TransAlta Reports Second Quarter 2018 Results

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TransAlta Reports Second Quarter 2018 Results

Second Quarter 2018 Financial Highlights

  • Funds from operations were $188 million, in line with the same period last year; and
  • Free cash flow was $96 million compared to $30 million in 2017, a 220% increase.

 

Year-to-Date 2018 Financial and Operating Highlights

  • Free cash flow increased $209 million to $334 million compared to the same period last year;
  • Net debt lower by $345 million in the first six months, resulting in Net Debt / EBITDA ratio of 3.0x
  • Acquired two construction ready wind projects in the United States

TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today reported second quarter 2018 financial results that demonstrate our progress of increasing free cash flow(1), improving operating performance, reducing corporate debt, and advancing the transition to clean power generation.

Free cash flow was higher by $66 million and $209 million respectively, for the three and six months ended June 30, 2018.  During the second quarter, all generating segments, except Canadian Coal, contributed cash flow in line with or better than last year.  On a year to date basis, Canadian Coal benefitted from the one-time payment in the first quarter for the early termination of the Sundance B and C Power Purchase Arrangements (PPAs), as well as reduced capital requirements due to the retirement of Sundance Unit 1 and the mothballing of Sundance Units 2, 3, and 5.  Strong contributions from our Hydro and Canadian Gas segments were driven by increases in prices for power and ancillary services in Alberta.   Based on our outlook for the balance of the year, we are tracking to achieve the upper end of our free cash flow guidance of $300 million to $350 million.

Our debt repayment strategy is progressing well, and we are ahead of plan in reducing net debt and strengthening our balance sheet.  During the quarter we reduced net debt by an additional $63 million, bringing our total net debt reduction for the year to $345 million.  Subsequent to the quarter we exercised the early redemption of our $400 million 6.40 per cent bond due in 2019 with the proceeds from our off-coal bond offering of approximately $345 million at a rate of 4.509 per cent.  Since 2015 we have eliminated $1.2 billion in debt and intend to use our strong cash flow to finance the repayment of our next bond maturity due in 2020.

€œCash flows were stronger than we expected for the first half of the year due to exceptional performance from the Alberta hydro assets,- said Dawn Farrell, President and Chief Executive Officer. €œSubsequent to the quarter, we retired our $400 million bond and now have one of the strongest balance sheets in the industry.€

 

Other Highlights

  • Entered into a transaction to transfer the economic interest in the Lakeswind Wind Farm and solar projects located in Massachusetts, and ownership of the Kent Breeze Wind Farm, to TransAlta Renewables. The total purchase price for this transaction was $166 million, which includes the assumption of $62 million of tax equity and debt.
  • Purchased and cancelled 587,300 common shares at an average price of $6.77 per share during the first half of the year through our Normal Course Issuer Bid which commenced March 14, 2018.
  • TransAlta’s interest in TransAlta Renewables was reduced from approximately 64 per cent to 61 per cent as a result of TransAlta Renewables bought deal offering of 11,860,000 common shares, which were issued at $12.65 per share for gross proceeds of approximately $150 million.

 

Subsequent Events

  • Retired the previously mothballed Sundance Unit 2 due to its relatively short useful life, small size relative to other units, and the capital required to return the unit to service.
  • Exercised the early redemption of the outstanding 6.40 per cent debentures due November 2019 for approximately $425 million funded through the proceeds of the July 20th, 2018 off-coal bond offering of approximately $345 million at a rate of 4.509 per cent per annum.

 

Second Quarter 2018 Review by Segment 

Comparable EBITDA
(in CAD$ millions)		 3 Months Ended 6 Months Ended
June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Canadian Coal  43 85   265(a) 176
U.S. Coal 18 34 45 44
Canadian Gas 62 57 127 145(b)
Australian Gas 31 32 62 63
Wind and Solar 34 42 99 110
Hydro 49 28 66 42
Energy Marketing 8 12 17 8
Corporate (20) (22) (40) (46)
Total Comparable EBITDA 225 268 641 542
a)     Includes $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs.
b)     Includes $34 million payment from the OEFC relating to the settlement of an indexation dispute.

