TransAlta Corporation (“TransAlta” or the
“Company”) (TSX: TA) (NYSE: TAC) today reported its financial
results for the three and six months ended June 30, 2024,
demonstrating strong financial performance and reaffirming its 2024
outlook.
Second Quarter 2024 Financial
Highlights
TransAlta’s second quarter results exceeded
expectations and delivered strong free cash flow and solid
operating performance. The Company delivered Free Cash Flow
("FCF")(1) per share of $0.57, which was firmly supported by its
hedging and asset optimization strategies given the expected
decline in Alberta spot power prices year over year, milder
weather, lower natural gas prices and incremental generation from
the addition of new natural gas, wind and solar supply in the
market. Highlights for the quarter include:
- Adjusted
EBITDA(1) of $312 million, compared to $387 million for the same
period in 2023
- Strong
operational adjusted availability of 90.8 per cent, up from 84.6
per cent during the same period in 2023
- FCF of $172
million or $0.57 per share, compared to $278 million or $1.05 per
share for the same period in 2023
- Earnings before
income taxes of $94 million, compared to $79 million for the same
period in 2023
- Net earnings
attributable to common shareholders of $56 million or $0.18 per
share, compared to $62 million or $0.23 per share for the same
period in 2023
- Cash flow from
operating activities of $108 million, an increase of $97 million
for the same period in 2023
- The return of
$89 million of capital to shareholders during the six months ended
June 30, 2024, through the buyback of 9.5 million common shares
constituting 59 per cent of the Company's 2024 enhanced share
repurchase program of up to $150 million
Other Business Highlights and Updates
- Achieved
commercial operation of the 200 MW White Rock East wind facility on
April 22, 2024 and the 200 MW Horizon Hill wind facility on May 21,
2024, increasing the Company's renewables fleet in the US to over 1
GW
- Entered into an
additional 10-year transfer agreement on June 21, 2024, with an A+
rated customer for the sale of the remaining 20 per cent of the
expected production tax credits ("PTCs") to be generated from the
White Rock and Horizon Hill wind facilities
- Welcomed Joel
Hunter as Executive Vice President, Finance and Chief Financial
Officer ("CFO") effective July 1, 2024, following the retirement of
Todd Stack effective June 30, 2024
"Our strong second quarter results demonstrate
the value of our portfolio management and market forecasting
capabilities. In response to the evolving market conditions in
Alberta, we proactively deployed hedging strategies to enhance
portfolio margins and moderate the impact of the known supply
additions and weakening price environment in Alberta. Given our
portfolio position, we are confident that we will reach our 2024
guidance given our exceptional performance in the first half of the
year," said John Kousinioris, President and Chief Executive Officer
of TransAlta.
"We continue to believe that our strong free
cash flow results during the first half of the year, and our
expectations for the balance of 2024, are not reflected in the
current trading price of our common shares. As a result, we will
continue to use share repurchases as part of our capital allocation
strategy. We have completed $89 million of share repurchases so far
this year, which is approximately 59 per cent of our $150 million
share repurchase target or $0.29 per share in shareholder
value."
"Our capital allocation decisions will continue
to be balanced and focused on enhancing shareholder value. We are
seeing considerable opportunities to support the energy transition
in our core jurisdictions, particularly at our legacy thermal
sites, where we are actively pursuing redevelopment and
recontracting opportunities for the benefit of our shareholders,"
added Mr. Kousinioris.
Key Business Developments
Appointment of New CFO
On June 30, 2024, Todd Stack, the former
Executive Vice President, Finance and CFO retired from the Company.
The Board of Directors expresses its deep appreciation to Todd for
his contributions to TransAlta and its success during his 34-year
career with the Company.
Joel Hunter was appointed Executive Vice
President, Finance and Chief Financial Officer of the Company
effective July 1, 2024.
Normal Course Issuer Bid ("NCIB") and Automatic Share
Purchase Plan ("ASPP")
TransAlta is committed to enhancing shareholder
returns through appropriate capital allocation such as share
buybacks and its quarterly dividend. The Company previously
announced an enhanced common share repurchase program for 2024 of
up to $150 million, targeting up to 42 per cent of 2024 FCF
guidance to be returned to shareholders in the form of share
repurchases and dividends.
On May 27, 2024, the Company announced that it
had received approval from the Toronto Stock Exchange to purchase
up to a maximum of 14 million common shares during the 12-month
period that commenced May 31, 2024 and terminates May 31, 2025. Any
common shares purchased under the NCIB will be cancelled.
On June 21, 2024, the Company entered into an
ASPP to facilitate repurchases of TransAlta's common shares under
its NCIB. Under the ASPP, the Company’s broker may purchase common
shares from the effective date of the ASPP until the termination of
the ASPP. All purchases of common shares made under the ASPP will
be included in determining the number of common shares purchased
under the NCIB. The ASPP will terminate on the earliest of: (a)
Aug. 6, 2024; (b) the date on which the maximum purchase limits
under the ASPP are reached; or (c) the date on which the Company
terminates the ASPP in accordance with its terms.
During the six months ended June 30, 2024, the
Company purchased and cancelled a total of 9,537,200 common shares,
at an average price of $9.54 per common share, for a total cost of
$91 million, including tax on share buybacks.
Production Tax Credit ("PTC")
Sale Agreements
On Feb. 22, 2024, the Company entered into a
10-year transfer agreement with an AA- rated customer for the sale
of approximately 80 per cent of the expected PTCs to be generated
from the White Rock and the Horizon Hill wind facilities.
On June 21, 2024, the Company entered into an
additional 10-year transfer agreement with an A+ rated customer for
sale of the remaining 20 per cent of the expected PTCs.
The expected annual average EBITDA from the two
agreements is approximately $78 million (US$57 million).
Horizon Hill Wind Facility Achieved Commercial
Operation
On May 21, 2024, the 200 MW Horizon Hill wind
facility achieved commercial operation. The facility is located in
Logan County, Oklahoma and is fully contracted to Meta for the
offtake of 100 per cent of the generation.
White Rock Wind Facilities Achieved Commercial
Operation
On Jan. 1, 2024, the 100 MW White Rock West wind
facility achieved commercial operation. On April 22, 2024, the 200
MW White Rock East wind facility was also commissioned. The
facilities are located in Caddo County, Oklahoma and are contracted
under two long-term PPAs with Amazon for the offtake of 100 per
cent of the generation from the facilities.
Bow River Basin Memorandum of Understanding
On April 19, 2024, the Company announced it had
signed a voluntary water-sharing memorandum of understanding with
over thirty other water licence holders in the Bow River Basin. The
Government of Alberta continues to anticipate and prepare for lower
water conditions this summer with specific concerns in southern
Alberta where agriculture could be impacted by water shortages. The
Government of Alberta is leading efforts to coordinate water usage
among water licence holders for Alberta river basins in an effort
to ensure licensees get the water they need as opposed to the water
to which they are entitled. In recognition of the unique role the
Company plays in managing water flows while also serving as a key
provider to Alberta's electricity grid, we look forward to working
with the Government and downstream stakeholders to maximize water
storage in the early season to help mitigate any anticipated
drought conditions. We anticipate the Company's water management
efforts will not have an adverse impact on our electricity
generating and environmental objectives.
