TransAlta announces strong fourth quarter results and full year 2010 earnings growth; files year end disclosure documents
- Fourth quarter comparable earnings per share(1) of $0.40; the same as last year
- Fourth quarter fleet availability of 91.4 per cent compared to 87.0 per cent in 2009
- 2010 comparable earnings per share(1) increased nine per cent to $0.98 versus $0.90 in 2009
- Cash flow from operations increased by $231 million to $811 million for the year
- Fully commissioned the 69 megawatt (MW) Ardenville wind farm and the 54 MW Kent Hills wind farm expansion, ahead of schedule and on budget
CALGARY, Alberta (Feb. 24, 2011) – TransAlta Corporation (“TransAlta”) (TSX: TA; NYSE: TAC) today reported fourth quarter 2010 comparable earnings(1) of $88 million ($0.40 per share) versus $84 million ($0.40 per share) in 2009. Reported net earnings applicable to common shares for the fourth quarter were $62 million ($0.28 per common share) compared to $79 million ($0.37 per common share) in 2009.
Comparable results for the quarter were primarily driven by strong availability across the fleet, increased Energy Trading gross margins, and lower depreciation expense. These results were partially offset by weak electricity prices, and lost production from the decommissioning of TransAlta’s Wabamun 4 unit. Net earnings in the quarter were lower due to asset impairment charges of $54 million related to certain coal and natural gas-fired facilities, partially offset by an increase in mark-to-market gains of $28 million on power hedges.
“Power markets remain challenging and we are doing all we can to offset these conditions through strong operational improvements in terms of availability and cost control. Our Energy Trading business finished the year with a very strong quarter. Additionally, all of our growth projects were completed on time and on budget,” said Steve Snyder, TransAlta President and CEO. “The strong close to 2010 provides good momentum for 2011 where we hope to see some market improvement.”
Cash flow from operations for the quarter was $309 million versus $246 million in the fourth quarter of 2009. Cash flow was higher in the quarter due to favourable movements in working capital as a result of lower operational expenditures and the timing of related payments.
Fleet availability for the fourth quarter increased to 91.4 per cent compared to 87.0 per cent in the fourth quarter of 2009 due to lower planned and unplanned outages at our Sundance plant and lower unplanned outages at Centralia Thermal, partially offset by higher planned outages at Genesse 3.
Also in the quarter, TransAlta began commercial operations of its 69 MW, $135 million Ardenville Wind farm on Nov. 10, 2010, followed by commercial operations of its 54 MW, $100 million expansion of the Kent Hills wind farm on Nov. 21, 2010. Both projects began commercial operations on budget and ahead of schedule.
For the twelve months ended Dec. 31, 2010, comparable earnings(1) were $214 million ($0.98 per share) compared to $181 million ($0.90 per share) for the twelve months ended Dec. 31, 2009. Net earnings applicable to common shares were $218 million ($1.00 per common share) compared to $181 million ($0.90 per common share) in 2009. Comparable earnings increased in 2010 primarily due to increased availability and production, higher generation gross margins, lower operations maintenance and administration costs, and lower depreciation expense. Net earnings were also higher due to the same factors, and as a result of an income tax recovery and mark-to-market gains, largely offset by asset impairment charges.
Cash flow from operations for the twelve months ended Dec. 31, 2010 was $811 million, compared to $580 million for the twelve months ended Dec. 31, 2009. The increase in cash flow from operations in 2010 was driven by higher cash earnings and favourable movements in working capital compared to last year.
Fleet availability for the year was 88.9 per cent compared to 85.1 per cent in 2009. The increase in availability is attributed to lower planned outages at the Keephills plant, lower planned and unplanned outages at our Sundance plant, and lower unplanned outages at Centralia Thermal, partially offset by higher planned outages at Centralia Thermal.