 

  • Canadian Coal: Excluding the $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs, comparable EBITDA for the three and six months ended June 30, 2018 decreased $42 million and $68 million respectively, compared to 2017. Gross margin was negatively impacted by the expiry of the Sundance A PPA and the termination of the Sundance B and C PPAs.
  • U.S. Coal: Comparable EBITDA for the quarter decreased $16 million but was flat on a year-to-date basis, compared to 2017. The reduction in EBITDA during the quarter was primarily due to unfavorable mark-to-market positions on forward financial contracts.
  • Canadian Gas: Comparable EBITDA for the three months ended June 30, 2018 increased by $5 million compared to 2017, due to higher realized margins in 2018 and cost reduction initiatives. On a year-to-date basis, comparable EBITDA decreased by $18 million, mainly due to the $34 million contract indexation dispute settlement received in 2017, which was partially offset by higher margins received in 2018.
  • Australian Gas: Comparable EBITDA for both the three and six months ended June 30, 2018 were in line with the same periods in 2017. The addition of South Hedland was largely offset by the loss of the contribution from the Solomon Power Station contract.
  • Wind and Solar: Comparable EBITDA for the three and six months ended June 30, 2018 were down $8 million and $11 million respectively, compared to 2017, mainly due to the recognition of unrealized mark-to-market losses this period partially offset by favourable pricing.
  • Hydro: Comparable EBITDA for the three and six months ended June 30, 2018 increased $21 million and $24 million respectively, compared to 2017, primarily due to an increase in revenues from ancillary services at higher market prices, which more than offset the lower generation.
  • Energy Marketing: For the three months ended June 30, 2018 comparable EBITDA was lower compared to the same period in 2017 due to less favourable market dynamics. Year-to-date, comparable EBITDA was up $9 million compared to 2017 reflecting a return to typical returns after weak performance in the first quarter of 2017.
  • Corporate: Our Corporate overhead costs of $20 million and $40 million for the second quarter and year-to-date respectively, were reduced by $2 million and $6 million, compared to 2017, due to lower incentive payments and cost reduction initiatives.

 

Consolidated Earnings Review

The net loss attributable to common shareholders during the second quarter of 2018 was $105 million compared to a net loss of $18 million in 2017.  For the six months ended June 30, 2018, the net loss was $40 million compared to a loss of $18 million for the same period in 2017. The higher net loss in 2018 compared to 2017 was due primarily to lower comparable EBITDA and lower finance lease income related to the sale of the Solomon facility.

Minimal planned major maintenance capital was invested during the first two quarters of 2018, resulting in total sustaining capital for the three and six months periods ending June 30, 2018 being $48 million and $70 million lower than the comparable periods in 2017, respectively. Total capital expenditures for the year are still expected to be in line with our previous guidance of $215 to $235 million.

 

Operating Review

Adjusted availability for the three and six months ended June 30, 2018 were 85.8 per cent and 90.1 per cent, respectively, compared to 84.0 per cent and 86.2 per cent for the same periods in 2017.  The increase is primarily due to a reduction in the number of unplanned outages compared to the first half of 2017.

Production for the three and six months ended June 30, 2018 decreased 2,509 GWh and 4,388 GWh, respectively, compared to 2017, despite higher availability, primarily due to the Sundance units becoming merchant, which resulted in less dispatching.

 

Second Quarter and YTD 2018 Financial and Operational Highlights 

In $CAD millions, unless otherwise stated 3 Months Ended 6 Months Ended
June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Adjusted availability (%)(2,3)

 

 85.8% 84.0% 90.1% 86.2%
Production (GWh) (3) 5,198 7,707 12,370 16,758
Revenue 446 503 1,034 1,081
Comparable EBITDA 225 268 641 542
Net Earnings (loss) attributable to common shareholders (105) (18) (40) (18)
Funds from operations 188 187 506 389
Cash Flow from Operating Activities 104 63 529 344
Free Cash Flow 96 30 334 125
Net Earnings (loss) per common share attributed to common shareholders ($0.36) ($0.06) ($0.14) ($0.06)
Funds from operations per share $0.65 $0.65 $1.76 $1.35
Free cash flow per share $0.33 $0.10 $1.16 $0.43
Dividends declared per common share $0.04 $0.04 $0.08 $0.04

 

Notes

(1) These items are not defined 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. Refer to the Funds from Operations and Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.

(2) Availability and production includes all generating assets (generation operations and finance leases that we operate).

(3) Adjusted for economic dispatching at U.S. Coal.

TransAlta is in the process of filing its 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 and EDGAR at www.sec.gov/edgar.shtml.

 

Conference call

We will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, August 3, 2018, to discuss our second quarter 2018 results.  The call will begin with a short address by Dawn Farrell, President and CEO, and Brett Gellner, Interim 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.  Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation€ as the company and €œSally Taylor€ as moderator.

