TransAlta and Pembina Pipeline Announce 100 MW Renewable Power Purchase Agreement and Launch of the Garden Plain Wind Project
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has entered into a long-term Power Purchase Agreement (PPA) with Pembina Pipeline Corporation (Pembina) for the offtake of 100 MW from its proposed 130 MW Garden Plain Wind Power Project (Garden Plain or facility), to be located approximately 30 km north of Hanna, Alberta. Under this agreement, Pembina will receive both renewable electricity and environmental attributes for an 18-year term. This long-term contract with Pembina enables TransAlta to add the 130 MW Garden Plain Wind Project to its growing wind generation fleet.
Pembina views power purchase agreements as an effective tool to support development of renewable energy infrastructure, lower emissions and support the transition to a lower carbon energy system. With over 100 years of power generation experience, including extensive and growing renewable energy capacity, we are pleased to be working with TransAlta at Garden Plain and believe we have found the right partner to help Pembina accomplish its long-term goals,- said Mick Dilger, Pembina’s President and Chief Executive Officer.
TransAlta is excited to partner with a great Alberta-based company like Pembina to make the Garden Plain project a reality. The delivery of low cost, reliable and clean energy solutions in support of our customer’s sustainability goals and commitments is a cornerstone of our strategy. Pembina is a leader in this space and the perfect customer and partner for our next Alberta wind facility,- said John Kousinioris, President and Chief Executive Officer of TransAlta.
Pembina and TransAlta have entered into an 18-year PPA for 100 MW, commencing on the Commercial Operation Date (COD) of Garden Plain. The PPA with Pembina provides the foundation that supports the investment in the 130 MW Garden Plain project. TransAlta is currently marketing the remaining 30 MW of the facility to commercial and industrial electricity customers that are looking to reduce the carbon intensity of their operations. To the extent contracts for the remaining 30 MW are not secured, the excess energy will be offered into the merchant wholesale power market in Alberta.
The project will consist of 26 Siemens-Gamesa SGRE SG-145 turbines with construction expected to begin in the fall of 2021, and with a target COD in the second half of 2022. TransAlta will construct, own and operate the facility. Total construction capital of the project is estimated at approximately $195 million.
About Pembina Pipeline Corporation:
Pembina is a leading transportation and midstream service provider that has been serving North America’s energy industry for more than 65 years. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. The Company also owns gas gathering and processing facilities; an oil and natural gas liquids infrastructure and logistics business; and is growing an export terminals business. Pembina’s integrated assets and commercial operations along the majority of the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector. Pembina is committed to identifying additional opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure that would extend Pembina’s service offering even further along the hydrocarbon value chain. These new developments will contribute to ensuring that hydrocarbons produced in the Western Canadian Sedimentary Basin and the other basins where Pembina operates can reach the highest value markets throughout the world.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score.
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: the ability of the Company to contract the 30 MW uncontracted generation, or offer such 30 MW generation into the Alberta merchant market; the timing of construction and commercial operation of the Garden Plain project; and the expected project costs. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Corporation’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to the extent of regulations pertaining to COVID-19 not becoming significantly more onerous. 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: the effects of weather, catastrophes and public health crises, including COVID-19; labour availability; disruptions to the Company’s supply chains; failure to obtain necessary regulatory approvals in a timely fashion, or at all; 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 MD&A and Annual Information Form for the year ended December 31, 2020. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are 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 and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) declared a quarterly dividend of $0.0450 per common share payable on July 1, 2021 to shareholders of record at the close of business on June 1, 2021.
The Board of Directors also declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including March 31, 2021 up to but excluding June 30, 2021:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.877%
$0.17981
June 1, 2021
June 30, 2021
Series B*
TA.PR.E
2.103%
$0.13108
June 1, 2021
June 30, 2021
Series C
TA.PR.F
4.027%
$0.25169
June 1, 2021
June 30, 2021
Series E
TA.PR.H
5.194%
$0.32463
June 1, 2021
June 30, 2021
Series G
TA.PR.J
4.988%
$0.31175
June 1, 2021
June 30, 2021
*Please note the quarterly floating rate on the Series B Preferred Shares will be reset every quarter.
All currency is expressed in Canadian dollars except where noted. When the dividend payment date falls on a weekend or holiday, the payment is made the following business day.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit our website at transalta.com.
TransAlta Certified by Diversio for its Equity, Diversity and Inclusion Program
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) has received certification from Diversio, a technology company setting the global standard for diversity and inclusion, for its continued commitment to and meaningful performance on equity, diversity, and inclusion (E,D&I) in the workplace. TransAlta is the first publicly traded energy company to be certified. Diversio’s award-winning artificial intelligence technology has helped hundreds of organizations and investors to collect data, gain insights, and implement solutions to make meaningful progress on E,D&I. Each certified organization must uphold standards of E,D&I, action that not only makes their companies more attractive to new talent but also makes them more successful.
We are proud to have received recognition from Diversio’s globally-recognized certification platform for our E,D&I activities. The certification validates our company’s efforts to measure, track and continuously improve our equity, diversity, and inclusion goals and practices. It also reflects our commitment to prioritize and accelerate the social goals outlined within our E2SG strategy,- said John Kousinioris, President and CEO. We are very much committed to our E2SG journey. We have incorporated Diversio’s metrics into TransAlta’s 2021 short-term incentive plans for our employees. This will ensure we continue to walk the talk on all things E,D&I.
To obtain certification, the following requirements must be met:
The organization regularly collects data on employee demographics and experience to identify bias and barriers faced by minority groups;
The organization has measured and set targets to increase diversity and inclusion at all levels, including leadership roles; and
The organization has implemented programs and policies designed to unlock specific challenges and is committed to tracking results.
The certification is endorsed by several leading organizations and signals to investors, employees, customers, and other stakeholders that the organization is setting an example of the importance of shifting from words to actions in order to move the dial on E,D&I.
