TransAlta to Acquire Heartland Generation from Energy Capital Partners at a Reduced Price of $542 Million

Posted on by Ben Harris

TransAlta to Acquire Heartland Generation from Energy Capital Partners at a Reduced Price of $542 Million

Highlights

  • TransAlta and ECP have agreed to an $80 million purchase price reduction to reflect two required asset divestitures representing 97 MW (net ownership)
  • Transaction revalued at approximately $542 million, inclusive of the assumption of $232 million of low-cost debt, and subject to a further favourable economic adjustment of approximately $80 million, reflecting the economic benefit of the Heartland business arising since the effective date of the transaction of October 31, 2023, prior to working capital adjustments
  • Heartland portfolio valued at a net price of approximately $270 per kilowatt, with an expected EBITDA multiple1 of approximately 5.4 times
  • Highly accretive to free cash flow, with an attractive cash yield upon closing underpinned by approximately 60% of revenues contracted with a weighted-average remaining life of 15 years
  • Corporate pre-tax synergies of approximately $20 million per annum
  • Transaction to add 1,747 MW (net interest) of complementary capacity, including contracted cogeneration and peaking generation, legacy gas-fired thermal generation, transmission capacity, and potential hydrogen development opportunities, all of which will be critical to support reliability in the Alberta electricity market
  • Enhances and further diversifies TransAlta’s competitive portfolio in the highly dynamic and shifting electricity landscape in Alberta

TransAlta Corporation (TSX: TA; NYSE: TAC) (“TransAlta” or “Company”) announced today that it has entered into an amending agreement to the share purchase agreement (the “Amending Agreement”) with an affiliate of Energy Capital Partners (“ECP”), the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, “Heartland”), relating to the previously announced acquisition of Heartland and its business operations by TransAlta (the “Transaction”). In order to meet the requirements of the federal Competition Bureau (“Bureau”), TransAlta has also entered into a consent agreement with the Commissioner of Competition pursuant to which TransAlta has agreed to divest Heartland’s Poplar Hill and Rainbow Lake assets following closing of the Transaction (the “Divestitures”). Closing of the Transaction is expected to occur on or before December 4, 2024.

In consideration of the Divestitures, TransAlta and ECP have agreed to a purchase price reduction of $80 million for the Transaction. ECP will be entitled to receive the proceeds from the sale of Poplar Hill and Rainbow Lake, net of certain adjustments following completion of the Divestitures. The revised transaction price of $542 million will be further reduced by approximately $80 million following closing of the Transaction, to reflect the economic benefit of the Heartland business arising since October 31, 2023, which is payable to TransAlta, consistent with the terms of the original share purchase agreement. The net cash payment for the Transaction, before working capital adjustments, is estimated at $230 million, and will be funded through a combination of cash on hand and draws on its credit facilities.

“We are pleased to be able to move forward with the Heartland acquisition in the coming weeks, and to incorporate Heartland’s complementary assets within our Alberta portfolio. Consistent with our original investment thesis, the Alberta market will increasingly require low-cost, flexible and fast-responding generation to support grid reliability over the coming years. The transaction supports our competitive position in Alberta by ensuring we maintain a robust and diversified portfolio, which together with our energy marketing capabilities, complements and supports Alberta’s electricity grid. The Heartland portfolio will contribute meaningful cash flows with significant value from our corporate synergies, even with the planned asset divestitures,” said John Kousinioris, President and Chief Executive Officer of TransAlta.

Heartland owns and operates generation assets consisting of 507 MW of cogeneration, 387 MW of contracted and merchant peaking generation, 950 MW of natural gas-fired thermal generation, transmission capacity and a development pipeline that includes the 400 MW Battle River Carbon Hub.

Investment Highlights

The transaction is strategically attractive to TransAlta and provides the following benefits:

  • Expands Flexible Generation Capabilities: Augments and diversifies TransAlta’s portfolio in Alberta’s current energy-only market by expanding its flexible, fast-ramping capacity and marketing capabilities to enhance our ability to respond to changing market conditions stemming from the intermittency of increasing renewable generation.
  • Maintains Attractive Transaction Metrics: The acquisition is highly accretive to free cash flow with an attractive multiple and strong cash yield. The Transaction, net of economic adjustment, values the portfolio of assets at approximately $270 per kilowatt, well below the replacement cost of current and other forms of reliable generation, providing a low-cost expansion of our ability to deliver reliable generation to the market demands of Alberta.
  • Delivers Highly Contracted Cash Flow: Post-closing, the assets are expected to add approximately $85 to $90 million of average annual EBITDA2 after factoring synergies and the divestitures of Poplar Hill and Rainbow Lake. Approximately 60 per cent of revenues are under contract with high creditworthy counterparties which have a weighted-average remaining contract life of 15 years.
  • Near-term Synergies: TransAlta will continue to leverage corporate costs within our existing business which will provide estimated corporate pre-tax synergies of approximately $20 million per annum. In addition, the combined portfolio will enable the Company to further optimize operations and supply chains through scale to achieve additional synergies.
  • Builds On Regional Expertise: The Company is well positioned to deliver significant value through our deep technical and local operational experience which, together with our 113-year history in Alberta, will ensure continuing safe and reliable generation in a dynamic and evolving landscape.

