the execution of the Merger Agreement, certain stockholders of Vistra Energy, including affiliates of Apollo Management Holdings L.P. (collectively, the Apollo Entities), affiliates of Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P. (collectively, the Brookfield Entities) and certain affiliates of Oaktree Capital Management, L.P. (Oaktree), such agreements representing in the aggregate approximately 34% of the shares of Vistra Energy's common stock as of October 29, 2017 that will be entitled to vote on the Merger, and certain stockholders of Dynegy, including Terawatt Holdings, LP, an affiliate of certain affiliated investment funds of Energy Capital Partners III, LLC (Terawatt) and certain affiliates of Oaktree, such agreements representing in the aggregate approximately 21% of the shares of Dynegy's common stock as of October 29, 2017 that will be entitled to vote on the Merger, have entered into the Merger Support Agreements, pursuant to which each such stockholder agreed to vote their shares of common stock of Vistra Energy or Dynegy, as applicable, to adopt the Merger Agreement, and in the case of stockholders of Vistra Energy, approve the stock issuance. The Merger Support Agreements will automatically terminate upon a change of recommendation by the applicable board of directors or the termination of the Merger Agreement in accordance with its terms.
v3.8.0.1
Acquisition and Development of Generation Facilities (Notes)
12 Months Ended
Dec. 31, 2017
Acquisition And Development Of Generation Facilities [Abstract]  
Business Combination Disclosure [Text Block]

Odessa Acquisition (Successor)

In August 2017, La Frontera Holdings, LLC (La Frontera), an indirect wholly owned subsidiary of Vistra Energy, purchased a 1,054 MW CCGT natural gas fueled generation plant (and other related assets and liabilities) located in Odessa, Texas (Odessa Facility) from Odessa-Ector Power Partners, L.P., an indirect wholly owned subsidiary of Koch Ag & Energy Solutions, LLC (Koch) (altogether, the Odessa Acquisition). La Frontera paid an aggregate purchase price of approximately $355 million, plus a five-year earn-out provision, to acquire the Odessa Facility. The purchase price was funded by cash on hand.

The Odessa Acquisition was accounted for as an asset acquisition. Substantially all of the approximately $355 million purchase price was assigned to property, plant and equipment in our consolidated balance sheet. Additionally, the initial fair value associated with an earn-out provision of approximately $16 million was included as consideration in the overall purchase price. The earn-out provision requires cash payments to be made to Koch if spark-spreads related to the pricing point of the Odessa Facility exceed certain thresholds. Subsequent to the acquisition, the earn-out provision has been accounted for as a derivative in our consolidated financial statements.

Upton Solar Development (Successor)

In May 2017, we acquired the rights to develop, construct and operate a utility scale solar photovoltaic power generation facility in Upton County, Texas (Upton). As part of this project, we entered a turnkey engineering, procurement and construction agreement to construct the approximately 180 MW facility. For the year ended December 31, 2017, we have spent approximately $190 million related to this project primarily for progress payments under the engineering, procurement and construction agreement and the acquisition of the development rights. We currently estimate that the facility will begin operations in the spring of 2018.

Lamar and Forney Acquisition (Predecessor)

In April 2016, Luminant purchased all of the membership interests in La Frontera, the indirect owner of two combined-cycle gas turbine (CCGT) natural gas fueled generation facilities representing nearly 3,000 MW of capacity located in ERCOT, from a subsidiary of NextEra Energy, Inc. (the Lamar and Forney Acquisition). The aggregate purchase price was approximately $1.313 billion, which included the repayment of approximately $950 million of existing project financing indebtedness of La Frontera at closing, plus approximately $236 million for cash and net working capital. The purchase price was funded by cash-on-hand and additional borrowings under our Predecessor's DIP Facility totaling $1.1 billion. After completing the acquisition, we repaid approximately $230 million of borrowings under our Predecessor's DIP Revolving Credit Facility primarily utilizing cash acquired in the transaction. La Frontera and its subsidiaries were subsidiary guarantors under our Predecessor's DIP Roll Facilities and, on the Effective Date, became subsidiary guarantors under the Vistra Operations Credit Facilities (see Note 12).

Predecessor Purchase Accounting — The Lamar and Forney Acquisition was accounted for in accordance with ASC 805, Business Combinations (ASC 805), with identifiable assets acquired and liabilities assumed recorded at their estimated fair values on the acquisition date.

To fair value the acquired property, plant and equipment, we used a discounted cash flow analysis, classified as Level 3 within the fair value hierarchy levels (see Note 15). This discounted cash flow model was created for each generation facility based on its remaining useful life. The discounted cash flow model included gross margin forecasts for each power generation facility determined using forward commodity market prices obtained from long-term forecasts. We also used management's forecasts of generation output, operations and maintenance expense, SG&A and capital expenditures. The resulting cash flows, estimated based upon the age of the assets, efficiency, location and useful life, were then discounted using plant specific discount rates of approximately 9%.