Dial-in numbers Second Quarter 2018 Results:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450

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 8876455 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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.

For more information about TransAlta, visit our web site at transalta.com.

Cautionary Statement Regarding Forward Looking Information

This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as €œplans€, €œexpects€, €œproposed€, €œwill€, €œanticipates€, €œdevelop€, €œcontinue€, and similar expressions suggesting future events or future performance. In particular, this news release contains forward looking statements including, without limitation, statements pertaining to TransAlta’s business and anticipated future financial performance; our strategy, including as it relates to increasing free cash flow, improving operating performance, reducing corporate debt and advancing the transition to clean power generation; our 2018 financial outlook, including expected free cash flow and achieving the upper end of our free cash flow guidance of $300 to $350 million; utilizing strong cash flow to finance the repayment of our next bond maturity due in 2020;  and the acquisition and development of two construction ready wind farms in the US, including the satisfaction of the closing conditions pertaining to one of the wind farms.  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. 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; disruptions in the source of fuels, water or wind required to operate our facilities; energy trading risks; failure to obtain necessary regulatory approvals in a timely fashion; negative impact to our credit ratings; legislative or regulatory developments and their impacts, including as it pertains to the capacity market being developed in Alberta; 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 South Hedland; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian 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, 2017. 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 financial outlook that is contained in this news release is being provided for the purpose of giving the reader information about management’s current expectations and plans. 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.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Declares Dividends 

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TransAlta Reports Second Quarter 2018 Results

The Board of Directors of TransAlta Corporation (TSX: TA; NYSE: TAC) today declared a quarterly dividend of $0.04 per common share payable on October 1, 2018 to shareholders of record at the close of business on September 4, 2018.

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 June 30, 2018 up to but excluding September 30, 2018:

Preferred Shares TSX Stock Symbol Dividend Rate Dividend Per Share Record Date Payment Date
Series A TA.PR.D 2.709% $0.16931 September 4, 2018 September 30, 2018
Series B* TA.PR.E 3.330% $0.20984 September 4, 2018 September 30, 2018
Series C TA.PR.F 4.027% $0.25169 September 4, 2018 September 30, 2018
Series E TA.PR.H 5.194% $0.32463 September 4, 2018 September 30, 2018
Series G TA.PR.J 5.300% $0.33125 September 4, 2018 September 30, 2018

*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 Corporation (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 wind, hydro, solar, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives. TransAlta has been recognized on CDP’s Canadian Climate Disclosure Leadership Index (CDLI), which includes Canada’s top 20 leading companies reporting on climate change, and has been selected by Corporate Knights as one of Canada’s Top 50 Best Corporate Citizens and is recognized globally for its leadership on sustainability and corporate responsibility standards by FTSE4Good.

For more information about TransAlta, visit our web site at www.transalta.com or follow us on Twitter @TransAlta.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Announces $345 Million Financing and the Early Redemption of $400 Million of Medium Term Notes 

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TransAlta Reports Second Quarter 2018 Results

TransAlta Corporation (TransAlta) (TSX: TA, NYSE: TAC) today announced that its indirect wholly-owned subsidiary, TransAlta OCP LP (the €œIssuer), has priced an approximately $345 million bond offering, by way of a private placement, which will be secured by, among other things, a first ranking charge over all but a nominal percentage of the equity interests in the Issuer and its general partner, and a first ranking charge over all of the Issuer’s accounts and certain other assets  (the €œFinancing).

The amortizing bonds will bear interest from their date of issue at a rate of 4.509% per annum, payable semi-annually and maturing on August 5, 2030. The bonds have a preliminary rating of BBB, with a Stable trend, by DBRS.*

Closing of the Financing is expected to occur on or around July 20, 2018.

TransAlta also announced today that it will redeem all of its outstanding 6.40% Medium Term Notes, due November 18, 2019 in the aggregate principal amount of $400,000,000 (the €œNotes). The redemption price will be $1,061.736 per $1,000 principal amount of the Notes (representing, in aggregate, $424,694,410.96) including accrued and unpaid interest on the Notes.

The Issuer will use the net proceeds of the Financing to make an initial advance to TransAlta pursuant to an intercompany loan agreement between the Issuer and TransAlta.  The proceeds advanced to TransAlta by the Issuer will be used to partially fund the redemption price of the Notes.

TransAlta has delivered a notice in respect of the redemption pursuant to the indenture governing the Notes.  The redemption date for the Notes is August 2, 2018.