About Diversio:
Diversio is a diversity & inclusion data and consulting company headquartered in Toronto, Canada. With offices in London and New York, Diversio has clients in over 30 countries and is the provider of choice for governments and leading corporations around the world. Diversio’s digital platform uses artificial intelligence to uncover diversity gaps and systemic biases in the workplace and its Recommendation Engine generates unique action plans based on a database of 1,000+ solutions. Diversio tracks improvement over time to help companies stay accountable to their employees, boards, investors, customers and the public. For more information, visit their website.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit our website at transalta.com.
TransAlta and Mangrove Partners Resolve Litigation
TransAlta Corporation (TSX: TA) (NYSE: TAC) (TransAlta or the Company) and The Mangrove Partners Master Fund, Ltd. (Mangrove) announced today that the parties have agreed to resolve this matter on a mutually acceptable basis. With the passage of time, Mangrove will no longer dispute the fairness of the Brookfield transaction. The terms of the settlement are confidential.
As the terms of the settlement are confidential, neither party will be providing any further comments and will not respond to media inquiries related to this News Release.
About TransAlta: 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 clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit its website at transalta.com
Media Advisory: TransAlta and TransAlta Renewables First Quarter 2021 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its first quarter 2021 results before markets open on Thursday, May 13, 2021. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) will release its first quarter 2021 results before markets on Wednesday, May 12, 2021. Any questions regarding TransAlta Renewables may be asked on the TransAlta conference call.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company.
Fourth Quarter and Full Year 2020 Conference Call:
Toll-free North American participants call: 1-888-231-8191
Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 9990399 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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 clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit its web site at transalta.com.
TransAlta Corporation Files Management Proxy Circular and Announces Four New Director Nominees
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today filed its notice of meeting (the Notice) to holders of common shares (Shareholders) along with its management information circular (the Circular) in connection with its annual and special meeting of Shareholders to be held virtually on Tuesday, May 4, 2021 at 12:00 p.m. (Calgary Time) (the Meeting). A copy of the Notice and Circular can be downloaded from the Company’s SEDAR profile at www.sedar.com and the Company’s EDGAR profile at www.sec.gov/edgar.shtml. The Notice and Circular are also available on TransAlta’s website.
As described in the Circular, registered Shareholders are entitled to participate at the Meeting if they held common shares of TransAlta as of the close of business on March 24, 2021, the record date. Non-registered (beneficial) Shareholders who wish to vote at the Meeting will be required to appoint themselves as proxyholder in advance of the Meeting by writing their own name in the space provided on the voting instruction form provided by their intermediary, generally being a bank, trust company, securities broker, trustee or other institution. Detailed instructions for Shareholders to participate in the meeting and a copy of the Virtual AGM User Guide are available at https://transalta.com/investor-centre/events-and-presentations/. Additionally, the Company is sending this information directly to Shareholders.
Each of Mr. Richard Legault, Mr. Yakout Mansour and Mrs. Georgia Nelson are not standing for re-election at the Meeting and will retire from the Company’s Board of Directors (the Board) immediately following the Meeting. The Company acknowledges with gratitude the many contributions that each of Mr. Legault, Mr. Mansour and Mrs. Nelson have made to the Company.
The Company is also pleased to announce that four new highly qualified individuals are being nominated for election to the Board at the Meeting. The four new director nominees consist of:
Laura W. Folse Ms. Folse is the former CEO of BP Wind Energy, North America. As CEO for BP Wind Energy, North America, she led a business with over 500 employees and contractors, which was comprised of 14 wind farms across 8 states with an operating capacity of over 2.5 gigawatts. Prior to her role as CEO of BP Wind Energy, North America, she served at BP p.l.c. as Executive Vice President, Science, Technology, Environment and Regulatory Affairs, in which she led the operational, scientific and technological programs within the multi-billion dollar clean-up and restoration effort in response to the 2010 BP Macondo well explosion off the coast of Louisiana.
Thomas O’Flynn Mr. O’Flynn is currently President, Chief Financial Officer and a Director of EIP Acquisition Corp I, a special purpose acquisition corporation and an affiliate of Energy Impact Partners LP, a private energy technology fund investing in high growth companies in the energy, utility and transportation industries. Mr. O’Flynn was the Chief Executive Officer and Chief Investment Officer, AES Infrastructure Advisors, at AES Corporation until his retirement in 2020. Prior thereto, he was Executive Vice President and Chief Financial Officer at AES Corporation and responsible for all aspects of global finance and the mergers and acquisitions teams across six global regions.
Jim Reid Mr. Reid is the Managing Partner of the Brookfield Private Equity Group based in Calgary, Alberta. He is responsible for originating, evaluating and structuring investments and financings in the energy sector and overseeing operations in the Brookfield private equity energy segment. Mr. Reid established Brookfield’s Calgary office in 2003 after spending several years as a Chief Financial Officer for two oil and gas exploration and production companies in Western Canada. Mr. Reid is also one of the Brookfield nominees to the Board pursuant to the investment agreement entered into between an affiliate of Brookfield and TransAlta in 2019.
Sarah Slusser Ms. Slusser is the CEO of Cypress Creek Renewables, LLC (Cypress Creek), a solar and storage independent power producer that develops, owns and operates projects in the United States. Cypress Creek owns a 1,600 MW operating fleet and has a 7,000 MW development pipeline. Ms. Slusser joined Cypress Creek as CEO in 2019 to reposition the company for sustainable growth. Prior to joining Cypress Creek, Ms. Slusser founded Point Reyes Energy Partners LLC, a solar and energy storage advisory and development company, where she provided strategic advice to a number of large companies in the renewable sector.