The following table summarizes the consideration paid and the allocation of the purchase price to the fair value amounts recognized for the assets acquired and liabilities assumed related to the Lamar and Forney Acquisition as of the acquisition date. During the three months ended September 30, 2016, the working capital adjustment included in the purchase price was finalized between the parties, and the purchase price allocation was completed.
Cash paid to seller at close
 
$
603

Net working capital adjustments
 
(4
)
Consideration paid to seller
 
599

Cash paid to repay project financing at close
 
950

Total cash paid related to acquisition
 
$
1,549

Cash and cash equivalents
 
$
210

Property, plant and equipment — net
 
1,316

Commodity and other derivative contractual assets
 
47

Other assets
 
44

Total assets acquired
 
1,617

Commodity and other derivative contractual liabilities
 
53

Trade accounts payable and other liabilities
 
15

Total liabilities assumed
 
68

Identifiable net assets acquired
 
$
1,549



The Lamar and Forney Acquisition did not result in the recording of goodwill since the purchase price did not exceed the fair value of the net assets acquired.

Unaudited Pro Forma Financial Information — The following unaudited pro forma financial information for the Predecessor period from January 1, 2016 through October 2, 2016 and the year ended December 31, 2015 assumes that the Lamar and Forney Acquisition occurred on January 1, 2015. The unaudited pro forma financial information is provided for information purposes only and is not necessarily indicative of the results of operations that would have occurred had the Lamar and Forney Acquisition been completed on January 1, 2015, nor is the unaudited pro forma financial information indicative of future results of operations.
 
Predecessor
 
Period from January 1, 2016
through
October 2, 2016
 
Year Ended
December 31, 2015
Revenues
$
4,116

 
$
6,133

Net income (loss)
$
22,835

 
$
(4,671
)


The unaudited pro forma financial information includes adjustments for incremental depreciation as a result of the fair value determination of the net assets acquired and interest expense on borrowings under our Predecessor's DIP Roll Facilities.
v3.8.0.1
Disposition of Generation Facilities (Notes)
12 Months Ended
Dec. 31, 2017
Retirement of Generation Facilities [Abstract]  
Disposition Of Long-Lived Assets [Text Block]
DISPOSITION OF GENERATION FACILITIES

Retirement of Generation Facilities

Luminant announced plans to retire three power plants with a total installed nameplate generation capacity of approximately 4,167 MW and two lignite mines. The plants were retired in January and February 2018. Luminant decided to retire these units given that they are projected to be uneconomic based on current market conditions and given the significant environmental costs associated with operating such units. In the case of the Sandow units, the decision also reflected the execution of a Settlement Agreement discussed below. The following table details the units retired.
Name
 
Location (all in the state of Texas)
 
Fuel Type
 
Installed Nameplate Generation Capacity (MW)
 
Number of Units
 
Date Units Taken Offline
Monticello
 
Titus County
 
Lignite/Coal
 
1,880

 
3
 
January 4, 2018
Sandow
 
Milam County
 
Lignite
 
1,137

 
2
 
January 11, 2018
Big Brown
 
Freestone County
 
Lignite/Coal
 
1,150

 
2
 
February 12, 2018
Total
 
 
 
 
 
4,167

 
7
 
 


In September and October 2017, we decided to retire our Monticello, Sandow and Big Brown plants and a related mine which supplies the Sandow plants. Management had previously announced its decisions to retire mines which supply the Monticello and Big Brown plants. The Monticello and Sandow plants were retired in January and the Big Brown plant in February 2018. We recorded a charge of approximately $206 million related to the retirements, including employee-related severance costs, non-cash charges for writing off materials inventory and capitalized improvements and changes to the timing and amounts of asset retirement obligations for mining and plant-related reclamation at these facilities. The charge, all of which related to our Asset Closure segment, was recorded to operating costs and impairment of long-lived assets in our statements of consolidated income (loss). In addition, we will continue the ongoing reclamation work at the plants' mines.

In October 2017, the Company and Alcoa entered into a contract termination agreement pursuant to which the parties agreed to an early settlement of a long-standing power and mining agreement. In consideration for the early termination, Alcoa made a payment to Luminant of approximately $238 million in October 2017. In the three months ended December 31, 2017, we recorded a gain related to the impacts of the Settlement Agreement in our consolidated financial statements totaling approximately $11 million, which included the receipt of the cash payment, the acquisition of real property and the incurrence of certain liabilities and asset retirement obligations associated with the real property acquired, along with the elimination of a related electric supply contract intangible asset on our consolidated balance sheet (see Note 7). The contract had been important to the overall economic viability of the Sandow plant.

Regulatory Review — As part of the retirement process, Luminant filed notices with ERCOT, which triggered a reliability review regarding such proposed retirements. In October and November 2017, ERCOT determined the units were not needed for reliability, and the units were taken offline in January and February 2018.