Annual Shareholder Meeting
The Honourable Rona Ambrose did not stand for
re-election and retired from the Board following the annual
shareholder meeting on April 25, 2024. At the annual shareholder
meeting, the Company received strong support on all items of
business, including the election of 12 directors, the reappointment
of auditors and the Company's approach to executive
compensation.
Mount Keith 132kV Expansion Complete
The Mount Keith 132kV expansion project was
completed during the first quarter of 2024. The expansion was
developed under the existing PPA with BHP Nickel West ("BHP"),
which has a term of 15 years. The expansion will facilitate the
connection of additional generating capacity to the transmission
network which supports BHP's operations and increases its
competitiveness as a supplier of low-carbon nickel.
Second Quarter 2024 Highlights
$ millions, unless otherwise
stated |
Three months ended |
Six months ended |
June 30, 2024 |
June 30, 2023 |
June 30, 2024 |
June 30, 2023 |
Operational information |
|
|
|
|
Adjusted availability (%) |
90.8 |
84.6 |
91.5 |
88.2 |
Production (GWh) |
4,781 |
4,596 |
10,959 |
10,568 |
Select financial
information |
|
|
|
|
Revenues |
582 |
625 |
1,529 |
1,714 |
Adjusted EBITDA(1) |
312 |
387 |
643 |
890 |
Earnings before income taxes |
94 |
79 |
361 |
462 |
Net earnings attributable to common shareholders |
56 |
62 |
278 |
356 |
Cash
flows |
|
|
|
|
Cash flow from operating activities |
108 |
11 |
352 |
473 |
Funds from operations(1) |
231 |
391 |
473 |
765 |
Free cash flow(1) |
172 |
278 |
381 |
541 |
Per
share |
|
|
|
|
Net earnings per share attributable to common shareholders, basic
and diluted |
0.18 |
0.23 |
0.91 |
1.34 |
Funds from operations per share(1),(2) |
0.76 |
1.48 |
1.55 |
2.88 |
FCF per share(1),(2) |
0.57 |
1.05 |
1.25 |
2.03 |
Weighted average number of common shares outstanding |
303 |
264 |
306 |
266 |
Segmented Financial Performance
$ millions |
Three months ended |
Six months ended |
June 30, 2024 |
June 30, 2023 |
June 30, 2024 |
June 30, 2023 |
Hydro |
83 |
|
147 |
|
170 |
|
253 |
|
Wind and Solar |
88 |
|
50 |
|
177 |
|
138 |
|
Gas |
146 |
|
166 |
|
280 |
|
406 |
|
Energy Transition |
3 |
|
13 |
|
29 |
|
67 |
|
Energy Marketing |
30 |
|
43 |
|
50 |
|
82 |
|
Corporate |
(38 |
) |
(32 |
) |
(63 |
) |
(56 |
) |
Total adjusted EBITDA |
312 |
|
387 |
|
643 |
|
890 |
|
Earnings before income
taxes |
94 |
|
79 |
|
361 |
|
462 |
|
Second Quarter 2024 Financial Results
Summary
The Company has demonstrated strong financial
and operational performance during the three and six months ended
June 30, 2024 and is on track to meet its 2024 Outlook, due to
active management of the Company's merchant portfolio and hedging
strategies, the commercial operation of the White Rock and Horizon
Hill wind facilities and the Northern Goldfields solar facilities
and higher production from the Gas segment. For the period, the
Company settled a higher volume of hedges at prices that were
significantly above the spot market.
Total production for the three and six months
ended June 30, 2024, was 4,781 GWh and 10,959 GWh compared to 4,596
GWh and 10,568 GWh, respectively, for the same periods in 2023. The
increase of 4 per cent, or 185 GWh and 391 MWh, respectively, was
primarily due to:
- Higher
production of 640 GWh and 941 GWh, or 75 per cent and 46 per cent,
respectively, from the Wind and Solar segment, driven primarily by
production from new facilities, including the Horizon Hill facility
commissioned in May 2024, the White Rock West and East wind
facilities commissioned in January and April 2024, respectively,
and the Garden Plain wind facility commissioned in August
2023;
- The return to
service of the Kent Hills wind facilities, completed in the first
quarter of 2024;
- A higher wind
resource in Alberta; and
- Higher
production from the Gas segment, primarily driven by lower planned
outages at the Alberta gas assets. In addition, market conditions
in the Ontario wholesale power market were favourable which enabled
higher dispatch at the Sarnia facility and resulted in higher
merchant production to the Ontario grid; partially offset by
- Lower production
from the Energy Transition segment, which was negatively impacted
by increased economic dispatch at the Centralia facility due to
lower market prices compared to prior periods and higher planned
and unplanned outage hours.
Production for the renewables fleet for the
three and six months ended June 30, 2024, increased by 450 GWh and
796 GWh, or 31 per cent and 27 per cent, respectively, compared to
the same periods in 2023, driven primarily by:
- The reasons
discussed above; partially offset by
- Lower energy
production at Hydro, which was due to the optimization of water
supply to facilitate generation during the higher anticipated
demand periods of summer and winter in 2024, compared to the higher
pricing experienced in 2023, which promoted higher production
during the same period in the prior year.
Adjusted availability for the three and six
months ended June 30, 2024, was 90.8 per cent and 91.5 per cent,
respectively, an increase of 7 per cent and 4 per cent,
respectively, compared to the same periods in 2023. The increase in
the three months ended 2024 was primarily due to:
- Lower planned
and unplanned outages at Sheerness Unit 1 and Keephills Unit 3 and
lower derates at Sundance Unit 6 in the Gas segment; and
- The return to
service of the Kent Hills wind facilities; partially offset
by
- Planned major
maintenance outages in the Hydro segment.
The higher adjusted availability for the six
months ended June 30, 2024, further benefited from:
- Lower unplanned
outages in the Wind and Solar segment; partially offset by
- Higher planned
and unplanned outages at Centralia Unit 2 in the Energy Transition
segment.
Adjusted EBITDA for the three and six months ended June 30,
2024, was $312 million and $643 million, respectively, as compared
to $387 million and $890 million, respectively, in 2023, a decrease
of $75 million and $247 million, or 19 per cent and 28 per cent,
respectively. The major factors impacting adjusted EBITDA are
summarized below:
- Hydro adjusted
EBITDA for the three and six months ended June 30, 2024, decreased
by $64 million and $83 million, or 44 per cent and 33 per cent,
respectively, compared to the same periods in 2023, primarily due
to:
- Lower power and
ancillary services prices in the Alberta market resulting from the
anticipated increased supply of new renewable and lower-cost
dispatchable gas facilities in the province; and
- Lower energy
production due to the optimization of water supply to facilitate
generation during the higher demand periods in 2024; partially
offset by
- Higher volume of
favourable hedging positions settled;
- Higher
environmental and tax attribute revenue due to the increased sales
of emission credits to third parties and intercompany sales to the
Gas segment; and
- Higher ancillary
services volumes due to increased demand by the AESO.