More information on each of the nominees is included in the Circular. We encourage Shareholders to vote by proxy as early as possible so that their shares are represented at the Meeting. We also remind Shareholders that they can participate in the Meeting live by logging in online at https://web.lumiagm.com/438758405, password transalta2021.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Corporation Announces Conversion Results for Series A and B Preferred Shares
Further to TransAlta Corporation’s (TransAlta or the Company) (TSX: TA; NYSE: TAC) press release dated March 1, 2021, the Company announced today that (i) 1,417,338 of its 10,175,380 currently outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series A (Series A Shares) will be converted on March 31, 2021, on a one-for-one basis, into Cumulative Redeemable Floating Rate First Preferred Shares, Series B (Series B Shares), and (ii) 871,871 of its 1,824,620 currently outstanding Series B Shares will be converted on March 31, 2021, on a one-for-one basis, into Series A Shares. As a result, on March 31, 2021, the Company will have 9,629,913 Series A Shares issued and outstanding and 2,370,087 Series B Shares issued and outstanding.
The Series A Shares and Series B Shares are currently listed on the Toronto Stock Exchange under the symbols TA.PR.D and TA.PR.E, respectively.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Reports Fourth Quarter and Full Year 2020 Results, Provides 2021 Outlook and Announces Carbon Neutrality by 2050
Fourth Quarter 2020 Financial Highlights
Comparable EBITDA(1) of $234 million compared to $243 million for the same period in 2019
Free Cash Flow (FCF)(1) of $52 million or $0.19 per share in the quarter compared to $121 million or $0.43 per share for the same period in 2019
Full Year 2020 Financial Operating Highlights
Comparable EBITDA(1,3) of $927 million compared to $928 million for the year ending 2019 adjusted for PPA Termination Payments (as defined below)
FCF(1,3) of $358 million or $1.30 per share compared to $379 million or $1.34 per share adjusted for one-time PPA Termination Payments received in 2019
Strong availability of 90.3 per cent compared to 90.0 per cent for 2019
Reduced our carbon emissions by 4.2 million tonnes representing a 20 per cent reduction compared to 2019
Returned $61 million of capital to shareholders with the repurchase and cancellation of 7,352,600 common shares at an average price of $8.33 per share through our normal course issuer bid ( NCIB) program
Reached our target balance of $1.2 billion of senior corporate debt
Increased the common share dividend by 6% to an annualized dividend of 18 cents per share
Other Highlights & Updates
Announced goal of carbon neutrality by 2050
Added net 67 MW of wind generation through our acquisition of a 49 per cent equity investment in the Skookumchuck wind facility
Completed first boiler conversion to gas for Sundance 6
Achieved commercial operation of WindCharger, 10 MW battery storage facility and Alberta’s first utility-scale energy storage facility
Mining operations at Highvale mine to be discontinued by Dec. 31, 2021 and will cease firing with coal in Canada effective Jan. 1, 2022
Replaced existing power purchase agreement with BHP Billiton Nickel West Pty. Ltd. (BHP), extending the term from Dec. 31, 2023 to Dec. 31, 2038
Closed AU$800 million of secured financing from the South Hedland Power Station (TEC Offering)
Received final tranche of investment by an affiliate of Brookfield Asset Management of $400 million in preferred shares of the Company pursuant to the Investment Agreement entered into on Mar. 22, 2019
Together with our partner, Tidewater Midstream & Infrastructure Ltd., entered into a Purchase and Sale Agreement with ATCO Gas and Pipelines Ltd. (ATCO) to sell the Pioneer Pipeline for a purchase price of $255 million ($127.5 million net to TransAlta). This agreement replaces the Company’s previous agreement from second quarter 2020, to sell its interest in the Pioneer Pipeline to NOVA Gas Transmission Ltd. (NGTL)
The Company’s Board adopted a Diversity and Inclusion Pledge that commits the Company to advance diversity and inclusion in the workplace. By undertaking this pledge, the Company will seek to remove systemic barriers that may prevent diverse employees from thriving, including visible minorities, Indigenous people, members of the LGBTQ2S+ community, persons with disabilities, and women
Retired Centralia Unit 1 maintaining the Company’s commitment under Washington state’s Energy Transition Bill
Announced the retirement of Dawn Farrell, President and Chief Executive Officer by Mar. 31, 2021 after leading the Company for almost a decade. John Kousinioris was appointed President and Chief Executive Office to be effective Apr. 1, 2021
2021 Outlook
Comparable EBITDA range of $960 million to $1,080 million, up 10 per cent from 2020 at the mid-point
FCF range of $340 million to $440 million, up 9 per cent from 2020 at the mid-point
Sustaining capital range of $175 to $210 million
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the fourth quarter and full year ended Dec. 31, 2020.
2020 was a pivotal year for TransAlta. Despite the challenges of dealing with a pandemic, we delivered strong financial performance and continued to execute on our Clean Energy Investment Plan. We delivered our first gas conversion, Sundance 6, to market and are on track to close our coal mine in Alberta by end of 2021. Our greenhouse gas emissions (GHG) profile for 2020 reduced an additional 4.2 million tonnes compared to 2019, all told we have achieved a 60 per cent reduction in GHG emissions since 2005 well beyond the expectations under the Paris Agreement. We also deployed 77 MW of net wind and energy storage and we continued to build TransAlta Renewables through the dropdowns we executed at the end of the year.,- said Dawn Farrell, President and Chief Executive Officer. The leadership team under John Kousinioris is well-positioned to deliver an even stronger year in 2021.
I am pleased to announce that TransAlta has adopted the goal of achieving carbon neutrality by 2050. We are well into our emissions reduction journey as a company and we feel our clean electricity strategy is well aligned with a longer-term carbon neutral goal. Setting this goal provides a meaningful internal signal to our team as we execute our growth strategy but provides flexibility over the coming decades. Adopting this goal also sends a signal to our external stakeholders, including governments, regarding our intention to contribute to broader national and global efforts to meet national emissions reduction goals for 2050,- said John Kousinioris, Chief Operating Officer.