Gas Plant Sales Process

In conjunction with the regulatory review process as part of the Merger Agreement with Dynegy Inc., we are conducting a competitive sales process for our Stryker Creek, Graham and Trinidad plants that would reduce our overall installed generation capacity in the ERCOT market. Pursuant to that sales process, we have classified our Stryker Creek, Graham and Trinidad natural gas generation facilities with a total installed nameplate generation capacity of approximately 1,559 MW as assets held-for sale. At December 31, 2017, these assets totaled $16 million and are included in other current assets in the consolidated balance sheet.

Impairment of Lignite/Coal Fueled Generation and Mining Assets

We evaluated our generation assets for impairment during 2015 as a result of impairment indicators related to the continued decline in forecasted wholesale electricity prices in ERCOT. Our evaluations concluded that impairments existed, and the carrying values at our Big Brown, Martin Lake, Monticello, Sandow 4 and Sandow 5 generation facilities and related mining facilities were reduced in total by $2.541 billion.

Our fair value measurement for these assets was determined based on an income approach that utilized probability-weighted estimates of discounted future cash flows, which were Level 3 fair value measurements (see Note 15). Key inputs into the fair value measurement for these assets included current forecasted wholesale electricity prices in ERCOT, forecasted fuel prices, capital and operating expenditure forecasts and discount rates.
v3.8.0.1
Emergence From Chapter 11 Cases
12 Months Ended
Dec. 31, 2017
Reorganizations [Abstract]  
Chapter 11 Cases
    EMERGENCE FROM CHAPTER 11 CASES

On the Petition Date, EFH Corp. and the substantial majority of its direct and indirect subsidiaries, including EFIH, EFCH and TCEH, but excluding the Oncor Ring-Fenced Entities, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On the Effective Date, the TCEH Debtors and the Contributed EFH Debtors completed their reorganization under the Bankruptcy Code and emerged from the Chapter 11 Cases as subsidiaries of Vistra Energy.

Separation of Vistra Energy from EFH Corp. and its Subsidiaries

Upon the Effective Date, Vistra Energy separated from EFH Corp. pursuant to a tax-free spin-off transaction that was part of a series of transactions that included a taxable component. The taxable portion of the transaction generated a taxable gain that resulted in no regular tax liability due to available net operating loss carryforwards of EFH Corp. The transaction did result in an alternative minimum tax liability estimated to be approximately $14 million payable by EFH Corp. to the IRS. Pursuant to the Tax Matters Agreement, Vistra Energy had an obligation to reimburse EFH Corp. 50% of the estimated alternative minimum tax, and approximately $7 million was reimbursed during the three months ended June 30, 2017. In October 2017, the 2016 federal tax return that included the results of EFCH, EFIH, Oncor Holdings and TCEH was filed with the IRS and resulted in a $3 million payment from EFH Corp. to Vistra Energy. The spin-off transaction resulted in Vistra Energy, including the TCEH Debtors and the Contributed EFH Debtors, no longer being an affiliate of EFH Corp. and its subsidiaries.

Separation Agreement

On the Effective Date, EFH Corp., Vistra Energy and a subsidiary of Vistra Energy entered into a separation agreement that provided for, among other things, the transfer of certain assets and liabilities by EFH Corp., EFCH and TCEH to Vistra Energy. Among other things, EFH Corp., EFCH and/or TCEH, as applicable, (a) transferred the TCEH Debtors and certain contracts and assets (and related liabilities) primarily related to the business of the TCEH Debtors to Vistra Energy, (b) transferred sponsorship of certain employee benefit plans (including related assets), programs and policies to a subsidiary of Vistra Energy and (c) assigned certain employment agreements from EFH Corp. and certain of the Contributed EFH Debtors to a subsidiary of Vistra Energy.

Tax Matters Agreement

On the Effective Date, Vistra Energy and EFH Corp. entered into the Tax Matters Agreement, which provides for the allocation of certain taxes among the parties and for certain rights and obligations related to, among other things, the filing of tax returns, resolutions of tax audits and preserving the tax-free nature of the spin-off.

Settlement Agreement

The Debtors, the Sponsor Group, certain settling TCEH first lien creditors, certain settling TCEH second lien creditors, certain settling TCEH unsecured creditors and the official committee of unsecured creditors of the TCEH Debtors entered into a settlement agreement (the Settlement Agreement) in August 2015 (as amended in September 2015 and approved by the Bankruptcy Court in December 2015) to settle, among other things, (a) intercompany claims among the Debtors, (b) claims and causes of actions against holders of first lien claims against TCEH and the agents under the TCEH Senior Secured Facilities, (c) claims and causes of action against holders of interests in EFH Corp. and certain related entities and (d) claims and causes of action against each of the Debtors' current and former directors, the Sponsor Group, managers and officers and other related entities.