The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended, any state securities laws or the laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The securities mentioned herein have not been and will not be qualified for distribution to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. The securities will be offered and sold in Canada on a private placement basis only to €œaccredited investors€. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

*Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.

For more information about TransAlta, visit our web site at transalta.com.

Cautionary Statement Regarding Forward-Looking Information

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words €œexpect€, €œanticipate€, €œcontinue€, €œestimate€, €œmay€, €œwill€, €œproject€, €œshould€, €œpropose€, €œplans€, €œintends€ and similar expressions are intended to identify forward-looking information or statements. More particularly, this press release contains forward-looking statements and information relating to: the size, price and closing of the Financing, the use of proceeds of the Financing and the Company’s strategy of debt reduction and source of funds for the redemption of the Notes. These statements are based on TransAlta’s beliefs and assumptions based on information available at the time the assumptions were made and reflect TransAlta€˜s plans. 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, but are not limited to: delays in, or any failure to complete, the Financing; changes in economic or market conditions; any failure of TransAlta to complete the redemption of the Notes as planned; and the sources of financing for the redemption of the Notes as planned. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only 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

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

Media Advisory: TransAlta Second Quarter 2018 Results and Conference Call

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TransAlta Reports Second Quarter 2018 Results

TransAlta Corporation (TransAlta) (TSX: TA; NYSE: TAC) will release its second quarter 2018 results before market open on Friday, August 3, 2018. 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 at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.

Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation€ as the company and €œSally Taylor€ as moderator.

Dial-in numbers Q2 2018 Results:

Toll-free North American participants call: 1-888-231-8191

Outside of Canada & USA call: 1-647-427-7450

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 8876455 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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.  

For more information about TransAlta, visit our web site at transalta.com.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Renewables Announces the Acquisition of Three Renewable Assets from TransAlta Corporation, Implementation of a Dividend Reinvestment Plan and Declares Dividends 

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TransAlta Reports Second Quarter 2018 Results

TransAlta Renewables Inc. (TransAlta Renewables€ or the €œCompany) (TSX: RNW) and TransAlta Corporation (TSX: TA; NYSE: TAC) today announced that TransAlta Renewables has acquired an economic interest in the 50 MW Lakeswind Wind Farm in Minnesota and 21 MW of solar projects located in Massachusetts, from TransAlta Corporation. In addition, TransAlta Renewables acquired ownership of the 20 MW Kent Breeze Wind Farm located in Ontario. The total purchase price for the three assets, which have an average weighted contract life of 15 years, is $166 million, including the assumption of $62 million of tax equity obligations and project debt. The equity value of $104 million represents a 10x multiple of CAFD and is expected to be accretive on a per share basis. TransAlta Renewables will fund the equity value portion of the acquisition using existing liquidity.

€œThe acquired assets are a natural fit for TransAlta Renewables which focuses on diversified, highly contracted cash flows from strong counterparties€, said John Kousinioris, President of TransAlta Renewables. €œThese drop-downs, along with the two recent U.S. wind projects, demonstrate our ability to execute on accretive, renewable acquisitions.€

Concurrent with the acquisition, the Board of Directors of TransAlta Renewables has approved the implementation of a dividend reinvestment plan (DRIP) for Canadian holders of common shares of TransAlta Renewables. Commencing with the dividend payable on July 31, 2018, to shareholders of record at the close of business on July 13, 2018, eligible shareholders may elect to automatically reinvest monthly dividends into additional common shares of TransAlta Renewables.

The price for common shares purchased under the DRIP will be 98 per cent of the average market price of the common shares for the five trading days on which not less than 500 common shares of the Company are traded immediately prior to the dividend payment date. Common shares acquired under the DRIP will be issued from the treasury of TransAlta Renewables.

Eligible shareholders are not required to participate in the DRIP. Those shareholders who have not elected to participate in the DRIP will continue to receive their monthly cash dividends in the usual manner. TransAlta Corporation, which holds 64 per cent of the outstanding shares of TransAlta Renewables, does not intend to participate in the DRIP.

This news release provides a summary of some of the terms of the DRIP. The DRIP defines the terms and conditions of the DRIP and the rights of eligible participants in the DRIP. Interested shareholders are encouraged to review the full text of the DRIP. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

A complete copy of the DRIP, together with a related series of Questions and Answers, are available on TransAlta Renewables website at www.transaltarenewables.com or can be obtained by calling AST Trust Company, TransAlta Renewables transfer agent at: 1-800-387-0825.