Below are additional highlights from the quarter on how TransAlta is advancing its Clean Energy Investment Plan, how the Company is managing COVID-19, as well as details regarding the Company’s liquidity and financial position and its objectives for 2021.
Significant Events and Other Updates
Clean Energy Investment Plan
Conversion to Gas
TransAlta’s Clean Energy Investment Plan includes converting three of our existing Alberta thermal units to gas during 2021 by replacing existing coal burners with natural gas burners. The cost to convert each of TransAlta’s wholly-owned units is expected to be approximately $35 million per unit. On Feb. 1, 2021, we announced the completion of the conversion to gas of Sundance Unit 6. The Company continues to advance conversion of its Keephills Unit 2 and Keephills Unit 3 for completion later in 2021 and has issued Full Notice to Proceed for both units. In addition, on Apr. 4, 2020, the dual-fuel conversion of Sheerness Unit 2 was completed. The Sheerness Unit 1 conversion to gas is in progress with expected completion in the first quarter of 2021. The Sheerness facility will discontinue firing coal by the end of 2021. The elimination of coal as a fuel source will reduce future fuel costs and GHG costs at Sheerness.
Sundance 5 Repowering
During the fourth quarter of 2020, an equipment supply agreement was executed to repower Sundance Unit 5 into a highly efficient combined-cycle unit. Commercial operation date is anticipated in the fourth quarter of 2023. The Sundance 5 repowered combined-cycle unit will have capacity of approximately 730 MW and is expected to cost between $800 million to $825 million, well below a greenfield combined-cycle project. The project has a long-term PPA for capacity plus energy, including the passthrough of GHG costs, starting in late 2023 with Shell Energy North America (Canada), for a portion of the plant capacity. The Company continues to evaluate the prospect for repowering Keephills Unit 1 in 2021 and 2022 as a potential supply addition to the Alberta market in the 2026 to 2030 timeframe.
Windrise
Construction activities continue to advance with all the appropriate procedures in place to protect the construction team during COVID-19 pandemic. The commercial operation date is expected to occur during the second half of 2021. As at Dec. 31, 2020, the project was 78 per cent complete.
Skookumchuck
On Nov. 25, 2020, TransAlta completed the acquisition of a 49 per cent equity interest in the Skookumchuck wind project (Skookumchuck) with Southern Power Company, a subsidiary of Southern Company. Skookumchuck is a 136.8 MW wind project located in Lewis and Thurston counties near Centralia in Washington state and consists of 38 Vestas V136 wind turbines. The project began commercial operation on Nov. 7, 2020, and has a 20-year power purchase agreement with Puget Sound Energy. TransAlta’s total net capital investment was $86 million (US$66 million) in cash, with an additional $77 million (US$59 million) being funded with tax equity financing.
BHP Nickel West Contract Extension
Effective Dec. 1, 2020, Southern Cross Energy (SCE), a subsidiary of the Company, and BHP replaced and extended its current PPA, set to expire Dec. 31, 2023, to Dec. 31, 2038. The PPA provides SCE with the exclusive right to supply thermal and electrical energy for BHP’s mining operations located in the Goldfields region of Western Australia. The extension will provide SCE a return on new capital investments, which will be required to support BHP’s future power requirements and recently announced emission reduction targets. The amendments within the PPA also provide BHP participation rights in integrating renewable electricity generation, including solar and wind, with energy storage technologies, subject to the satisfaction of certain conditions. Evaluation of renewable energy supply and carbon emissions reduction initiatives under the extended PPA with SCE are underway, including an 18.5 MW solar photovoltaic facility supported by a battery energy storage system and a waste heat steam turbine system.
Liquidity and Financial Position
The Company presently has access to $2.1 billion in liquidity, including $703 million in cash. During 2020, we closed an AU$800 million TEC Offering and also received the second and final tranche of the $750 million of strategic financing from Brookfield. We repaid a $400 million medium-term note due on Nov. 25, 2020. Following the closings of the recently announced drop-down transaction to TransAlta Renewables, the Company will have achieved its target of $1.2 billion of senior corporate debt.
Achieved A- Score from CDP
In 2020, TransAlta improved its scoring on the CDP Climate Change investor request. Our overall score was an A-, indicating that we are implementing current best practices. This ranks the Corporation among industry leaders on climate change management and places us as ahead of most companies in North America. The average CDP score for our peers was a B and the average score for reporting companies in North America was a D.
COVID-19
In November 2020, as a result of rising COVID-19 case counts in the Province of Alberta and in light of office attendance restrictions eventually imposed by the Government of Alberta, staff at TransAlta’s head office returned to remote work protocols. All of TransAlta’s offices and sites follow strict health screening and social distancing protocols with personal protective equipment readily available and in use. Further, TransAlta maintains travel bans aligned to local jurisdictional guidance, enhanced cleaning procedures, revised work schedules, contingent work teams and the reorganization of processes and procedures to limit contact with other employees and contractors on-site.
While our 2020 results have been impacted by price and demand weakness as a result of COVID-19, all of our facilities continue to remain fully operational and capable of meeting our customers needs. The Company continues to work and serve all of our customers and counterparties under the terms of their contracts. We have not experienced interruptions to service requirements. Electricity and steam supply continue to remain a critical service requirement to all of our customers and have been deemed an essential service in our jurisdictions.