Tax Matters

In July 2016, EFH Corp. received a private letter ruling from the IRS in connection with our emergence from bankruptcy, which provides, among other things, for certain rulings regarding the qualification of (a) the transfer of certain assets and ordinary course operating liabilities to Vistra Energy and (b) the distribution of the equity of Vistra Energy, the cash proceeds from Vistra Energy debt, the cash proceeds from the sale of preferred stock in a newly formed subsidiary of Vistra Energy, and the right to receive payments under a tax receivables agreement, to holders of TCEH first lien claims, as a reorganization qualifying for tax-free treatment.

Pre-Petition Claims

On the Effective Date, the TCEH Debtors (together with the Contributed EFH Debtors) emerged from the Chapter 11 Cases and discharged approximately $33.8 billion in LSTC. Initial distributions related to the allowed claims asserted against the TCEH Debtors and the Contributed EFH Debtors commenced subsequent to the Effective Date. As of December 31, 2017, the TCEH Debtors have approximately $52 million in escrow to (1) distribute to holders of currently contingent and/or disputed unsecured claims that become allowed and/or (2) make further distributions to holders of previously allowed unsecured claims, if applicable. Additionally, the TCEH Debtors have approximately $7 million in escrow to pay remaining professional fees incurred in the Chapter 11 Cases. The remaining contingent and/or disputed claims against the TCEH Debtors consist primarily of unsecured legal claims, including asbestos claims. These remaining claims and the related escrow balance for the claims are recorded in Vistra Energy's consolidated balance sheet as other current liabilities and current restricted cash, respectively. A small number of other disputed, de minimis claims that are asserted as being entitled to priority and/or against the Contributed EFH Debtors, if allowed, will be paid by Vistra Energy, but all non-priority unsecured claims, including asbestos claims arising before the Petition Date, will be satisfied solely from the approximately $52 million in escrow.

Predecessor Reorganization Items

Expenses and income directly associated with the Chapter 11 Cases are reported separately in the statements of consolidated income (loss) as reorganization items as required by ASC 852, Reorganizations. Reorganization items also included adjustments to reflect the carrying value of LSTC at their estimated allowed claim amounts, as such adjustments were determined. The following table presents reorganization items incurred in the Predecessor period from January 1, 2016 through October 2, 2016 and the year ended December 31, 2015, respectively, as reported in the statements of consolidated income (loss):
 
Predecessor
 
Period from January 1, 2016
through
October 2, 2016
 
Year Ended
December 31, 2015
Gain on reorganization adjustments (Note 6)
$
(24,252
)
 
$

Loss from the adoption of fresh start reporting
2,013

 

Expenses related to legal advisory and representation services
55

 
141

Expenses related to other professional consulting and advisory services
39

 
69

Contract claims adjustments
13

 
54

Noncash adjustment for estimated allowed claims related to debt

 
896

Adjustment to affiliate claims pursuant to Settlement Agreement (Note 19)

 
(635
)
Gain on settlement of debt held by affiliates (Note 19)

 
(382
)
Gain on settlement of interest on debt held by affiliates

 
(20
)
Sponsor management agreement settlement

 
(19
)
Contract assumption adjustments

 
(14
)
Fees associated with extension/completion of the DIP Facility

 
9

Other
11

 
2

Total reorganization items
$
(22,121
)
 
$
101

v3.8.0.1
Fresh-Start Reporting (Notes)
12 Months Ended
Dec. 31, 2017
Reorganizations [Abstract]  
Fresh-Start Reporting
FRESH START REPORTING

As of the Effective Date, Vistra Energy applied fresh start reporting under the applicable provisions of ASC 852. In order to apply fresh-start reporting, ASC 852 requires two criteria to be satisfied: (1) that total post­ petition liabilities and allowed claims immediately before the date of confirmation of the Plan of Reorganization be in excess of reorganization value and (2) that holders of our Predecessor's voting shares immediately before confirmation of the Plan receive less than 50% of the voting shares of the emerging entity. Vistra Energy met both criteria. Under ASC 852, application of fresh start reporting is required on the date on which a plan of reorganization is confirmed by a bankruptcy court and all material conditions to the plan of reorganization are satisfied. All material conditions to the Plan of Reorganization were satisfied on the Effective Date, including the execution of the Spin-Off.

Reorganization Value

A third-party valuation specialist submitted a report to the Bankruptcy Court in July 2016 assuming an emergence from bankruptcy as of December 31, 2016. This report provided an estimated value range for the total Vistra Energy enterprise. Management selected an enterprise value within that range of $10.5 billion. The enterprise value submitted by the valuation specialist was based upon:

historical financial information of our Predecessor for recent years and interim periods;
certain internal financial and operating data of our Predecessor;
certain financial, tax and operational forecasts of Vistra Energy;
certain publicly available financial data for comparable companies to the operating business of Vistra Energy;
the Plan of Reorganization and related documents;
certain economic and industry information relevant to the operating business, and
other studies, analyses and inquiries.