- Wind and Solar
adjusted EBITDA for the three and six months ended June 30, 2024,
increased by $38 million and $39 million, or 76 per cent and 28 per
cent, respectively, compared to the same periods in 2023, primarily
due to:
- Commercial
operation of the White Rock and Horizon Hill wind facilities and
the Northern Goldfields solar facilities;
- Higher
environmental and tax attribute revenue due to the commencement of
the recently announced sales agreements to transfer production tax
credits from the Oklahoma facilities to taxable US
counterparties;
- Higher
production from the return to service of the Kent Hills wind
facilities; and
- Stronger wind
resource in Alberta in the second quarter; partially offset by
- Lower realized
power prices in the Alberta market resulting from the anticipated
increased supply of new renewable and lower-cost dispatchable gas
facilities in the province; and
- Higher OM&A
related to the addition of the Garden Plain, White Rock and Horizon
Hill wind facilities and the Northern Goldfields solar facilities,
salary escalations, higher insurance costs and long-term service
agreement escalations.
- Gas adjusted
EBITDA for the three and six months ended June 30, 2024, decreased
by $20 million and $126 million, or 12 per cent and 31 per cent,
respectively, compared to the same periods in 2023, although
results were broadly in line with expectations. The decrease was
primarily due to:
- Lower power and
ancillary services prices from the Alberta merchant fleet;
- An increase in
the carbon price from $65 per tonne to $80 per tonne,
impacting gross margin from our Canadian gas assets;
- Higher fuel and
purchased power from higher production; and
- Lower capacity
payments in 2024 for Southern Cross Energy in Australia due to the
scheduled conclusion on Dec. 31, 2023 of the demand capacity charge
under the customer contract, partially offset by the commencement
in March 2024 of capacity payments for the Mount Keith 132kV
expansion; partially offset by
- Higher volume of
favourable hedging positions settled, which generated positive
contributions over settled spot prices;
- Lower planned
outages in Alberta;
- Lower natural
gas prices;
- The utilization
of emission credits to settle a portion of our 2023 GHG obligation;
and
- Lower OM&A
expenses mainly due to the timing of when maintenance has been
performed.
- Energy
Transition adjusted EBITDA for the three and six months ended June
30, 2024, decreased by $10 million and $38 million, or 77 per cent
and 57 per cent, respectively, compared to the same periods in
2023, primarily due to:
- Increased
economic dispatch due to lower market prices which negatively
impacted production; partially offset by
- Lower fuel costs
due to lower production volumes.
- Energy Marketing
adjusted EBITDA for the three and six months ended June 30, 2024,
decreased by $13 million and $32 million, or 30 per cent and 39 per
cent, respectively, compared to the same periods in 2023, primarily
due to:
- Lower realized
settled trades in the first and second quarters of 2024 in
comparison to the prior periods.
- Corporate
adjusted EBITDA for the three and six months ended June 30, 2024,
decreased by $6 million and $7 million, or 19 percent and 13 per
cent, respectively, compared to the same periods in 2023, primarily
due to:
- Increased
spending to support strategic and growth initiatives.
FCF for the three and six months ended June 30,
2024 decreased by $106 million and $160 million, respectively, or
38 per cent and 30 per cent, compared with the same periods in
2023. The major factors impacting free cash flow were:
- Lower adjusted
EBITDA items as noted above;
- Higher current
income tax expense due to the non-capital loss carryforwards being
fully utilized in 2023;
- Higher net
interest expense due to lower capitalized interest and lower
interest income; and
- Lower
distributions paid to subsidiaries' non-controlling interests
relating to lower TA Cogen net earnings resulting from lower
merchant pricing in the Alberta market and the cessation of
distributions by TransAlta Renewables Inc.
Cash from operating activities for the three
months ended June 30, 2024 of $108 million increased by $97 million
compared to the same period in 2023, primarily due to:
- A favourable
change in non-cash operating working capital balances on lower
accounts receivable from lower revenues and higher collateral
received related to derivative instruments; partially offset
by
- Lower gross
margin on lower revenues net of unrealized gains from risk
management activities; and
- Lower accounts
payable and accrued liabilities and higher collateral provided as a
result of market price volatility.
Cash from operating activities for the six
months ended June 30, 2024 of $352 million decreased by 26 per cent
compared to the same period in 2023, primary due to:
- Lower gross
margin on lower revenues net of unrealized gains from risk
management activities; partially offset by
- Lower fuel and
purchased power and carbon compliance costs; and
- A favourable
change in non-cash operating working capital balances on lower
accounts receivable from lower revenues and higher collateral
received related to derivative instruments.
Net earnings attributable to common shareholders
for the three and six months ended June 30, 2024 totalled $56
million and $278 million, respectively, compared to $62 and $356
million in the same periods in 2023, primarily due to:
- Lower adjusted
EBITDA due to items discussed above;
- Higher income
tax expense due to a recovery related to the reversal of previously
derecognized Canadian deferred tax assets in the second quarter of
2023; partially offset by
- Lower
depreciation and amortization primarily due to revisions to useful
lives on certain facilities in prior periods.
Alberta Electricity Portfolio
The average spot power price per MWh for the
three and six months ended June 30, 2024, decreased to $45 per MWh
and $72 per MWh, respectively, from $160 per MWh and $151 per MWh,
respectively, in the same periods in 2023, primarily due to:
- Higher
generation from the addition of new wind and solar and gas supply
in the market compared to the prior periods;
- Lower natural
gas prices; and
- Milder weather
compared with the same periods in 2023.
Realized merchant power price per MWh of
production for the three and six months ended June 30, 2024,
decreased by $20 per MWh and $6 per MWh, respectively, compared to
the same periods in 2023, primarily due to:
-
Lower average spot power prices as explained above; and
- Lower hedge
prices compared to the same periods in 2023; partially offset
by
- Higher volume of
favourable hedging positions settled, which generated positive
contributions over settled spot prices.
Carbon compliance cost per MWh of production for
the three and six months ended June 30, 2024, was consistent
compared to the same periods in 2023, primarily due to:
- An increase in
carbon pricing from $65 per tonne to $80 per tonne, which was
offset by the utilization of emission credits to settle a portion
of the 2023 Green House Gas obligation.