Full-Year 2020 Financial Results Summary
Comparable EBITDA(1,3) for the full year ended Dec. 31, 2020, was $927 million, a decrease of $57 million compared to 2019. After adjusting for the one-time PPA Termination Payment of $56 million that was received in 2019 from the Balancing Pool, and the AESO line loss adjustment of $8 million, comparable EBITDA increased by $7 million compared to 2019. Comparable EBITDA increases were driven by the Wind and Solar segment with the addition of the Big Level, Antrim and Skookumchuck wind facilities and strong wind resource across all regions, the Centralia segment due to increased benefits from dispatch optimization and recovery from a significant loss that was incurred in March 2019 from an isolated and extreme pricing event due to an unplanned forced outage, and a consecutive year of exceptional performance from the Energy Marketing segment in both power and natural gas markets. These gains were offset by a significant comparable EBITDA decline in the Alberta Thermal segment. Alberta Thermal production declines were the key contributor due to higher curtailments and dispatch optimization as a consequence of reduced industrial demand in the province and the impact of COVID-19 on demand generally.
Funds from operations (FFO)(1,3) decreased two per cent to $685 million for the full year compared to $701 million in 2019 excluding PPA Termination Payments. Higher interest expense from the additional tranche of Brookfield financing and the TEC Offering financing was partially offset by realized foreign exchange gains and reduced decommissioning activities resulting from COVID-19.
FCF(1) for the full year ended Dec. 31, 2020, was $358 million, a decrease of $77 million compared to $435 million for 2019. After adjusting for the one-time PPA Termination Payment of $56 million that was received in 2019 from the Balancing Pool, FCF decreased by $21 million from $379 million or five per cent compared to 2019. This was mostly driven by the FFO changes noted above along with higher sustaining capital expenditures from planned outages and final lease payments made on our mining equipment, along with lower distributions to non-controlling interests.
Net loss attributable to common shareholders for 2020 was $336 million compared to earnings of $52 million in 2019.
Net loss attributable to common shareholders has been impacted by higher interest expense associated with the TEC Offering and the second tranche of the Brookfield Investment, higher depreciation from acceleration of the conversion to gas, gains recognized on the Keephills 3 and Genesee 3 asset swap that occurred in 2019, the one-time PPA Termination Payment of $56 million in 2019 and further impacts related to our decisions to accelerate our transition to gas, including:
Higher depreciation as we accelerate the closure of the Highvale mine;
Writedown of $37 million of coal inventory;
Onerous provision of $29 million on the coal supply contract for Sheerness; and
Impairment of $70 million associated with the retirement of Sundance 3.
Fourth Quarter Financial Results Summary
Comparable EBITDA(1) for the three months ended Dec. 31, 2020 was $234 million, a decrease of $9 million compared to the same period in 2019. Comparable EBITDA decrease was mainly driven by non-recurring items mostly impacting the Wind and Solar segment which include the additional AESO line loss provisions recognized in 2020 and insurance recoveries relating to tower fires received in 2019. The declines were also contributed by the Alberta Thermal segment mainly due to lower production driven by higher planned and unplanned outages and increased fuel cost resulting from the acceleration of the Highvale mine closing. These declines were offset by growth in the Wind & Solar with the additions of Big Level, Antrim and Skookumchuck wind facilities, and strong resource production in all regions along with growth in the North American Gas segments with the addition of the Ada cogeneration facility.
FFO(1) for the three months ended Dec. 31, 2020, decreased by 15 per cent to $161 million. Higher interest expense from the additional tranche of Brookfield and the TEC Offering financings, and higher non-cash items were partially offset by reduced decommissioning activities resulting from COVID-19.
FCF(1) for the three months ended Dec. 31, 2020, was $52 million compared to $121 million for 2019. In addition to the reductions in FFO noted above, the remaining changes in FCF was driven by higher sustaining capital in quarter from the Sundance 6 planned outage, final settlement of lease payments at Highvale mine and timing of distributions to non-controlling interest partners.
Net loss attributable to common shareholders in the fourth quarter of 2020 was $167 million compared to net earnings of $66 million in the same period of 2019, a decrease of $233 million. The net loss in 2020 was impacted by lower availability, which reduced revenues, the additional coal inventory writedowns of $15 million from an increased cost of coal and higher depreciation from the acceleration of the Highvale mine closure of $8 million, the onerous contract provision recognized on the coal contract for Sheerness for $29 million and higher interest expense associated with the TEC Offering and the second tranche of the Brookfield Investment, partially offset by lower asset impairments. The prior year benefited from the gain on the termination of the Keephills 3 coal rights contract of $88 million and the gain on the sale of Genesee 3 of $77 million.
2021 Outlook
The Company announced its 2021 outlook with comparable EBITDA estimated to be between $960 to $1,080 million. The midpoint of the range represents a 10 per cent increase over 2020 results. The Company expects comparable EBITDA to increase due to a number of factors.
We expect power to be offered, dispatched and optimized in a more commercial manner in Alberta with power prices more in line with longer-term historical averages with the expiry of the remaining Alberta power purchase arrangements (the Alberta PPAs) at certain thermal facilities and transfer of dispatch control away from the Balancing Pool and to the asset owners. Power prices are also expected to be influenced by higher carbon compliance costs and expected demand recovery relative to the economy-wide closures from COVID-19 during most of 2020.
Expiry of the Alberta PPAs at our Hydro facilities will step-up comparable EBITDA driven by the removal of previous PPA obligation payments (net of capacity payments).
Full year contribution of the Skookumchuck wind facility and Ada cogeneration facility.
Windrise reaches commercial operations during the second half of 2021.
The Company expects sustaining capital to be in the elevated range of $175 million to $210 million, an increase to 2020 levels. This is driven by a considerable number of planned outages in 2021, namely the three outages in the Alberta Thermal fleet ($65 million to $75 million) to undertake the conversions to gas and other turnaround maintenance. The Company presently has Sheerness 1 on outage (carried out by our partner), and Keephills 2 outage is scheduled for an outage in mid-March, and the Keephills 3 outage is planned for mid-September. Both Keephills 2 and Keephills 3 outages are each estimated to take approximately 56 days.