The valuation analysis for Vistra Energy included (i) a discounted cash flow calculation and (ii) peer group company analysis. Equal weighting was assigned to the two methodologies, before adding the value of the tax basis step-up resulting from certain transactions pursuant to the Plan of Reorganization, which was valued separately. The estimated future cash flows included annual forecasts through 2021. A terminal value was included in the discounted cash flow calculation using an exit multiple approach based on the cash flows of the final year of the forecast period.

The valuation analysis used a discount rate of approximately 7%. The determination of the discount rate takes into consideration the capital structure, credit ratings and current debt yields of comparable publicly traded companies as well as an estimate of return on equity that reflects historical market returns and current market volatility for the industry.

Although the Company believes the assumptions and estimates used by the valuation specialist to develop the enterprise value are reasonable and appropriate, different assumption and estimates could materially impact the analysis and resulting conclusions.

Under ASC 852, reorganization value is generally allocated, first, to identifiable tangible assets, identifiable intangible assets and liabilities, then any remaining excess reorganization value is allocated to goodwill. Vistra Energy estimates its reorganization value of assets at approximately $15.161 billion as of October 3, 2016, which consists of the following:
Business enterprise value
$
10,500

Cash excluded from business enterprise value
1,594

Deferred asset related to prepaid capital lease obligation
38

Current liabilities, excluding short-term portion of debt and capital leases
1,123

Noncurrent, non-interest bearing liabilities
1,906

Vistra Energy reorganization value of assets
$
15,161


Consolidated Balance Sheet

The adjustments to TCEH's October 3, 2016 consolidated balance sheet below include the impacts of the Plan of Reorganization and the adoption of fresh start reporting.
 
October 3, 2016
 
TCEH (Predecessor) (1)
 
Reorganization
Adjustments (2)
 
Fresh Start
Adjustments
 
Vistra Energy (Successor)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,829

 
$
(1,028
)
 
(3)
 
$

 
 
 
$
801

Restricted cash
12

 
131

 
(4)
 

 
 
 
143

Trade accounts receivable — net
750

 
4

 
 
 

 
 
 
754

Advances to parents and affiliates of Predecessor
78

 
(78
)
 
 
 

 
 
 

Inventories
374

 

 
 
 
(86
)
 
(17)
 
288

Commodity and other derivative contractual assets
255

 

 
 
 

 
 
 
255

Margin deposits related to commodity contracts
42

 

 
 
 

 
 
 
42

Other current assets
47

 
17

 
 
 
3

 
 
 
67

Total current assets
3,387

 
(954
)
 
 
 
(83
)
 
 
 
2,350

Restricted cash
650

 

 
 
 

 
 
 
650

Advance to parent and affiliates of Predecessor
17

 
(21
)
 
 
 
4

 
 
 

Investments
1,038

 
1

 
 
 
9

 
(18)
 
1,048

Property, plant and equipment — net
10,359

 
53

 
 
 
(5,970
)
 
(19)
 
4,442

Goodwill
152

 

 
 
 
1,755

 
(27)
 
1,907

Identifiable intangible assets — net
1,148

 
4

 
 
 
2,256

 
(20)
 
3,408

Commodity and other derivative contractual assets
73

 

 
 
 
(14
)
 
 
 
59

Deferred income taxes

 
320

 
(5)
 
730

 
(21)
 
1,050

Other noncurrent assets
51

 
38

 
 
 
158

 
(22)
 
247

Total assets
$
16,875

 
$
(559
)
 
 
 
$
(1,155
)
 
 
 
$
15,161

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt due currently
$
4

 
$
5

 
 
 
$
(1
)
 
 
 
$
8

Trade accounts payable
402

 
145

 
(6)
 
3

 
 
 
550

Trade accounts and other payables to affiliates of Predecessor
152

 
(152
)
 
(6)
 

 
 
 

Commodity and other derivative contractual liabilities
125

 

 
 
 

 
 
 
125

Margin deposits related to commodity contracts
64

 

 
 
 

 
 
 
64

Accrued income taxes
12

 
12

 
 
 

 
 
 
24

Accrued taxes other than income
119

 
4

 
 
 

 
 
 
123

Accrued interest
110

 
(109
)
 
(7)
 

 
 
 
1

Other current liabilities
243

 
170

 
(8)
 
5

 
 
 
418

Total current liabilities
1,231

 
75

 
 
 
7

 
 
 
1,313

 
October 3, 2016
 
TCEH (Predecessor) (1)
 
Reorganization
Adjustments (2)
 
Fresh Start
Adjustments
 
Vistra Energy (Successor)
Long-term debt, less amounts due currently

 
3,476

 
(9)
 
151

 
(23)
 
3,627

Borrowings under debtor-in-possession credit facilities
3,387

 
(3,387
)
 
(9)
 

 
 
 

Liabilities subject to compromise
33,749

 
(33,749
)
 
(10)
 

 
 
 

Commodity and other derivative contractual liabilities
5

 

 
 
 
3

 
 
 
8

Deferred income taxes
256

 
(256
)
 