Hedged volumes for the three and six months
ended June 30, 2024 were 2,132 GWh and 4,077 GWh at an average
price of $84 per MWh and $86 per MWh, respectively. Volumes
increased over the same periods in 2023 by 1,714 GWh and 3,828 GWh,
respectively. In anticipation of lower prices in 2024, the Company
deployed a defensive strategy to increase financial hedges for the
merchant portfolio at attractive margins. Realized gains and losses
on financial hedges are included in Revenues.
Liquidity and Financial Position
We expect to maintain adequate available
liquidity under our committed credit facilities. As at June 30,
2024, we had access to $1.7 billion in liquidity, including $350
million in cash.
2024 Financial Guidance
The following table outlines our expectations on
key financial targets and related assumptions for 2024:
Measure |
2024 Target |
Adjusted EBITDA |
$1,150 million - $1,300 million |
FCF |
$450 million - $600 million |
FCF per share |
$1.47 - $1.96 |
Dividend per share (annualized) |
$0.24 |
The Company's outlook for 2024 may be impacted
by a number of factors as detailed further below.
Market |
2024 Assumptions |
Alberta spot ($/MWh) |
$75 to $95 |
Mid-C spot (US$/MWh) |
US$75 to US$85 |
AECO gas price ($/GJ) |
$1.75 to $2.25 |
Alberta spot price sensitivity: a +/- $1 per MWh
change in spot price is expected to have a +/-$2 million impact on
adjusted EBITDA for 2024 for the balance of the year.
Other assumptions relevant to the 2024
outlook
|
2024 Expectations |
Energy Marketing gross margin |
$110 million to $130 million |
Sustaining capital |
$130 million to $150 million |
Corporate cash taxes |
$95 million to $130 million |
Cash interest |
$240 million to $260 million |
Hedging assumptions |
Q3 2024 |
Q4 2024 |
Full year 2025 |
Full year 2026 |
Hedged production (GWh) |
2,254 |
2,198 |
4,977 |
3,361 |
Hedge price ($/MWh) |
$85 |
$84 |
$77 |
$80 |
Hedged gas volumes (GJ) |
14 million |
14 million |
28 million |
18 million |
Hedge
gas prices ($/GJ) |
$2.82 |
$2.82 |
$3.51 |
$3.67 |
Conference call
TransAlta will hold a conference call and
webcast at 9:00 a.m. MST (11:00 a.m. EST) today, August 1, 2024, to
discuss our second quarter 2024 results. The call will begin with
an address by John Kousinioris, President and Chief Executive
Officer, and Joel Hunter, Executive Vice President, Finance and
Chief Financial Officer, followed by a question and answer period
for investment analysts and investors. A question and answer period
for the media will immediately follow.
Second Quarter 2024 Conference Call |
|
Webcast link:
https://edge.media-server.com/mmc/p/wyxuetfp |
|
A link to the live webcast will be available on
the Investor Centre section of TransAlta’s website at
https://transalta.com/investors/presentations-and-events/. To
access the conference call via telephone, please register ahead of
time using the call link here:
https://register.vevent.com/register/BI822fcd13487248f6aeaefa8578cef5cc.
Once registered, participants will have the option of 1) dialing
into the call from their phone (via a personalized PIN); or 2)
clicking the “Call Me” option to receive an automated call directly
to their phone.
Related materials will be available on the
Investor Centre section of TransAlta’s website at
https://transalta.com/investors/presentations-and-events/. If you
are unable to participate in the call, the replay will be
accessible at https://edge.media-server.com/mmc/p/wyxuetfp. A
transcript of the broadcast will be posted on TransAlta’s website
once it becomes available.
Notes
(1) These items are not defined and have no
standardized meaning under IFRS. Presenting these items from period
to period provides management and investors with the ability to
evaluate earnings (loss) trends more readily in comparison with
prior periods’ results. Please refer to the Non-IFRS Measures
section of this earnings release for further discussion of these
items, including, where applicable, reconciliations to measures
calculated in accordance with IFRS.(2) Funds from operations
("FFO") per share and free cash flow ("FCF") per share are
calculated using the weighted average number of common
shares outstanding during the period. Refer to the Additional
IFRS Measures and Non-IFRS Measures section of the MD&A for the
purpose of these non-IFRS ratios.
Non-IFRS financial measures and other specified
financial measures
We use a number of financial measures to
evaluate our performance and the performance of our business
segments, including measures and ratios that are presented on a
non-IFRS basis, as described below. Unless otherwise indicated, all
amounts are in Canadian dollars and have been derived from our
unaudited interim condensed consolidated financial statements
prepared in accordance with IFRS. We believe that these non-IFRS
amounts, measures and ratios, read together with our IFRS amounts,
provide readers with a better understanding of how management
assesses results.
Non-IFRS amounts, measures and ratios do not
have standardized meanings under IFRS. They are unlikely to be
comparable to similar measures presented by other companies and
should not be viewed in isolation from, as an alternative to, or
more meaningful than, our IFRS results.
Adjusted EBITDA
Each business segment assumes responsibility for
its operating results measured by adjusted EBITDA. Adjusted EBITDA
is an important metric for management that represents our core
operational results. In the second quarter of 2024, our reported
EBITDA composition was adjusted to include the impact of
acquisition transaction and integration costs as the Company does
not have frequent business acquisitions and the acquisition
transaction and integration costs are not reflective of Company’s
ongoing business performance. Accordingly, the Company has applied
this composition to all previously reported periods. Interest,
taxes, depreciation and amortization are not included, as
differences in accounting treatments may distort our core business
results. In addition, certain reclassifications and adjustments are
made to better assess results, excluding those items that may not
be reflective of ongoing business performance. This presentation
may facilitate the readers' analysis of trends.
Funds From Operations ("FFO")
FFO is an important metric as it provides a
proxy for cash generated from operating activities before changes
in working capital and provides the ability to evaluate cash flow
trends in comparison with results from prior periods. FFO is a
non-IFRS measure.
Free Cash Flow ("FCF")
FCF is an important metric as it represents the
amount of cash that is available to invest in growth initiatives,
make scheduled principal repayments on debt, repay maturing debt,
pay common share dividends or repurchase common shares. Changes in
working capital are excluded so FFO and FCF are not distorted by
changes that we consider temporary in nature, reflecting, among
other things, the impact of seasonal factors and timing of receipts
and payments. FCF is a non-IFRS measure.
Non-IFRS Ratios
FFO per share, FCF per share and adjusted net
debt to adjusted EBITDA are non-IFRS ratios that are presented in
the MD&A. Refer to the Reconciliation of Cash Flow from
Operations to FFO and FCF and Key Non-IFRS Financial Ratios
sections of the MD&A for additional information.
FFO per share and FCF per share
FFO per share and FCF per share are calculated
using the weighted average number of common shares outstanding
during the period. FFO per share and FCF per share are non-IFRS
ratios.
Reconciliation of these non-IFRS financial
measures to the most comparable IFRS measure are provided
below.