In addition, the Company also declared monthly dividends of $0.07833 per share for holders of record on July 13, 2018, August 15, 2018 and September 14, 2018 payable on each of July 31, 2018, August 31, 2018 and September 28, 2018, respectively.

About TransAlta Renewables Inc.

TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (IPP) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 20 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities, one solar facility and one natural gas pipeline, representing an ownership interest of 2,407 MW of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the State of Wyoming, the State of Massachusetts, the State of Minnesota and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.

 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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business. For more information about TransAlta, visit our web site at transalta.com.

Forward-Looking Statement

This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company and TransAlta Corporation that are based on the Company’s and TransAlta Corporation’s current expectations, estimates, projections and assumptions in light of their experience and perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as €œplans€, €œexpects€, €œproposed€, €œwill€, €œanticipates€, €œdevelop€, €œcontinue€, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, including certain financial outlooks, pertaining to, without limitation, the following: the anticipated benefits to the Company following its acquisition of an interest in the three renewable projects, including that the acquisition will be accretive to cash available for distribution per share; the acquisition of the previously announced U.S. wind project; the source of funding for the purchase price; and the intention of TransAlta Corporation not to participate in the DRIP. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to, the Company’s ability to satisfy the closing conditions for the acquisition of the one U.S. wind project; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the renewable power industry; operational breakdowns, failures, or other disruption; changes in economic and market conditions, and other risks and uncertainties discussed in the Company’s and TransAlta Corporation’s materials filed with the Canadian securities regulatory authorities from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s and TransAlta Corporation’s expectations only as of the date of this news release. TransAlta Renewables and TransAlta Corporation disclaim 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: CAFD refers to cash available for distribution and is not defined under International Financial Reporting Standards (IFRS). Refer to the Non-IFRS Measures section of the Management’s Discussion and Analysis for further discussion of this measure items, including, where applicable, reconciliations to measures calculated in accordance with IFRS. 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 U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Reports First Quarter 2018 Results

Posted on by ta_root

TransAlta Reports Second Quarter 2018 Results

First Quarter 2018 Financial Highlights

  • Comparable EBITDA(1) was up $19 million, or 8%, to $259 million;
  • Free cash flow(1) from ongoing operations increased 2% to $81 million;
  • Total consolidated net debt was reduced by almost $300 million during the quarter; and
  • Receipt of $157 million in early termination payments from the Balancing Pool.

TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today reported first quarter 2018 financial results, with free cash flow(2) of $238 million for the quarter and funds from operations(2) of $318 million, up $142 and $116 million respectively.  The increase in free cash flow and funds from operations was primarily driven by the receipt of $157 million from the Balancing Pool for the early termination of the Sundance B and C Power Purchase Arrangements (PPAs), and the receipt of $17 million (our net share after non-controlling interest) from the Ontario Electrical Financial Corporation (OEFC) during the first quarter of 2017 relating to the settlement of an indexation dispute.  Excluding these two unusual payments in 2018 and 2017, our free cash flow would have been $81 million and $79 million, respectively, while our funds from operations would have been $161 and $168 million, respectively.

Comparable EBITDA(2) for the quarter increased $142 million compared to last year, also mainly due to the one-time cash flows in 2017 and 2018.  Results in the first quarter for Alberta Coal, compared to last year, were impacted by the expiry of the Sundance A PPA and our decision to shut down Sundance Unit 1 and mothball Sundance Unit 2. During the first quarter last year, comparable EBITDA generated by these two units totalled $12 million.

€œResults for the first quarter were strong and a great way to start 2018,- said Dawn Farrell, President and Chief Executive Officer. €œWe progressed our strategy with the announcement of two wind projects, the repayment of US$500 million of debt, and the advancement of a gas pipeline to our plants in Alberta.€

First Quarter Highlights

  • TransAlta Renewables, through a subsidiary of TransAlta, entered into an arrangement to acquire two construction ready wind projects, consisting of a 90 MW project in Pennsylvania and a 29 MW project in New Hampshire, supported by long-term contracts with highly creditworthy counterparties.
  • Repaid our 6.650 per cent US$500 million senior notes, due May 15, 2018, with cash on hand and by drawing down our credit facility.
  • Purchased and cancelled 374,900 common shares at an average price of $6.97 per share through our Normal Course Issuer Bid which commenced March 14, 2018.
  • Received $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs. We are seeking a further $56 million in compensation from the Balancing Pool for the early termination.
  • Mothballed Sundance Units 3 and 5 as part of our optimization plan for the Sundance facility in 2018 and 2019, which will ensure that the two remaining Sundance coal units operate at high capacity utilizations with lower costs through the period to 2020.