(11)
 

 
 
 

Tax Receivable Agreement obligation

 
574

 
(12)
 

 
 
 
574

Asset retirement obligations
809

 

 
 
 
854

 
(24)
 
1,663

Other noncurrent liabilities and deferred credits
1,018

 
117

 
(13)
 
(900
)
 
(25)
 
235

Total liabilities
40,455

 
(33,150
)
 
 
 
115

 
 
 
7,420

Equity:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 
4

 
(14)
 

 
 
 
4

Additional paid-in-capital

 
7,737

 
(15)
 

 
 
 
7,737

Accumulated other comprehensive income (loss)
(32
)
 
22

 
 
 
10

 
(26)
 

Predecessor membership interests
(23,548
)
 
24,828

 
(16)
 
(1,280
)
 
(26)
 

Total equity
(23,580
)
 
32,591

 
 
 
(1,270
)
 
 
 
7,741

Total liabilities and equity
$
16,875

 
$
(559
)
 
 
 
$
(1,155
)
 
 
 
$
15,161


(1)
Represents the consolidated balance sheet of TCEH as of October 3, 2016.

Reorganization adjustments

(2)
Includes the addition of certain assets and liabilities associated with the Contributed EFH Entities. Also includes EFH Corp.'s contribution of liabilities associated with certain employee benefit plans to Vistra Energy.

(3)
Net adjustments to cash, which represent distributions made or funding provided to an escrow account, classified as restricted cash, under the Plan of Reorganization, as follows:
Sources (uses):
 
Net proceeds from PrefCo preferred stock sale
$
69

Addition of cash balances from the Contributed EFH Debtors
22

Payments to TCEH first lien creditors, including adequate protection
(486
)
Payment to TCEH unsecured creditors (including $73 million to escrow)
(502
)
Payment of administrative claims to TCEH creditors
(53
)
Payment of legal fees, professional fees and other costs (including $52 million to escrow)
(78
)
Net use of cash
$
(1,028
)


(4)
Increase in restricted cash primarily reflects amounts placed in escrow to satisfy certain secured claims, unsecured claims and professional fee obligations associated with the bankruptcy.

(5)
Reflects the deferred income tax impact of the Plan of Reorganization implementation, including cancellation of debts and adjustment of tax-basis for certain assets of PrefCo that issued mandatorily redeemable preferred stock as part of the Spin-Off.

(6)
Primarily reflects the reclassification of transmission and distribution service payables to Oncor from payables with affiliates to trade payables with third parties pursuant to the separation of Vistra Energy from EFH Corp. and payment of accrued professional fees and unsecured claimant obligations incurred in conjunction with Emergence.

(7)
Primarily reflects the payment of accrued interest and adequate protection to the TCEH first lien creditors on the Effective Date.

(8)
Primarily reflects the following:

Reclassification of $82 million from LSTC related to secured and unsecured claims and $16 million in accrued professional fees from accounts payable to other current liabilities.

Additional accruals for $23 million of change-in-control obligations and $26 million in success fees triggered by Emergence, $7 million in professional fees, and $28 million of accrued liabilities related to the Contributed EFH Entities.

Payment of $12 million in professional fees.

(9)
Reflects the conversion of the TCEH DIP Roll Facilities of $3.387 billion to the Vistra Operations Credit Facilities at Emergence, the issuance and sale of mandatorily redeemable preferred stock of PrefCo for $70 million, and the obligation related to a corporate office space lease contributed to Vistra Energy pursuant to the Plan of Reorganization. See Note 12 for additional details.

(10)
Reflects the elimination of TCEH's liabilities subject to compromise pursuant to the Plan of Reorganization (see Note 5). Liabilities subject to compromise were settled as follows in accordance with the Plan of Reorganization:
Notes, loans and other debt
$
31,668

Accrued interest on notes, loans and other debt
646

Net liability under terminated TCEH interest rate swap and natural gas hedging agreements
1,243

Trade accounts payable and other expected allowed claims
192

Third-party liabilities subject to compromise
33,749

LSTC from the Contributed EFH Entities
8

Total liabilities subject to compromise
33,757

Fair value of equity issued to TCEH first lien creditors
(7,741
)
TRA Rights issued to TCEH first lien creditors
(574
)
Cash distributed and accruals for TCEH first lien creditors
(377
)
Cash distributed for TCEH unsecured claims
(502
)
Cash distributed and accruals for TCEH administrative claims
(60
)
Settlement of affiliate balances
(99
)
Net liabilities of contributed entities and other items
(60
)
Gain on extinguishment of LSTC
$
24,344



(11)
Reflects the deferred income tax impact of the Plan of Reorganization implementation, including cancellation of debts and adjustment of tax basis of certain assets of PrefCo.

(12)
Reflects the estimated present value of the TRA obligation. See Note 9 for further discussion of the TRA obligation valuation assumptions.