Reconciliation of Non-IFRS Measures on a Consolidated
Basis
The following table reflects adjusted EBITDA by
segment and provides reconciliation to earnings before income taxes
for the three months ended June 30, 2024:
Three months ended June 30, 2024 millions |
Hydro |
Wind & Solar(1) |
Gas |
Energy Transition |
EnergyMarketing |
Corporate |
Total |
Equity- accounted
investments(1) |
Reclass adjustments |
IFRS financials |
Revenues |
99 |
112 |
|
284 |
|
79 |
|
47 |
|
(34 |
) |
587 |
|
(5 |
) |
— |
|
582 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market (gain) loss |
1 |
8 |
|
10 |
|
(14 |
) |
1 |
|
— |
|
6 |
|
— |
|
(6 |
) |
— |
|
Realized gain (loss) on closed exchange positions |
— |
— |
|
3 |
|
1 |
|
(9 |
) |
— |
|
(5 |
) |
— |
|
5 |
|
— |
|
Decrease in finance lease receivable |
— |
— |
|
5 |
|
— |
|
— |
|
— |
|
5 |
|
— |
|
(5 |
) |
— |
|
Finance lease income |
— |
2 |
|
2 |
|
— |
|
— |
|
— |
|
4 |
|
— |
|
(4 |
) |
— |
|
Unrealized foreign exchange gain on commodity |
— |
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
Adjusted revenues |
100 |
122 |
|
303 |
|
66 |
|
39 |
|
(34 |
) |
596 |
|
(5 |
) |
(9 |
) |
582 |
|
Fuel and purchased power |
3 |
8 |
|
97 |
|
46 |
|
— |
|
— |
|
154 |
|
— |
|
— |
|
154 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
Adjusted fuel and purchased power |
3 |
8 |
|
96 |
|
46 |
|
— |
|
— |
|
153 |
|
— |
|
1 |
|
154 |
|
Carbon
compliance |
— |
— |
|
26 |
|
— |
|
— |
|
(34 |
) |
(8 |
) |
— |
|
— |
|
(8 |
) |
Gross margin |
97 |
114 |
|
181 |
|
20 |
|
39 |
|
— |
|
451 |
|
(5 |
) |
(10 |
) |
436 |
|
OM&A |
13 |
24 |
|
42 |
|
15 |
|
9 |
|
42 |
|
145 |
|
(1 |
) |
— |
|
144 |
|
Reclassifications and
adjustments: |
|
|
|
|
|
|
|
|
|
|
Acquisition and integration costs |
— |
— |
|
— |
|
— |
|
— |
|
(4 |
) |
(4 |
) |
— |
|
4 |
|
— |
|
Adjusted OM&A |
13 |
24 |
|
42 |
|
15 |
|
9 |
|
38 |
|
141 |
|
(1 |
) |
4 |
|
144 |
|
Taxes, other than
income taxes |
1 |
4 |
|
3 |
|
2 |
|
— |
|
— |
|
10 |
|
(1 |
) |
— |
|
9 |
|
Net other operating
income |
— |
(2 |
) |
(10 |
) |
— |
|
— |
|
— |
|
(12 |
) |
— |
|
— |
|
(12 |
) |
Adjusted EBITDA(2) |
83 |
88 |
|
146 |
|
3 |
|
30 |
|
(38 |
) |
312 |
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
3 |
|
Finance lease income |
|
|
|
|
|
|
|
|
|
4 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(131 |
) |
Asset impairment charges |
|
|
|
|
|
|
|
|
|
(5 |
) |
Interest income |
|
|
|
|
|
|
|
|
|
8 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
(80 |
) |
Foreign exchange loss |
|
|
|
|
|
|
|
|
|
(1 |
) |
Gain on
sale of assets and other |
|
|
|
|
|
|
|
|
|
1 |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
94 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar segment.(2)
Adjusted EBITDA is not defined and has no standardized meaning
under IFRS. Refer to the non-IFRS financial measures and other
specified financial measures section in this earnings release.The
following table reflects adjusted EBITDA by segment and provides
reconciliation to earnings before income taxes for the three months
ended June 30, 2023:
Three months ended June 30, 2023 millions |
Hydro |
Wind & Solar(1) |
Gas |
Energy Transition |
EnergyMarketing |
Corporate |
Total |
Equity- accounted
investments(1) |
Reclass adjustments |
IFRS financials |
Revenues |
168 |
|
86 |
|
251 |
|
121 |
|
3 |
|
1 |
|
630 |
|
(5 |
) |
— |
|
625 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market (gain) loss |
(1 |
) |
(8 |
) |
56 |
|
(3 |
) |
93 |
|
— |
|
137 |
|
— |
|
(137 |
) |
— |
|
Realized loss on closed exchange positions |
— |
|
— |
|
(4 |
) |
— |
|
(48 |
) |
— |
|
(52 |
) |
— |
|
52 |
|
— |
|
Decrease in finance lease receivable |
— |
|
— |
|
13 |
|
— |
|
— |
|
— |
|
13 |
|
— |
|
(13 |
) |
— |
|
Finance lease income |
— |
|
— |
|
4 |
|
— |
|
— |
|
— |
|
4 |
|
— |
|
(4 |
) |
— |
|
Unrealized foreign exchange loss on commodity |
— |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
1 |
|
— |
|
(1 |
) |
— |
|
Adjusted revenues |
167 |
|
78 |
|
320 |
|
118 |
|
49 |
|
1 |
|
733 |
|
(5 |
) |
(103 |
) |
625 |
|
Fuel and purchased power |
5 |
|
7 |
|
85 |
|
90 |
|
— |
|
1 |
|
188 |
|
— |
|
— |
|
188 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
Adjusted fuel and purchased power |
5 |
|
7 |
|
84 |
|
90 |
|
— |
|
1 |
|
187 |
|
— |
|
1 |
|
188 |
|
Carbon
compliance |
— |
|
— |
|
25 |
|
— |
|
— |
|
— |
|
25 |
|
— |
|
— |
|
25 |
|
Gross margin |
162 |
|
71 |
|
211 |
|
28 |
|
49 |
|
— |
|
521 |
|
(5 |
) |
(104 |
) |
412 |
|
OM&A |
14 |
|
18 |
|
50 |
|
14 |
|
6 |
|
32 |
|
134 |
|
— |
|
— |
|
134 |
|
Taxes, other than
income taxes |
1 |
|
4 |
|
4 |
|
1 |
|
— |
|
— |
|
10 |
|
(1 |
) |
— |
|
9 |
|
Net other operating
income |
— |
|
(1 |
) |
(9 |
) |
— |
|
— |
|
— |
|
(10 |
) |
— |
|
— |
|
(10 |
) |
Adjusted EBITDA(2) |
147 |
|
50 |
|
166 |
|
13 |
|
43 |
|
(32 |
) |
387 |
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
(1 |
) |
Finance lease income |
|
|
|
|
|
|
|
|
|
4 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(173 |
) |
Asset impairment
reversals |
|
|
|
|
|
|
|
|
|
13 |
|
Interest income |
|
|
|
|
|
|
|
|
|
16 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
(72 |
) |
Foreign exchange gain |
|
|
|
|
|
|
|
|
|
8 |
|
Gain on
sale of assets and other |
|
|
|
|
|
|
|
|
|
5 |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
79 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar segment.(2)
Adjusted EBITDA is not defined and has no standardized meaning
under IFRS. Refer to the non-IFRS financial measures and other
specified financial measures section in this earnings release.The
following table reflects adjusted EBITDA by segment and provides