TransAlta Board designates new Chair
The board of directors of TransAlta Corporation today announced that Ambassador Gordon D. Giffin has been designated the next Chair of the TransAlta board. Mr. Giffin will succeed Donna Soble Kaufman whose consecutive three-year term limits as Chair expire on April 28, 2011. Mrs. Kaufman has been a director of TransAlta’s board since 1989.
Mr. Giffin’s appointment is subject to his re-election as a director by TransAlta’s shareholders at the annual general meeting of shareholders to be held on April 28, 2011.
TransAlta files year end disclosure documents
TransAlta also announced today it has filed its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the Management’s Discussion and Analysis (MD&A). These documents are available through TransAlta’s website at www.transalta.com or through Sedar at www.sedar.com.
TransAlta has also filed its 40-F with the U.S. Securities and Exchange Commission. The form is available through their website at www.sec.gov/edgar.shtml. Paper copies of all documents are available to shareholders free of charge upon request.
(1) Comparable earnings and comparable earnings per share are not defined under Canadian Generally Accepted Accounting Principles (“Canadian GAAP”). Presenting these measures from period to period help management and shareholders evaluate earnings trends more readily in comparison with prior periods’ results. Refer to the Non-GAAP Measures section of the extended news release for further discussion of these items, including a reconciliation to net earnings.
All figures in millions unless otherwise stated.
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2010
Dec. 31, 2009
|Gross margin ($MM)1||480||435||1,617||1,542|
|Operating income ($MM)1||210||159||497||378|
|Net earnings applicable to common shares ($MM)||62||79||218||181|
|Comparable earnings ($MM)1||88||84||214||181|
|Basic & diluted earnings per common share ($)||0.28||0.37||1.00||0.90|
|Comparable earnings per share ($)1||0.40||0.40||0.98||0.90|
|Comparable Earnings before interest, taxes, depreciation, and amortization (EBITDA)1||301||300||965||888|
|Funds from operations1||225||266||783||729|
|Cash flow from operations ($MM)||309||246||811||580|
|Cash flow from operations per share1||1.40||1.17||3.70||2.89|
1 Gross margin, operating income, comparable earnings, comparable earnings per share, comparable EBITDA, funds from operations, and cash flow from operations per share are not defined under Canadian GAAP. Refer to the non-GAAP financial measures section of the extended news release for an explanation and, where applicable, a reconciliation to net earnings and cash flow from operations.
A complete copy of TransAlta’s fourth quarter extended news release is available on the Investors section of our website here.
TransAlta will hold a conference call and web cast at 9 a.m. MT (11 a.m. ET) today to discuss results. The call will begin with a short address by Steve Snyder, President and CEO, and Brett Gellner, Chief Financial Officer, followed by a question and answer period for investment analysts, investors, and other interested parties. A question and answer period for the media will immediately follow.
Please contact the conference operator five minutes prior to the call, noting “TransAlta Corporation” as the company and “Jess Nieukerk” as moderator.
For local Toronto participants – 1-416-340-2216
Toll-free North American participants – 1-866-226-1792
A link to the live webcast will be available via TransAlta’s website under Web Casts in the Investor Relations section here. If you are unable to participate in the call, the instant replay is accessible at 1-800-408-3053 with TransAlta pass code 5257384. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available. Note: If using a hands-free phone, lift the handset and press one to ask a question.
Note: If using a hands-free phone, lift the handset and press one to ask a question.
TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. For 100 years, TransAlta has been a responsible operator and a proud contributor to the communities where we work and live. TransAlta is recognized for its leadership on sustainability by the Dow Jones Sustainability North America Index, the FTSE4Good Index and the Jantzi Social Index. TransAlta is Canada’s largest investor-owned renewable energy provider.
This news release may contain forward looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. These statements are based on TransAlta Corporation’s belief and assumptions based on information available at the time the assumption was made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions in geographic areas where TransAlta Corporation operates.
Note: All financial figures are in Canadian dollars unless noted otherwise.
For more information:
Director, Public Affairs
Phone: (403) 267-7330
Director, Investor Relations
Phone: 1 800-387-3598