Subsequent Events

  • Donald Tremblay, Chief Financial Officer, decided to leave the Company effective May 8, 2018 and will be relocating to eastern Canada to be closer to his family. TransAlta thanks Mr. Tremblay for his contributions and leadership during the past four years, particularly his role managing the company’s debt reduction initiative. TransAlta has commenced a recruitment process for a new Chief Financial Officer. Brett Gellner, Chief Investment Officer, and former Chief Financial Officer, will act as Interim Chief Financial Officer, in addition to his current role.

2018 Outlook

Due to strong performance in the first quarter we are revising our 2018 financial targets as presented below.  This guidance excludes the impact of the $157 million termination payment received from the Balancing Pool during the first quarter.

Measure

Low

High
Comparable EBITDA

$1,000 million

$1,050 million
Funds from operations

$750 million

$800 million
Free cash flow

$300 million

$350 million
Sustaining and Productivity Capital

$215 million

$235 million

Range of key power price assumptions:

Market Power Prices ($/MWh)
Alberta Spot $50 to $60
Alberta Contracted $35 to $40
Mid-C Spot (US$) $20 to $25
Mid-C Contracted (US$) $47 to $53

Other assumptions relevant to 2018 outlook:

Canadian Coal Capacity Factor 65% to 75%
Hydro/Wind Resource

Long term average

Summary of Credit Agency Reviews

DBRS Limited reaffirmed our Unsecured Debt rating and Medium-Term Notes rating as BBB (low), the Preferred Shares rating as Pfd-3 (low), and Issuer Rating as BBB (low).

First Quarter 2018 Review by Segment

Comparable EBITDA
(in CAD$ millions)		 3 Months Ended
March 31, 2018 March 31, 2017
Canadian Coal

   222(a)

91
U.S. Coal

27

10
Canadian Gas

65

   88(b)
Australian Gas

31

31
Wind and Solar

65

68
Hydro

17

14
Energy Marketing

9

(4)
Corporate

(20)

(24)
Total Comparable EBITDA

416

274
a)     Includes $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs.

b)     Includes $34 million payment from the OEFC relating to the settlement of an indexation dispute.
  • Canadian Coal: Comparable EBITDA for the three months ended March 31, 2018 increased $131 million compared to 2017. Comparable EBITDA for the quarter was positively impacted by the $157 million termination payment related to the Sundance B and C PPAs, while gross margin was negatively impacted by the expiry of the Sundance A PPA.
  • S. Coal: Comparable EBITDA increased $17 million compared to 2017, primarily due to our ability to purchase lower cost power to fulfill our contract and hedge obligations, as well as favourable changes to the mark-to-market value of certain forward financial contracts.
  • Canadian Gas: Comparable EBITDA for the first quarter of 2018 decreased by $23 million compared to 2017, mainly due to the $34 million contract indexation dispute settlement received in 2017. This was partially offset by higher margin received in 2018 as a result of the Mississauga re-contracting and the settlement of contract indices adjustments at Sarnia.
  • Australian Gas: Comparable EBITDA for the first three months of 2018 was in line with the same period in 2017. The addition of South Hedland was largely offset by the loss of the contribution from the Solomon Power Station contract.
  • Wind and Solar: Comparable EBITDA for the first quarter of 2018 was down $3 million compared to 2017 mainly due to the recognition of unrealized mark-to-market losses this period.
  • Hydro: Comparable EBITDA for the first quarter this year increased $3 million compared to the first quarter of 2017, primarily due to an increase in revenues from ancillary services, which more than offset the lower generation.
  • Energy Marketing: Comparable EBITDA for the first quarter was $13 million higher than last year, reflecting a return to typical returns after weak performance in the first quarter of 2017.
  • Corporate: Our Corporate overhead costs of $20 million were $4 million lower, due to lower incentive payments, than the comparable period in 2017.

Consolidated Earnings Review

Net earnings attributable to common shareholders during the quarter was $65 million higher than last year mainly due to the $157 million received from the early termination of the Sundance B and C PPAs.

No planned major maintenance capital was invested in the first quarter of 2018, resulting in total sustaining capital for the quarter being $22 million lower than Q1 2017.

 Operating Review

Adjusted availability for the three months ended March 31, 2018 was 93.9 per cent compared to 88.5 per cent for the same period in 2017.  There were no planned outages in the first quarter of 2018 and the number of unplanned outages was reduced compared to the first quarter of 2017.