reconciliation to earnings before income taxes for the six months
ended June 30, 2024:
Six months ended June 30, 2024
millions |
Hydro |
Wind & Solar(1) |
Gas |
Energy Transition |
EnergyMarketing |
Corporate |
Total |
Equity- accounted
investments(1) |
Reclass adjustments |
IFRS financials |
Revenues |
211 |
|
251 |
|
717 |
|
296 |
|
99 |
|
(34 |
) |
1,540 |
|
(11 |
) |
— |
|
1,529 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market gain |
(4 |
) |
(13 |
) |
(81 |
) |
(20 |
) |
(2 |
) |
— |
|
(120 |
) |
— |
|
120 |
|
— |
|
Realized gain (loss) on closed exchange positions |
— |
|
— |
|
11 |
|
— |
|
(28 |
) |
— |
|
(17 |
) |
— |
|
17 |
|
— |
|
Decrease in finance lease receivable |
— |
|
1 |
|
9 |
|
— |
|
— |
|
— |
|
10 |
|
— |
|
(10 |
) |
— |
|
Finance lease income |
— |
|
3 |
|
3 |
|
— |
|
— |
|
— |
|
6 |
|
— |
|
(6 |
) |
— |
|
Unrealized foreign exchange gain on commodity |
— |
|
— |
|
(2 |
) |
— |
|
— |
|
— |
|
(2 |
) |
— |
|
2 |
|
— |
|
Adjusted revenues |
207 |
|
242 |
|
657 |
|
276 |
|
69 |
|
(34 |
) |
1,417 |
|
(11 |
) |
123 |
|
1,529 |
|
Fuel and purchased power |
9 |
|
17 |
|
239 |
|
212 |
|
— |
|
— |
|
477 |
|
— |
|
— |
|
477 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
|
— |
|
(2 |
) |
— |
|
— |
|
— |
|
(2 |
) |
— |
|
2 |
|
— |
|
Adjusted fuel and purchased power |
9 |
|
17 |
|
237 |
|
212 |
|
— |
|
— |
|
475 |
|
— |
|
2 |
|
477 |
|
Carbon
compliance |
— |
|
— |
|
66 |
|
— |
|
— |
|
(34 |
) |
32 |
|
— |
|
— |
|
32 |
|
Gross margin |
198 |
|
225 |
|
354 |
|
64 |
|
69 |
|
— |
|
910 |
|
(11 |
) |
121 |
|
1,020 |
|
OM&A |
26 |
|
44 |
|
88 |
|
33 |
|
19 |
|
70 |
|
280 |
|
(2 |
) |
— |
|
278 |
|
Reclassifications and
adjustments: |
|
|
|
|
|
|
|
|
|
|
Acquisition and integration
costs |
— |
|
— |
|
— |
|
— |
|
— |
|
(7 |
) |
(7 |
) |
— |
|
7 |
|
— |
|
Adjusted OM&A |
26 |
|
44 |
|
88 |
|
33 |
|
19 |
|
63 |
|
273 |
|
(2 |
) |
7 |
|
278 |
|
Taxes, other than income
taxes |
2 |
|
8 |
|
6 |
|
2 |
|
— |
|
— |
|
18 |
|
(1 |
) |
— |
|
17 |
|
Net
other operating income |
— |
|
(4 |
) |
(20 |
) |
— |
|
— |
|
— |
|
(24 |
) |
— |
|
— |
|
(24 |
) |
Adjusted EBITDA(2) |
170 |
|
177 |
|
280 |
|
29 |
|
50 |
|
(63 |
) |
643 |
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
4 |
|
Finance lease income |
|
|
|
|
|
|
|
|
|
6 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(255 |
) |
Asset impairment charges |
|
|
|
|
|
|
|
|
|
(6 |
) |
Interest income |
|
|
|
|
|
|
|
|
|
15 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
(149 |
) |
Foreign exchange loss |
|
|
|
|
|
|
|
|
|
(6 |
) |
Gain on
sale of assets and other |
|
|
|
|
|
|
|
|
|
3 |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
361 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar segment.(2)
Adjusted EBITDA is not defined and has no standardized meaning
under IFRS. Refer to the non-IFRS financial measures and other
specified financial measures section in this earnings release.
The following table reflects adjusted EBITDA by
segment and provides reconciliation to earnings before income taxes
for the six months ended June 30, 2023:
Six months ended June 30,
2023millions |
Hydro |
Wind & Solar(1) |
Gas |
Energy Transition |
EnergyMarketing |
Corporate |
Total |
Equity- accounted
investments(1) |
Reclass adjustments |
IFRS financials |
Revenues |
293 |
|
201 |
|
746 |
|
388 |
|
95 |
|
1 |
|
1,724 |
|
(10 |
) |
— |
|
1,714 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market (gain) loss |
(2 |
) |
(8 |
) |
(8 |
) |
(17 |
) |
109 |
|
— |
|
74 |
|
— |
|
(74 |
) |
— |
|
Realized gain (loss) on closed exchange positions |
— |
|
— |
|
(17 |
) |
— |
|
(103 |
) |
— |
|
(120 |
) |
— |
|
120 |
|
— |
|
Decrease in finance lease receivable |
— |
|
— |
|
26 |
|
— |
|
— |
|
— |
|
26 |
|
— |
|
(26 |
) |
— |
|
Finance lease income |
— |
|
— |
|
8 |
|
— |
|
— |
|
— |
|
8 |
|
— |
|
(8 |
) |
— |
|
Unrealized foreign exchange loss on commodity |
— |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
1 |
|
— |
|
(1 |
) |
— |
|
Adjusted revenues |
291 |
|
193 |
|
755 |
|
371 |
|
102 |
|
1 |
|
1,713 |
|
(10 |
) |
11 |
|
1,714 |
|
Fuel and purchased power |
10 |
|
16 |
|
215 |
|
271 |
|
— |
|
1 |
|
513 |
|
— |
|
— |
|
513 |
|
Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
|
— |
|
(2 |
) |
— |
|
— |
|
— |
|
(2 |
) |
— |
|
2 |
|
— |
|
Adjusted fuel and purchased power |
10 |
|
16 |
|
213 |
|
271 |
|
— |
|
1 |
|
511 |
|
— |
|
2 |
|
513 |
|
Carbon
compliance |
— |
|
— |
|
57 |
|
— |
|
— |
|
— |
|
57 |
|
— |
|
— |
|
57 |
|
Gross margin |
281 |
|
177 |
|
485 |
|
100 |
|
102 |
|
— |
|
1,145 |
|
(10 |
) |
9 |
|
1,144 |
|
OM&A |
26 |
|
35 |
|
91 |
|
31 |
|
20 |
|
56 |
|
259 |
|
(1 |
) |
|
258 |
|
Taxes, other than
income taxes |
2 |
|
7 |
|
8 |
|
2 |
|
— |
|
— |
|
19 |
|
(1 |
) |
|
18 |
|
Net other operating
income |
— |
|
(3 |
) |
(20 |
) |
— |
|
— |
|
— |
|
(23 |
) |
— |
|
|
(23 |
) |
Adjusted EBITDA(2) |
253 |
|
138 |
|
406 |
|
67 |
|
82 |
|
(56 |
) |
890 |
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
1 |
|
Finance lease income |
|
|
|
|
|
|
|
|
|
8 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(349 |
) |
Asset impairment
reversals |
|
|
|
|
|
|
|
|
|
16 |
|
Interest income |
|
|
|
|
|
|
|
|
|
31 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
(146 |
) |
Foreign exchange gain |
|
|
|
|
|
|
|
|
|
5 |
|
Gain on
sale of assets and other |
|
|
|
|
|
|
|
|
|
5 |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
462 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar segment.(2)
Adjusted EBITDA is not defined and has no standardized meaning
under IFRS. Refer to the non-IFRS financial measures and other
specified financial measures section in this earnings release.