(13)
Primarily reflects the following:

Addition of $122 million in liabilities primarily related to benefit plan obligations associated with a pension plan and a health and welfare plan assumed by Vistra Energy pursuant to the Plan of Reorganization. See Note 17 for further discussion of the benefit plan obligations.

Payment of $7 million in settlements related to split life insurance costs with a prior affiliate entity.

(14)
Reflects the issuance of approximately 427,500,000 shares of Vistra Energy common stock, par value of $0.01 per share, to the TCEH first lien creditors. See Note 14.

(15)
Reflects adjustments to present Vistra Energy equity value at approximately $7.741 billion based on a reconciliation from the $10.5 billion enterprise value described above under Reorganization Value as depicted below:
Enterprise value
$
10,500

Vistra Operations Credit Facility – Initial Term Loan B Facility
(2,871
)
Vistra Operations Credit Facility – Term Loan C Facility
(655
)
Accrual for post-Emergence claims satisfaction
(181
)
Tax Receivable Agreement obligation
(574
)
Preferred stock of PrefCo
(70
)
Other items
(2
)
Cash and cash equivalents
801

Restricted cash
793

Equity value at Emergence
$
7,741

Common stock at par value
$
4

Additional paid-in capital
7,737

Equity value
$
7,741

Shares outstanding at October 3, 2016 (in millions)
427.5

Per share value
$
18.11



(16)
Membership Interest impact of Plan of Reorganization are shown below:
Gain on extinguishment of LSTC
$
24,344

Elimination of accumulated other comprehensive income
(22
)
Change in control payments
(23
)
Professional fees
(33
)
Other items
(14
)
Pretax gain on reorganization adjustments (Note 5)
24,252

Deferred tax impact of the Plan of Reorganization and Spin-off
576

Total impact to membership interests
$
24,828



Fresh start adjustments

(17)
Reflects the reduction of inventory to fair value, including (1) adjustment of fuel inventory to current market prices, and (2) an adjustment to the fair value of materials and supplies inventory primarily used in our lignite/coal-fueled generation assets and related mining operations.

(18)
Reflects the $12 million increase in the fair value of certain real property assets and $3 million reduction of the fair value for other investments.

(19)
Reflects the change in fair value of property, plant and equipment related primarily to generation and mining assets as detailed below:
Property, Plant and Equipment
Adjustment
Fair Value
Generation plants and mining assets
$
(6,057
)
$
3,698

Land
140

490

Nuclear Fuel
(23
)
157

Other equipment
(30
)
97

Total
$
(5,970
)
$
4,442


We engaged a third-party valuation specialist to assist in preparing the values for our property, plant and equipment. For our generation plants and related mining assets, an income approach was utilized in valuing those assets based on discounted cash flow models that forecast the cash flows of the related assets over their respective useful lives. Significant estimates and assumptions utilized in those models include (1) long-term wholesale power price forecasts, (2) fuel cost forecasts, (3) expected generation volumes based on prevailing forecasts and expected maintenance outages, (4) operations and maintenance costs, (5) capital expenditure forecasts and (6) risk adjusted discount rates based on the cash flows produced by the specific generation asset. The fair value of the generation plants and mining assets is based upon Level 3 inputs utilized in the income approach.

The fair value estimates for land and nuclear fuel utilized the market approach, which included utilizing recent comparable sales information and current market conditions for similarly situated land. Nuclear fuel values were determined by utilizing market pricing information for uranium. The fair value of land and nuclear fuel are based upon Level 3 inputs.

(20)
Reflects the adjustment in fair value of $2.256 billion to identifiable intangible assets, including $1.636 billion increase related to retail customer relationships, $270 million increase related to the retail trade name, $190 million increase related to an electricity supply contract, $164 million increase related to retail and wholesale contracts and $4 million decrease related to other intangible assets (see Note 7).

Also reflects the reduction of fair value of $476 million to identifiable intangible liabilities, including a reduction of $525 million related to an electricity supply contract and an increase of $49 million to wholesale contracts.

(21)
Reflects the deferred income tax impact of fresh-start adjustments to property, plant, and equipment, inventory, intangibles and debt issuance costs.

(22)
Primarily reflects the following:

Addition of $197 million regulatory asset related to the deficiency of the nuclear decommissioning trust investment as compared to the nuclear generation plant retirement obligation. Pursuant to Texas regulatory provisions, the trust fund for decommissioning our nuclear generation facility is funded by a fee surcharge billed to REPs by Oncor, as a collection agent, and remitted monthly to Vistra Energy.

Adjustment to remove $26 million of unamortized debt issuance costs to reflect the Vistra Operations Credit Facilities at fair market value.

(23)
Reflects the increase in fair value of the Vistra Operations Credit Facilities in the amount of $151 million based on the quoted market prices of the facilities.

(24)
Increase in fair value of asset retirement obligation related to the plant retirement, mining and reclamation retirement, and coal combustion residuals. See Note 21 for further discussion of our asset retirement obligations.