FCF is expected to be between $340 million and $440 million. The midpoint of the range represents a 9 per cent increase over 2020 results.
The following table provides additional details pertaining to our 2021 outlook:
Measure(CA$ millions unless otherwise noted)
Target
Comparable EBITDA
$960 to $1,080
FCF
$340 to $440
Range of key power price assumptions:
Market
Power Prices ($/MWh)
Alberta Spot
$58 to $68
Mid-C Spot (US$)
$25 to $35
Other assumptions relevant to 2021 financial outlook:
Sustaining capital
$175 to $210
Energy marketing gross margin
$90 to $110
2021 Objectives
In addition to meeting the financial targets defined in the outlook, our efforts in 2021 will move us closer to 100 per cent clean electricity by 2025. Our teams are focused on the following:
Successfully complete off coal transition strategy
Lead in E2SG policy development
Optimize our business in the Alberta merchant market
Grow our customer-centric green power solutions business
Advance and expand our renewables business
Advance and expand our on-site generation business
Maintain a strong financial position
Maintain a robust COVID-19 response and recovery
2021+ E2SG & Sustainability Targets
The Company has also established ambitious economic, environment, social and governance (E2SG) objectives. Our 2021 sustainability targets support the long-term success of our business and highlight our future ESG value proposition.
Summary highlights of our 2021+ targets are outlined below and further details can be found in our 2020 Annual Integrated Report.
Environment
We will discontinue coal power generation in Canada by the end of 2021 and we will have no further coal generation by the end of 2025
We will continue to develop new renewable projects that support customer sustainability goals to achieve both long-term power price affordability and carbon reductions
By 2021, we will reduce our waste generation by 80 per cent over 2019 levels
By 2026, we will achieve a 95 per cent reduction of SO2 emissions, an 80 per cent reduction of NOx emissions below 2005 levels and reduce water consumption by 20 million m3 over 2015 levels
By 2030, we will achieve company-wide GHG reductions of 60 per cent below 2015 levels and by 2050, we will achieve carbon neutrality
Social
We are committed to achieving at least 40 per cent female employment among all employees by 2030
We have an ongoing commitment to maintain equal pay for women in equivalent roles as men
We continue to support equal access to all levels of education for youth and Indigenous peoples through financial support and employment opportunities
We are committed to providing Indigenous cultural awareness training to all TransAlta employees by the end of 2023
Governance
We are committed to achieving 50 per cent female representation on the Board by 2030
We are committed to maintaining our position as a leader on integrated E2SG disclosure
Comparable EBITDA by Segment (in CA$ millions)
3 Months EndedDec. 31, 2020
3 Months EndedDec. 31, 2019
Year EndedDec. 31, 2020
Year EndedDec. 31, 2019
Hydro
22
18
105
110
Wind and Solar
77
80
248
231
North American Gas
32
29
117
120
Australian Gas
31
28
124
118
Alberta Thermal(3)
41
55
162
263
Centralia
30
29
139
73
Energy Marketing
23
26
113
89
Corporate
(22)
(22)
(81)
(76)
Total Comparable EBITDA(1,3)
234
243
927
928
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 trends more readily in comparison with prior periods results. Please refer to the Discussion of Consolidated Financial Results section of this MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS. See also the Additional IFRS measures and Non-IFRS Measures section of this MD&A. (2) Availability and production includes all generating assets under generation operations that we operate and finance leases and excludes hydro assets and equity investments. Production includes all generating assets, irrespective of investment vehicle and fuel type. (3) Excludes the $56 million PPA Termination Payment received from the Balancing Pool for the early termination of Sundance B and C PPAs received following the successful outcome of the dispute with the Balancing Pool in the third quarter of 2019 (the PPA Termination Payment). (4) Dividends declared vary year over year due to timing of declarations. (5) Weighted average of the Series A, B, C, E, and G preferred share dividends declared. Dividends declared vary year over year due to timing of dividend declarations.
Hydro: Comparable EBITDA for the year ended Dec. 31, 2020 decreased by $5 million compared to 2019 driven by lower revenues driven by lower realized energy and ancillary prices in the Alberta market which were partially offset by higher water resources and a favourable out-of-period transmission line loss recovery.
Wind and Solar: Comparable EBITDA for the year ended Dec. 31, 2020, increased by $17 million compared to 2019, primarily due to the full-year addition of the Big Level and Antrim wind facilities and higher production from strong wind resource across all regions, in particular Alberta. This was partially offset by an unfavourable out-of-period transmission line loss settlement of $8 million from the AESO in our Alberta fleet, insurance proceeds that were received in 2019 of $10 million for tower fires, and planned expiry of certain government power production incentives.
North American Gas: Comparable EBITDA for the year ended Dec. 31, 2020 decreased by $3 million compared to 2019 mainly due to lower earnings at Fort Saskatchewan as the new commercial agreement was negatively impacted by lower merchant pricing in Alberta partially offset by the addition of the Ada cogeneration facility.
Australian Gas: Comparable EBITDA for the year ended Dec. 31, 2020 increased by $6 million compared to 2019, due to the deferral of legal costs associated with a contract dispute, reduced staffing due to cost controls and the strengthening of the Australian dollar against the Canadian dollar.
Alberta Thermal: Excluding the PPA Termination Payments, comparable EBITDA for the year ended Dec. 31, 2020 decreased $101 million compared to 2019. This largely reflects declines in gross margin from reduced production due to curtailments and dispatch optimization resulting from reduced industrial demand in the province and the impact of COVID-19 on demand generally.
Centralia: Comparable EBITDA for the year ended Dec. 31, 2020, increased by $66 million compared to 2019, primarily due to increased benefits from dispatch optimization and a strengthened US dollar relative to the Canadian dollar and as a result from an isolated and extreme pricing event in March 2019 when Centralia was unable to commit one of its units to physical production for day-ahead supply due to an unplanned forced outage repair.