Reconciliation of cash flow from
operations to FFO and FCF
The table below reconciles cash flow from
operating activities to FFO and FCF:
|
Three months ended June 30 |
Six months ended June 30 |
$ millions, unless otherwise stated |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Cash flow from operating activities(1) |
108 |
|
11 |
|
352 |
|
473 |
|
Change
in non-cash operating working capital balances |
114 |
|
408 |
|
107 |
|
366 |
|
Cash flow from operations before changes in working
capital |
222 |
|
419 |
|
459 |
|
839 |
|
Adjustments |
|
|
|
|
Share of adjusted FFO from joint venture(1) |
2 |
|
5 |
|
4 |
|
8 |
|
Decrease in finance lease receivable |
5 |
|
13 |
|
10 |
|
26 |
|
Clean energy transition provisions and adjustments(2) |
2 |
|
7 |
|
2 |
|
7 |
|
Realized loss on closed exchanged positions |
(5 |
) |
(52 |
) |
(17 |
) |
(120 |
) |
Acquisition and integration costs |
4 |
|
— |
|
7 |
|
— |
|
Other(3) |
1 |
|
(1 |
) |
8 |
|
5 |
|
FFO(4) |
231 |
|
391 |
|
473 |
|
765 |
|
Deduct: |
|
|
|
|
Sustaining capital(1) |
(40 |
) |
(44 |
) |
(40 |
) |
(64 |
) |
Dividends paid on preferred shares |
(13 |
) |
(12 |
) |
(26 |
) |
(25 |
) |
Distributions paid to subsidiaries’ non-controlling interests |
(5 |
) |
(53 |
) |
(24 |
) |
(129 |
) |
Principal payments on lease liabilities |
(1 |
) |
(3 |
) |
(2 |
) |
(5 |
) |
Other |
— |
|
(1 |
) |
— |
|
(1 |
) |
FCF(4) |
172 |
|
278 |
|
381 |
|
541 |
|
Weighted average number of common shares outstanding in the
period |
303 |
|
264 |
|
306 |
|
266 |
|
FFO per share(4) |
0.76 |
|
1.48 |
|
1.55 |
|
2.88 |
|
FCF per share(4) |
0.57 |
|
1.05 |
|
1.25 |
|
2.03 |
|
(1) Includes our share of amounts for
Skookumchuck, an equity-accounted joint venture.(2) 2023 includes
amounts related to onerous contracts recognized in 2021.(3) Other
consists of production tax credits, which is a reduction to tax
equity debt, less distributions from the equity-accounted
joint venture. (4) These items are not defined and have no
standardized meaning under IFRS. Refer to the non-IFRS Measures
section in this earnings release.
The table below provides a reconciliation of
adjusted EBITDA to FFO and FCF:
|
Three months ended June 30 |
Six months ended June 30 |
$ millions, unless otherwise stated |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Adjusted EBITDA(1)(4) |
312 |
|
387 |
|
643 |
|
890 |
|
Provisions |
6 |
|
1 |
|
6 |
|
4 |
|
Net interest expense(2) |
(57 |
) |
(38 |
) |
(105 |
) |
(83 |
) |
Current income tax recovery
(expense) |
(33 |
) |
42 |
|
(60 |
) |
(18 |
) |
Realized foreign exchange gain
(loss) |
— |
|
1 |
|
(8 |
) |
(6 |
) |
Decommissioning and
restoration costs settled |
(12 |
) |
(9 |
) |
(19 |
) |
(16 |
) |
Other
non-cash items |
15 |
|
7 |
|
16 |
|
(6 |
) |
FFO(3)(4) |
231 |
|
391 |
|
473 |
|
765 |
|
Deduct: |
|
|
|
|
Sustaining capital(4) |
(40 |
) |
(44 |
) |
(40 |
) |
(64 |
) |
Dividends paid on preferred shares |
(13 |
) |
(12 |
) |
(26 |
) |
(25 |
) |
Distributions paid to subsidiaries’ non-controlling interests |
(5 |
) |
(53 |
) |
(24 |
) |
(129 |
) |
Principal payments on lease liabilities |
(1 |
) |
(3 |
) |
(2 |
) |
(5 |
) |
Other |
— |
|
(1 |
) |
— |
|
(1 |
) |
FCF(3)(4) |
172 |
|
278 |
|
381 |
|
541 |
|
(1) Adjusted EBITDA is defined in the Additional
IFRS Measures and non-IFRS Measures of this earnings release and
reconciled to earnings (loss) before income taxes above.(2) Net
interest expense includes interest expense for the period less
interest income.(3) These items are not defined and have no
standardized meaning under IFRS. FFO and FCF are defined in the
Non-IFRS financial measures and other specified financial measures
section of in this earnings release and reconciled to cash flow
from operating activities above.(4) Includes our share of amounts
for Skookumchuck wind facility, an equity-accounted joint venture.
Refer to the Capital Expenditures section of our Second Quarter
2024 MD&A for details of sustaining capital expenditures.
TransAlta is in the process of filing its
unaudited interim Consolidated Financial Statements and
accompanying notes, as well as the associated Management’s
Discussion & Analysis (“MD&A”). These documents will be
available today on the Investors section of TransAlta’s website at
www.transalta.com or through SEDAR at www.sedarplus.ca.