Production for the three months ended March 31, 2018 decreased 1,880 GWh compared to 2017, despite higher availability, due to the retirement of Sundance Unit 1 and the mothballing of Sundance Unit 2 as well as higher paid curtailments on units under contract.

First Quarter 2018 Financial and Operational Highlights

In $CAD millions, unless otherwise stated

3 Months Ended

March 31, 2018

March 31, 2017
Adjusted availability (%) (3,4)

93.9

88.5
Production (GWh) (4)

7,171

9,051
Revenue

$588

$578
Comparable EBITDA

$416

$274
Net earnings attributable to common shareholder

$65

Funds from operations

$318

$202
Cash Flow from Operating Activities

$425

$281
Free cash flow

$238

$96
Net earnings per common share attributable to common shareholders

$0.23

Funds from operations per share

$1.10

$0.70
Free cash flow per share

$0.83

$0.33
Dividends declared per common share

$0.04

TransAlta is in the process of filing its 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 and EDGAR at www.sec.gov/edgar.shtml.

Conference call

We will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, May 8, 2018, to discuss our first quarter 2018 results.  The call will begin with a short address by Dawn Farrell, President and CEO, and Donald Tremblay, 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.  Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation€ as the company and €œSally Taylor€ as moderator.

Dial-in numbers First Quarter 2018 Results:

Toll-free North American participants call: 1-888-231-8191

Outside of Canada & USA call: 1-647-427-7450

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 8088918 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.

Notes

(1) Excluding one-time positive cash flows due to the Alberta Power Purchase Arrangement terminations in 2018 and the indexation dispute settlement in 2017.

(2) These items are not defined 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. Refer to the Funds from Operations and Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.

(3) Availability and production includes all generating assets (generation operations and finance leases that we operate).

(4) Adjusted for economic dispatching at U.S. Coal.

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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.  

For more information about TransAlta, visit our web site at transalta.com.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors

Posted on by ta_root

TransAlta Reports Second Quarter 2018 Results

TransAlta Corporation (TSX: TA; NYSE: TAC) (TransAlta or the Company) held its Annual and Special Meeting of Shareholders on April 20, 2018 in Calgary, Alberta.  A total of 144,822,873 common shares, representing 50.30% of the shares outstanding were represented in person and by proxy at the meeting.

The following resolutions were considered by Shareholders:

  1. Election of Directors

The ten director nominees proposed by management were elected by a show of hands.  Proxies were received as follows:

Nominee Votes For Per cent Withheld Per cent
Rona H. Ambrose 132,865,050 94.55% 7,651,794 5.45%
John P. Dielwart 133,916,520 95.30% 6,600,324 4.70%
Timothy W. Faithfull 124,933,383 88.91% 15,583,461 11.09%
Dawn L. Farrell 133,862,685 95.26% 6,654,159 4.74%
Alan J. Fohrer 133,876,088 95.27% 6,640,756 4.73%
Gordon D. Giffin 132,761,866 94.48% 7,754,978 5.52%
Yakout Mansour 133,842,136 95.25% 6,674,708 4.75%
Georgia R. Nelson 126,143,038 89.77% 14,373,806 10.23%
Beverlee F. Park 126,679,805 90.15% 13,837,039 9.85%
Bryan D. Pinney 133,904,426 95.29% 6,612,418 4.71%

 

  1. Appointment of Auditors

The appointment of Ernst & Young LLP to serve as the auditors for 2018 was approved by a show of hands.  Proxies were received as follows:

Votes For Per cent Withheld Per cent
141,985,453 98.15% 2,672,377 1.85%

 

  1. Special Resolution on Reduction of Stated Capital

The special resolution on reduction of stated capital was conducted by ballot and the resolution was approved.  The votes by ballot were received as follows:

Votes For Per cent Votes Against Per cent
138,678,687 98.62% 1,933,521 1.38%

 

  1. Advisory Vote on Executive Compensation

The advisory vote on the Company’s approach to executive compensation was conducted by ballot and the resolution was approved.  The votes by ballot were received as follows:

Votes For Per cent Votes Against Per cent
125,154,694 89.01% 15,457,514 10.99%

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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.  