Energy Marketing: Comparable EBITDA for the year ended Dec. 31, 2020 increased by $24 million compared to 2019 results. Results were primarily from continued strong performance in both power and natural gas markets. Gains were realized from short-term strategies across various geographic regions aided by market and price volatility. The Energy Marketing team was able to capitalize on short-term arbitrage opportunities in the markets in which we trade without materially changing the risk profile of the business unit. OM&A spending for 2020 and 2019 was similar.
Corporate: Our Corporate overhead costs for the year ended 2020 were $81 million, compared to $76 million in 2019, with the increase primarily due to realized gains and losses from the total return swap. A portion of the settlement cost of our employee share-based payment plans is fixed by entering into total return swaps, which are cash settled every quarter. Excluding the impact of the total return swap, Corporate overhead costs for 2020 decreased by $10 million compared to 2019, mainly due to lower legal fees and lower labour and reduced travel costs, partially offset by additional costs to support growth and development projects, centralization of shared services to the Corporate segment and additional costs incurred to support COVID-19 protocols.
Fourth Quarter and Year Ended 2020 Highlights
In CA$ millions, unless otherwise stated
3 Months EndedDec. 31, 2020
3 Months EndedDec. 31, 2019
Year EndedDec. 31, 2020
Year EndedDec. 31, 2019
Adjusted availability (%)(2)
87.1%
91.6%
90.3%
90%
Production (GWh)(2)
7,704
8,153
24,980
29,071
Revenues
544
609
2,101
2,347
Fuel, carbon compliance and purchased power
327
286
968
1,086
Operations, maintenance and administration
118
127
472
475
Net earnings (loss) attributable to common shareholders
(167)
66
(336)
52
Cash flow from operating activities
110
181
702
849
Comparable EBITDA(1)
234
243
927
984
FFO(1)
161
189
685
757
FCF(1)
52
121
358
435
FCF excluding the PPA Termination Payments(1,3)
52
121
358
379
Net earnings (loss) per share attributable to common shareholders, basic and diluted
$(0.61)
$0.24
$(1.22)
$0.18
FFO per share(1)
$0.59
$0.67
$2.49
$2.67
FCF per share(1)
$0.19
$0.43
$1.30
$1.54
FCF per share excluding PPA Termination Payments(1,3)
$0.19
$0.43
$1.30
$1.34
Dividends declared per common share(4)
$0.09
$0.04
$0.22
$0.12
Dividends declared per preferred share(5)
$0.50
$0.26
$1.27
$0.78
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 trends more readily in comparison with prior periods results. Please refer to the Discussion of Consolidated Financial Results section of this MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS. See also the Additional IFRS measures and Non-IFRS Measures section of this MD&A. (2) Availability and production includes all generating assets under generation operations that we operate and finance leases and excludes hydro assets and equity investments. Production includes all generating assets, irrespective of investment vehicle and fuel type. (3) Excludes the $56 million PPA Termination Payment received from the Balancing Pool for the early termination of Sundance B and C PPAs received following the successful outcome of the dispute with the Balancing Pool in the third quarter of 2019 (the PPA Termination Payment). (4) Dividends declared vary year over year due to timing of declarations. (5) Weighted average of the Series A, B, C, E, and G preferred share dividends declared. Dividends declared vary year over year due to timing of dividend declarations.
TransAlta is in the process of filing its Annual Information Form, Audited 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 transalta.com or through SEDAR at www.sedar.com.
TransAlta will also be filing its Form 40-F with the U.S. Securities and Exchange Commission. The form will be available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request.
Conference call
TransAlta will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, March 3, 2021, to discuss our fourth quarter and full year 2020 results. The call will begin with a short address by Dawn Farrell, President and CEO, John Kousinioris, Chief Operating Officer and Todd Stack, EVP 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.
Dial-in numbers Fourth Quarter and Full Year 2020 Results:
Toll-free North American participants call: 1-888-231-8191
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 7436819 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
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: ceasing firing with coal in Canada by the end of 2021; the closing of the sale of the Pioneer Pipeline to ATCO, including the timing thereof; the Company delivering a stronger year in 2021; the Sundance 5 Repowering, including the cost thereof and the timing for commercial operation; the conversion of certain coal units to natural gas and the timing and cost associated therewith; the repowering of Keephills Unit 1; the Windrise wind project, including the commercial operation date; emissions reduction initiatives, including those being evaluated with BHP; the Company’s outlook for 2021, including 2021 comparable EBITDA between $960 to $1,080 million, sustaining capital between $175 million to $210 million, and FCF to be within the $340 million to $440 million range; the Sheerness facility discontinuing firing with coal by end of 2021; the Company’s objectives, including completing the Clean Energy Investment Plan, advancing and expanding the renewable business, and maintaining a strong financial position; expectations regarding Alberta market behavior in 2021; impact of carbon compliance costs on power price; power demand recovery in 2021; timing of outages in 2021; and our ability to achieve our sustainability targets. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Corporation’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: energy marketing achieving gross margin of $90 million to $110 million; Alberta spot pricing being $58/MWh to $68/MWh; Mid-C pricing be $25/MWh to $35/MWh; power prices to be influenced due to higher carbon compliance costs and expected demand recovery relative to the economy-wide closures from COVID-19 during most of 2020; and Windrise achieving commercial operation in the second half of 2021. These forward-looking statements are not historical facts but are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made, including, but not limited to, the current political and regulatory environment, the price of power in Alberta and the condition of the financial markets. 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: operational risks involving our facilities; changes in market prices where we operate; unplanned outages at generating facilities and the capital investments required; equipment failure and our ability to carry out repairs in a cost effective and timely manner; the effects of weather, catastrophes and public health crises; disruptions in the source of thermal fuels, water, solar or wind required to operate our facilities, including the necessary natural gas supply to support the conversion of the coal units; energy trading risks; failure to obtain necessary regulatory approvals in a timely fashion, or at all; negative impact to our credit ratings; legislative or regulatory developments and their impacts; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange rates; inflation levels and commodity prices; general economic conditions in the geographic areas where TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables, including those pertaining to the Brookfield investment and the commissioning of South Hedland; 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 MD&A and Annual Information Form for the year ended December 31, 2020. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are 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 and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Corporation Provides Conversion Right and Dividend Rate Notice for Series A and B Preferred Shares
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) announced today that it does not intend to exercise its right to redeem all or any portion of the currently outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series A (Series A Shares) (TSX: TA.PR.D) and the Cumulative Redeemable Floating Rate First Preferred Shares, Series B (Series B Shares) (TSX: TA.PR.E) on March 31, 2021 (the Conversion Date).