About TransAlta Corporation
TransAlta owns, operates and develops a diverse
fleet of electrical power generation assets in Canada, the United
States and Australia with a focus on long-term shareholder value.
TransAlta provides municipalities, medium and large industries,
businesses and utility customers with affordable, energy efficient
and reliable power. Today, TransAlta is one of Canada’s largest
producers of wind power and Alberta’s largest producer of
hydroelectric power. For over 113 years, TransAlta has been a
responsible operator and a proud member of the communities where we
operate and where our employees work and live. TransAlta aligns its
corporate goals with the UN Sustainable Development Goals and the
Future-Fit Business Benchmark, which also define sustainable goals
for businesses. Our reporting on climate change management has been
guided by the International Financial Reporting Standards (IFRS) S2
Climate-related Disclosures Standard and the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations.
TransAlta has achieved a 66 per cent reduction in GHG emissions or
21.3 million tonnes CO2e since 2015 and received an upgraded MSCI
ESG rating of AA.
For more information about TransAlta, visit our
web site at transalta.com.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains "forward-looking
information", within the meaning of applicable Canadian securities
laws, and "forward-looking statements", within the meaning of
applicable United States securities laws, including the United
States Private Securities Litigation Reform Act of 1995
(collectively referred to herein as "forward-looking statements).
In some cases, forward-looking statements can be identified by
terminology such as "plans", "expects", "proposed", "will",
"anticipates", "develop", "continue", and similar expressions
suggesting future events or future performance. In particular, this
news release contains, without limitation, statements pertaining
to: TransAlta’s commitment to enhancing shareholder returns through
share buybacks and dividends; the Company previously announced an
enhanced common share repurchase program for 2024 of up to $150
million, targeting up to 42 per cent of 2024 FCF guidance to be
returned to shareholders in the form of share repurchases and
dividends; that the expected annual average EBITDA from the two
agreements for the sale of PTCs being approximately $78 million
(US$57 million); that opportunities will arise to support the
energy transition in our core jurisdictions, including the
redevelopment and recontracting our legacy thermal sites; that the
Company's water management efforts will not have an adverse impact
on our electricity generating and environmental objectives; and our
expectations on key financial targets and related assumptions for
2024 and our ability to meet such targets, including adjusted
EBITDA, free cash flow, and dividend per share.
The forward-looking statements contained in this
news release are based on many assumptions including, but not
limited to, the following material assumptions: no significant
changes to applicable laws and regulations beyond those that have
already been announced; those assumptions contained in the
Company’s 2024 Outlook, including as it pertains to power and gas
prices and expected hedge levels; no material adverse impacts to
long-term investment and credit markets; no significant changes to
the decommissioning and restoration costs; no significant changes
to the integrity and reliability of our assets; and no significant
changes to the Company's debt and credit ratings. Forward-looking
statements are subject to a number of significant risks, and
uncertainties that could cause actual plans, performance, results
or outcomes to differ materially from current expectations. Factors
that may adversely impact what is expressed or implied by
forward-looking statements contained in this news release include,
risks relating to: fluctuations in power prices, including merchant
pricing in Alberta, Ontario and Mid-Columbia; supply chain
disruptions impacting major maintenance and growth projects;
reductions in production; restricted access to capital and
increased borrowing costs, including any difficulty raising debt,
equity or tax equity, as applicable, on reasonable terms or at all;
labour relations matters, reduced labour availability and the
ability to continue to staff our operations and facilities;
reliance on key personnel; disruptions to our supply chains,
including our ability to secure necessary equipment; force majeure
claims; our ability to obtain regulatory and any other third-party
approvals on the expected timelines or at all in respect of our
growth projects; long term commitments on gas transportation
capacity that may not be fully utilized over time; adverse
financial impacts arising from the Company's hedged positions;
risks associated with development and construction projects,
including as it pertains to real property, disputes with
contractors and potential delays in the construction or
commissioning of such projects; significant fluctuations in the
Canadian dollar against the US dollar and Australian dollar;
changes in short-term and long-term electricity supply and demand;
counterparty risk, including credit risk and risks of realizing a
higher rate of losses on our accounts receivables; impairments
and/or write-downs of assets; adverse impacts on our information
technology systems and our internal control systems, including
cybersecurity threats; commodity risk management and energy trading
risks, including the effectiveness of the Company’s risk management
tools associated with hedging and trading procedures to protect
against significant losses; an inability to contract our generation
for prices that will provide expected returns and to replace
contracts as they expire; changes to the legislative, regulatory
and political environments in the jurisdictions in which we
operate; environmental requirements and changes in, or liabilities
under, these requirements; disruptions in the transmission and
distribution of electricity; the effects of weather, including
man-made or natural disasters, and climate-change related risks;
increases in costs; reductions to our generating units’ relative
efficiency or capacity factors; disruptions in the source of fuels,
including natural gas, coal, water, solar, or wind resources
required to operate our facilities; any inability to receive all
required regulatory approvals for the acquisition of Heartland
Generation Ltd. and the risk that the closing of such transaction
could be delayed or not occur; failure to meet financial
expectations, including any failure to meet our 2024 Outlook;
general domestic and international economic and political
developments, including armed hostilities, the threat of terrorism,
adverse diplomatic developments or other similar events; equipment
failure and our ability to carry out or have completed the repairs
in a cost-effective and timely manner or at all; industry risk and
competition in the business in which we operate; structural
subordination of securities; inadequacy or unavailability of
insurance coverage; our provision for income taxes and any risk of
reassessment; and legal, regulatory and contractual disputes and
proceedings involving the Company; and other risks and
uncertainties discussed in the Company's materials filed with the
securities regulatory authorities from time to time and as also set
forth in the Company's Management Discussion and Analysis and
Annual Information Form for the year ended Dec. 31, 2023. Readers
are urged to consider these factors carefully in evaluating the
forward-looking statements, which reflect the Company's
expectations only as of the date hereof and are cautioned not to
place undue reliance on them. The purpose of the financial outlooks
contained herein is to give the reader information about
management's current expectations and plans and readers are
cautioned that such information may not be appropriate for other
purposes. The forward-looking statements included in this document
are made only as of the date hereof and we do not undertake to
publicly update these forward-looking statements to reflect new
information, future events or otherwise, except as required by
applicable laws.
Note: All financial figures are in Canadian
dollars unless otherwise indicated.
For more information:
Investor
Inquiries: |
Media
Inquiries: |
Phone: 1-800-387-3598 in
Canada and US |
Phone: 1-855-255-9184 |
Email:
investor_relations@transalta.com |
Email:
ta_media_relations@transalta.com |
TransAlta (TSX:TA)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
TransAlta (TSX:TA)
Historical Stock Chart
Von Dez 2023 bis Dez 2024