1 Expected EBITDA multiple is a metric calculated by dividing expected capital expenditures by average annual EBITDA. Readers are cautioned that our method for calculating expected EBITDA multiple may differ from methods used by other entities. Therefore, it may not be comparable to similar measures presented by other entities.

2 Average annual EBITDA is not defined and has no standardized meaning under IFRS. It is a forward-looking non-IFRS measure that is used to show the average annual adjusted EBITDA that is expected to generate following completion of the Transaction. It is unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, as an alternative to, or more meaningful than, our IFRS results. Please refer to the “Additional IFRS Measures and Non-IFRS Measures” section of our management’s discussion and analysis for the three and nine months ended September 30, 2024 (“MD&A”) for more information about the non-IFRS measures we use, including a reconciliation of adjusted EBITDA to Earnings before income tax, the most directly comparable IFRS measure, which section of the MD&A is incorporated by reference herein. The MD&A can be found on SEDAR+ (www.sedarplus.ca) under TransAlta’s profile.

About TransAlta Corporation:

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also define sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

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

Cautionary Statement Regarding Forward-Looking Information

This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “would”, “anticipates”, “develop”, “continue”, “estimate”, and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: TransAlta’s acquisition of Heartland; the anticipated benefits arising from such transaction, including that the transaction will be accretive to free cash flow and cash yield, that Heartland’s assets will be supportive to grid reliability; the amount of pre-tax synergies; the acquisition EBITDA multiple of 5.4 times; the expected addition of $85 to $90 million of average annual EBITDA; the expected closing date and the 400 MW Battle River Carbon Hub opportunity, including the project’s continued development. 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 following material assumptions: that there are no significant applicable laws and regulations beyond those that have already been announced; that there are no significant changes to the integrity and reliability of our assets; that the timing, capital costs and material attributes of, and annual EBITDA, free cash flow and cash yield generated from the Heartland portfolio are consistent with current expectations; the political and regulatory environments; the price of power in Alberta; and the condition of the financial markets not changing significantly. 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 Heartland’s facilities; changes in market power and gas prices in Alberta; supply chain disruptions impacting major maintenance and growth projects; failure to obtain necessary regulatory approvals in a timely fashion, or at all; inability to economically or technologically advance the Battle River Carbon Hub Project to final investment decision or commercial operation; any loss of value in the Heartland portfolio during the interim period prior to closing; cybersecurity breaches; negative impacts 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 or at all); changes in prevailing interest rates, currency exchange rates and inflation levels; armed hostilities; general economic conditions in the geographic areas in which TransAlta operates; 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, 2023. 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.

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 Strong Third Quarter 2024 Results

Posted on by ta_root

TransAlta Reports Strong Third Quarter 2024 Results

TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA) (NYSE: TAC) today reported its financial results for the three and nine months ended Sept. 30, 2024, demonstrating another quarter of strong financial performance.

“Our third quarter results illustrate the value of our proactive hedging strategy together with the active management of our Alberta merchant portfolio. Our asset optimization strategies have achieved exceptional  results and we are tracking toward the upper end of our 2024 guidance given our portfolio position and performance during the first nine months of the year,” said John Kousinioris, President and Chief Executive Officer of TransAlta.

“As we look forward, given the ample supply conditions for Alberta throughout 2025, we have taken the decision to temporarily mothball Sundance 6, holding it in reserve as we continue to explore future economic opportunities relating to new demand for electricity entering the province and the enhancement of grid reliability. We will maintain flexibility to returning Sundance 6 to service as market fundamentals improve or opportunities to contract are secured.”

“Finally, we remain actively engaged in commercial discussions with Energy Capital Partners in respect of the acquisition of Heartland Generation and are making progress with the Competition Bureau in our effort to obtain regulatory approval. We are optimistic that we have a pathway to completing the transaction and adding Heartland’s complementary assets to our portfolio. We are also pursuing multiple opportunities to support the energy transition in our core jurisdictions, while at the same time actively pursuing redevelopment and recontracting opportunities at our increasingly valuable legacy thermal fleet,” added Mr. Kousinioris.