(25)
Reflects the following:

Reduction in fair value of unfavorable contracts related to wholesale contracts and a portion of an electricity supply contract in the amount of $476 million. See footnote (20) above for further detail.

Reduction of $465 million related to reduction in liability that represented excess amounts in the nuclear decommissioning trust above the carrying value of the asset retirement obligation related to our nuclear generation plant decommissioning.

Increase in fair value of obligations related to leased property in the amount of $29 million.

Increase in fair value of Pension and OPEB obligations in the amount of $12 million.

(26)
Reflects the extinguishment of Predecessor membership interest and accumulated other comprehensive loss per the Plan of Reorganization.

(27)
Reflects increase in goodwill balance to present final goodwill as the reorganization value in excess of the identifiable tangible assets, intangible assets, and liabilities at Emergence.
Business enterprise value
$
10,500

Add: Fair value of liabilities excluded from enterprise value
3,030

Less: Fair value of tangible assets
(8,215
)
Less: Fair value of identified intangible assets
(3,408
)
Vistra Energy goodwill
$
1,907

v3.8.0.1
(Goodwill And Identifiable Intangible Assets) (Notes)
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill And Identifiable Intangible Assets
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

Goodwill

The carrying value of goodwill totaled $1.907 billion at both December 31, 2017 and 2016. The goodwill arose in connection with our application of fresh start reporting at Emergence and was allocated entirely to the Retail Electricity reporting unit (see Note 1). Of the goodwill recorded at Emergence, $1.686 billion is deductible for tax purposes over 15 years on a straight-line basis.

Goodwill and intangible assets with indefinite useful lives are required to be evaluated for impairment at least annually or whenever events or changes in circumstances indicate an impairment may exist. As of the Effective Date, we have selected October 1 as our annual goodwill test date. On the most recent goodwill testing date, we applied qualitative factors and determined that it was more likely than not that the fair value of the Retail Electricity reporting unit exceeded its carrying value at October 1, 2017. Significant qualitative factors evaluated included reporting unit financial performance and market multiples, cost factors, customer attrition, interest rates and changes in reporting unit book value.

Predecessor Goodwill Impairments

During the fourth quarter of 2015, our Predecessor performed a goodwill impairment analysis as of its annual testing date of December 1. Further, during the fourth quarter of 2015, there were significant declines in the market values of several similarly situated peer companies with publicly traded equity, which indicated our Predecessor's overall enterprise value should be reassessed. Our Predecessor's testing resulted in an impairment of goodwill of $800 million at December 1, 2015.

During the first nine months of 2015, our Predecessor experienced impairment indicators related to decreases in forward wholesale electricity prices when compared to those prices reflected in its December 1, 2014 goodwill impairment testing analysis. As a result, the likelihood of goodwill impairments had increased, and our Predecessor initiated further testing of goodwill. Our Predecessor's testing of goodwill for impairment during the first nine months of 2015 resulted in impairment charges totaling $1.4 billion.

Identifiable Intangible Assets

Identifiable intangible assets are comprised of the following:
 
 
December 31, 2017
 
December 31, 2016
Identifiable Intangible Asset
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Retail customer relationship
 
$
1,648

 
$
572

 
$
1,076

 
$
1,648

 
$
152

 
$
1,496

Software and other technology-related assets
 
183

 
47

 
136

 
147

 
9

 
138

Electricity supply contract (a)
 

 

 

 
190

 
2

 
188

Retail and wholesale contracts
 
154

 
87

 
67

 
164

 
38

 
126

Other identifiable intangible assets (b)
 
33

 
11

 
22

 
30

 
2

 
28

Total identifiable intangible assets subject to amortization
 
$
2,018

 
$
717

 
1,301

 
$
2,179

 
$
203

 
1,976

Retail trade names (not subject to amortization)
 
 
 
 
 
1,225

 
 
 
 
 
1,225

Mineral interests (not currently subject to amortization)
 
 
 
 
 
4

 
 
 
 
 
4

Total identifiable intangible assets
 
 
 
 
 
$
2,530

 
 
 
 
 
$
3,205


____________
(a)
Contract terminated in October 2017. See Note 4.
(b)
Includes mining development costs and environmental allowances and credits.

Amortization expense related to finite-lived identifiable intangible assets (including the classification in the statements of consolidated income (loss)) consisted of:
 
 
 
 
 
 
Successor
 
 
Predecessor
Identifiable Intangible Asset
 
Statements of Consolidated Income (Loss) Line
 
Remaining useful lives at
December 31,
2017 (weighted average in years)
 
Year Ended
December 31, 2017
 
Period from October 3, 2016
through
December 31, 2016
 
 
Period from January 1, 2016
through
October 2, 2016
 
Year Ended
December 31, 2015
Retail customer relationship
 
Depreciation and amortization
 
4
 
$
420

 
$
152

 
 
$
9

 
$
17

Software and other technology-related assets
 
Depreciation and amortization