As a result, and subject to certain conditions, the holders of the Series A Shares will have the right to elect to: (a) retain any or all of their Series A Shares and continue to receive a fixed rate quarterly dividend; or (b) convert all or any of their Series A Shares into Series B Shares on the basis of one Series B Share for each Series A Share on the Conversion Date and receive a floating rate quarterly dividend.
Comparably, subject to certain conditions, the holders of the Series B Shares will have the right to elect to: (a) retain any or all of their Series B Shares and continue to receive a floating rate quarterly dividend; or (b) convert all or any of their Series B Shares into Series A Shares on the basis of one Series A Share for each Series B Share on the Conversion Date and receive a fixed rate quarterly dividend.
As provided in the share terms, the foregoing conversion right is subject to the conditions that: (i) if TransAlta determines that there would remain outstanding immediately following the conversion, less than 1,000,000 Series A Shares, holders of Series B Shares shall not be entitled to convert their shares into Series A Shares, and the remaining Series A Shares will automatically convert to Series B Shares, on the Conversion Date; or (ii) if TransAlta determines that there would remain outstanding immediately after the conversion, less than 1,000,000 Series B Shares, holders of Series A Shares shall not be entitled to convert their shares into Series B Shares, and the remaining Series B Shares will automatically convert to Series A Shares, on the Conversion Date. There are currently 10,175,380 Series A Shares outstanding and 1,824,620 Series B Shares.
Should a holder of Series A Shares choose to retain their shares, such shareholders will receive quarterly fixed dividend rate applicable to Series A Shares of 0.71925% (2.87700% on an annualized basis) for the five-year period from and including March 31, 2021 to but excluding March 31, 2026. Should a holder of Series A Shares choose to convert their shares to Series B Shares, the Series B Shares that may be issued on the Conversion Date will receive the floating quarterly dividend rate applicable to the Series B Shares of 0.52431% (2.10300% on an annualized basis) for the three-month period from and including March 31, 2021 to but excluding June 30, 2021. The floating dividend rate will be reset every quarter.
Should a holder of Series B Shares choose to retain their shares, such shareholders will receive the floating quarterly dividend rate applicable to Series B Shares of 0.52431% (2.10300% on an annualized basis) for the three-month period from and including March 31, 2021 to but excluding June 30, 2021. The floating dividend rate will be reset every quarter. Should a holder of Series B Shares choose to convert their shares to Series A Shares, holders of Series A Shares will receive the new fixed quarterly dividend rate applicable to the Series A Shares of 0.71925% (2.87700% on an annualized basis) for the five-year period from and including March 31, 2021 to but excluding March 31, 2026.
The Series A Shares and Series B Shares are issued in book entry only form and must be purchased or transferred through a participant in the CDS depository service (CDS Participant). All rights of holders of Series A Shares and Series B Shares must be exercised through CDS or the CDS Participant through which the shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series A Shares into Series B Shares, or Series B Shares into Series A Shares, as applicable, is 3:00 p.m. (MST) / 5:00 p.m. (EST) on March 16, 2021. Any notices received after this deadline will not be valid. As such, holders of Series A Shares or Series B Shares who wish to exercise their right to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done as soon as possible and well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.
If TransAlta does not receive an election notice from a holder of Series A Shares or Series B Shares during the time fixed therefor, then such shares shall be deemed not to have been converted (except in the case of an automatic conversion described above). Holders of the Series A Shares and the Series B Shares will have the opportunity to convert their shares again on March 31, 2026, and every five years thereafter as long as the shares remain outstanding. For more information on the terms of the Series A Shares and the Series B Shares, please see TransAlta’s articles of amalgamation, including the share terms and shares in series schedule attached thereto as Schedule A, which are available on the Company’s website under Governance.
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 clean, 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 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Information
This news release contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as may, will, should, estimate, intend or other similar words). Specifically, this news release contains forward-looking information with respect to the Company, the Series A Shares and the Series B Shares, including but not limited to future conversions, redemptions and dividends. All forward-looking information reflect the Company’s beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this press release. TransAlta undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from those in the forward-looking information, refer to the Company’s Annual Report and Management’s Discussion and Analysis, and the risks set out in the prospectus supplement dated Dec. 3, 2010 relating to the issuance of the Series A Shares, filed under the Company’s profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov.
Media Advisory: TransAlta and TransAlta Renewables Fourth Quarter and Full Year 2020 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its fourth quarter and full year 2020 results before markets open on Wednesday, March 3, 2021. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) will release its fourth quarter and full year 2020 results before markets on Wednesday, March 3, 2021. Questions regarding TransAlta Renewables may be asked on the TransAlta conference call.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company.
Fourth Quarter and Full Year 2020 Conference Call:
Toll-free North American participants call: 1-888-231-8191
Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 7436819 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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 clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management, having recently achieved an A- score from CDP.
For more information about TransAlta, visit its web site at transalta.com.