Third Quarter 2024 Financial Highlights

TransAlta’s third quarter results exceeded expectations delivering strong free cash flow and exceptional operating performance. The Company delivered Free Cash Flow (“FCF”) per share(1) of $0.47, due to its proactive hedging and asset management strategies given the anticipated decline in Alberta spot power prices in 2024, milder than anticipated weather, low natural gas prices and incremental generation from new supply in the market.  Highlights for the quarter include: 

  • Adjusted EBITDA(1) of $325 million, compared to $453 million for the same period in 2023
  • Operational adjusted availability of 94.5 per cent, compared to 91.9 per cent for the same period in 2023
  • FCF(1) of $140 million or $0.47 per share, compared to $228 million or $0.87 per share for the same period in 2023
  • The return of $114 million of capital to shareholders during the nine months ended Sept. 30, 2024, through the buyback of 11.8 million common shares constituting 76 per cent of the Company’s 2024 enhanced share repurchase program of up to $150 million
  • Tracking towards the upper end of guidance for 2024 of
    • Adjusted EBITDA of $1,150 million to $1,300 million
    • FCF of $450 million to $600 million

Other Business Highlights and Updates

  • Advancing the acquisition of Heartland Generation.
  • Temporarily mothballing Sundance Unit 6 effective April 1, 2025 for a period of up to two years.

Key Business Developments

Advancing Acquisition of Heartland Generation

The Company continues to remain actively engaged with the federal Competition Bureau in an effort to obtain Competition Act approval for the Heartland Generation acquisition. We also remain engaged with Energy Capital Partners regarding commercial terms to advance the completion of the transaction.  The Company remains optimistic that it has a pathway to completing the transaction in a timely manner and to adding Heartland Generation complementary assets to our portfolio.

Mothballing of Sundance Unit 6

On Nov. 4, 2024, the Company provided notice to the Alberta Electric System Operator that Sundance Unit 6 will be temporarily mothballed effective April 1, 2025, for a period of up to two years depending on market conditions. TransAlta maintains the flexibility to return the mothballed unit to service when market fundamentals or opportunities to contract are secured. The unit remains available and fully operational for the upcoming winter season.

Appointment of New Chief Financial Officer (“CFO”)

Joel Hunter was appointed Executive Vice President, Finance and Chief Financial Officer of the Company effective July 1, 2024.

Share Repurchase Program

TransAlta is committed to enhancing shareholder returns through appropriate capital allocation such as share buybacks and its quarterly dividend. In the first quarter of 2024, the Company announced an enhanced common share repurchase program for 2024 allocating up to $150 million, and targeting up to 42 per cent of 2024 FCF guidance to be returned to shareholders in the form of share repurchases and dividends.

On May 27, 2024, the Company announced that it had received approval from the Toronto Stock Exchange to purchase up to a maximum of 14 million common shares during the 12-month period that commenced May 31, 2024, and terminates May 31, 2025. Any common shares purchased under the NCIB will be cancelled.

During the nine months ended Sept. 30, 2024, the Company purchased and cancelled a total of 11,814,700 common shares, at an average price of $9.65 per common share, for a total cost of $114 million, including taxes.

Third Quarter 2024 Highlights

 $ millions, unless otherwise statedThree months endedNine months ended
Sept. 30, 2024Sept. 30, 2023Sept. 30, 2024Sept. 30, 2023
Operational information    
Adjusted availability (%)94.5  91.9 92.5  89.4  
Production (GWh)5,712 5,678  16,612 16,246  
Select financial information    
Revenues638 1,017 2,167 2,731 
Adjusted EBITDA(1)325 453  968 1,343  
Earnings before income taxes                               9                           453                            370 915 
Net earnings (loss) attributable to common shareholders(36)372 242 728 
Cash flows    
Cash flow from operating activities229 681 581 1,154 
Funds from operations(1)200  357 673 1,122 
Free cash flow(1)140 228  521769 
Per share    
Net earnings (loss) per share attributable to common shareholders, basic and diluted(0.12)1.41 0.80  2.75  
Funds from operations per share(1),(2) 0.68  1.36 2.22 4.23  
FCF per share(1),(2)0.47  0.87  1.72 2.90  
Weighted average number of common shares outstanding296 263  303  265  
Download the full news release

TransAlta Declares Dividends

Posted on by ta_root

TransAlta Declares Dividends

CALGARY, Alberta (October 23, 2024) – The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) declared a quarterly dividend of $0.06 per common share payable on January 1, 2025, to shareholders of record at the close of business on December 1, 2024.