For more information about TransAlta, visit our web site at transalta.com.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

Media Advisory: TransAlta Corporation Annual and Special Meeting of Shareholders, First Quarter 2018 Results and Conference Call

Posted on by ta_root

TransAlta Reports Second Quarter 2018 Results

TransAlta Corporation (TransAlta) (TSX: TA; NYSE: TAC) will hold its Annual and Special Meeting of Shareholders on Friday, April 20, 2018 at 10:00 a.m. MT (12:00 p.m. ET) in the Palomino Room (E-H) at the BMO Centre (Stampede Park) in Calgary, Alberta. The Annual and Special Meeting will be broadcast via webcast and conference call. To access the broadcast, please visit https://transalta.com/investors/events-and-presentations/ or use the dial-in information provided below.

Dial-in number Annual and Special Meeting of Shareholders:

Toll-free North American participants call: 1-855-353-9183 (Code 25669#)

TransAlta will release its first quarter 2018 results before market open on Tuesday, May 8, 2018. 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 at 9:00 a.m. Mountain (11:00 a.m. ET). The media will be invited to ask questions following analysts.

Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation€ as the company and €œSally Taylor€ as moderator.

Dial-in numbers First Quarter 2018 Results:

Toll-free North American participants call: 1-888-231-8191

Outside of Canada & USA call: 1-647-427-7450

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 8088918 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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.  

For more information about TransAlta, visit our web site at transalta.com.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Declares Dividends

Posted on by ta_root

TransAlta Reports Second Quarter 2018 Results

The Board of Directors of TransAlta Corporation (TSX: TA; NYSE: TAC) today declared a quarterly dividend of $0.04 per common share payable on July 3, 2018 to shareholders of record at the close of business on June 1, 2018.

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, 2018 up to but excluding June 30, 2018:

Preferred Shares TSX Stock Symbol Dividend Rate Dividend Per Share Record Date Payment Date
Series A TA.PR.D 2.709% $0.16931 June 1, 2018 July 3, 2018
Series B* TA.PR.E 3.201% $0.19951 June 1, 2018 July 3, 2018
Series C TA.PR.F 4.027% $0.25169 June 1, 2018 July 3, 2018
Series E TA.PR.H 5.194% $0.32463 June 1, 2018 July 3, 2018
Series G TA.PR.J 5.300% $0.33125 June 1, 2018 July 3, 2018

*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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.  

For more information about TransAlta, visit our web site at transalta.com.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com

TransAlta Announces Redemption Price in Respect of its 6.650% Senior Notes due 2018 

Posted on by ta_root

TransAlta Reports Second Quarter 2018 Results

TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) announces that pursuant to its notice dated February 2, 2018 (the €œNotice) relating to the redemption of all of its outstanding 6.650% Senior Notes due 2018 (the €œNotes), the redemption price for the Notes will be US$515,610,000. This redemption price consists of the sum of the present values of the remaining scheduled payments of principal and interest on the Notes (exclusive of interest accrued to the redemption date) of US$504,110,000 (based on a benchmark treasury rate of 1.508% plus 45 basis points), plus US$11,500,000 in accrued and unpaid interest to the redemption date for the Notes, all as calculated in accordance with the terms of the indenture governing the Notes.

The redemption date for the Notes is March 15, 2018, as set forth in the Notice.

€œThe repayment of these notes reflects our focus to reduce our corporate debt,- said Donald Tremblay, Chief Financial Officer. €œWe will fund the maturity with approximately $300 million of cash on hand, proceeds from the Sundance PPA termination, expected at the end of March, and our credit facility.  Over the past two years we have reduced our debt by $900 million and we are committed to our deleveraging strategy over the next three years.€

This press release does not constitute an offer to sell or buy or the solicitation of an offer to buy or sell any security and shall not constitute an offer, solicitation, sale or purchase of any securities in any jurisdiction in which such offering, solicitation, sale or purchase would be unlawful.

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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are 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 we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.

For more information about TransAlta, visit our web site at transalta.com.

Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words €œexpect€, €œanticipate€, €œcontinue€, €œestimate€, €œmay€, €œwill€, €œproject€, €œshould€, €œpropose€, €œplans€, €œintends€ and similar expressions are intended to identify forward-looking information or statements.  More particularly, this press release contains forward-looking statements and information relating to: the redemption price for, and timing of, the redemption of the Notes; and the Company’s strategy of debt reduction and source of funds for the repayment of the Notes. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made and reflect TransAlta€˜s plans. 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, but are not limited to: any failure of TransAlta to complete the redemption of the Notes as planned; and the sources of financing for the redemption of the Notes as planned.  Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only 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.

For more information:

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: investor_relations@transalta.comEmail: ta_media_relations@transalta.com
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