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 September 30, 2024, up to but excluding December 31, 2024:

Preferred
Shares		TSX Stock
Symbol		Dividend
Rate		Dividend
Per Share		Record
Date		Payment
Date
Series ATA.PR.D2.877%$0.17981December 1, 2024December 31, 2024
Series B*TA.PR.E6.235%$0.39182December 1, 2024December 31, 2024
Series CTA.PR.F5.854%$0.36588December 1, 2024December 31, 2024
Series D*TA.PR.G7.305%$0.45906December 1, 2024December 31, 2024
Series ETA.PR.H6.894%$0.43088December 1, 2024December 31, 2024
Series GTA.PR.J6.773%$0.42331December 1, 2024December 31, 2024
* Please note the quarterly floating rate on the Series B and Series D 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 with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit its website at transalta.com.

For more information:

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

Media Advisory: TransAlta Third Quarter 2024 Results and Conference Call

Posted on by Ben Harris

Media Advisory: TransAlta Third Quarter 2024 Results and Conference Call

TransAlta Corporation (“TransAlta”) (TSX: TA) (NYSE: TAC) will release its third quarter 2024 results before markets open on Tuesday, November 5, 2024. 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.

Third Quarter 2024 Conference Call:

Webcast link: https://edge.media-server.com/mmc/p/22yb3pn9

To access the conference call via telephone, please register ahead of time using the call link below:

https://register.vevent.com/register/BI863e6b314dbc4284ae19fafc47eca7ac. 

Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the “Call Me” option to receive an automated call directly to their phone.

Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the replay will be accessible at https://edge.media-server.com/mmc/p/22yb3pn9. 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 affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit its website at transalta.com.

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 Announces Conversion Results for Series G and Series H Preferred Shares

Posted on by kduke

TransAlta Announces Conversion Results for Series G and Series H Preferred Shares

Further to TransAlta Corporation’s (“TransAlta” or the “Company”) (TSX: TA; NYSE: TAC) press release dated August 22, 2024, the Company announced today that after taking into account all election notices received for the conversion of the Cumulative Redeemable Rate Reset Preferred Shares, Series G (the “Series G Shares”) into Cumulative Redeemable Floating Rate Preferred Shares, Series H (the “Series H Shares”), there were only 20,607 Series G Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series H Shares. As a result, none of the Series G Shares will be converted into Series H Shares on September 30, 2024.

About TransAlta Corporation:

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit our website 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 G Shares and the Series H Shares, including but not limited to the listing of the Series H Shares and the payment of dividends on the Series G Shares and Series H Shares. All forward-looking information reflects 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 news 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 most recent Annual Information Form, Annual Report and Management’s Discussion and Analysis and the Prospectus Supplement dated August 8, 2014, in each case filed under the Company’s profile on SEDAR at www.sedarplus.com.

For more information:

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

TransAlta Announces Dividend Rates on Series G Preferred Shares and Series H Preferred Shares

Posted on by kduke

TransAlta Announces Dividend Rates on Series G Preferred Shares and Series H Preferred Shares

Further to the news release of TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA; NYSE: TAC) dated August 22, 2024, the Company announced today the applicable dividend rates for its cumulative redeemable rate reset first preferred shares Series G (“Series G Shares”) (TSX: TA.PR.J) and cumulative redeemable floating rate first preferred shares Series H of the Company (“Series H Shares”).

With respect to any Series G Shares that remain outstanding after September 30, 2024, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors of TransAlta. The annual dividend rate for the Series G Shares for the five-year period from and including September 30, 2024, to but excluding September 30, 2029, will be 6.77300%, being equal to the five-year Government of Canada bond yield of 2.97300% determined as of today plus 3.80000%, in accordance with the terms of the Series G Shares.

With respect to any Series H Shares that may be issued on September 30, 2024, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors of TransAlta. The annual dividend rate for the 3-month floating rate period from and including September 30, 2024, to but excluding December 31, 2024, will be 8.00500%, being equal to the annual rate for the most recent auction of 90-day Government of Canada Treasury Bills of 4.20500% plus 3.80000%, in accordance with the terms of the Series H Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial owners of Series G Shares who wish to exercise their conversion right should communicate with their broker or other intermediary promptly to ensure their instructions are followed so that the registered holder of the Series G Shares can meet the deadline to exercise such conversion right, which is 3:00 p.m. (MDT) / 5:00 p.m. (EDT) on September 16, 2024.

About TransAlta Corporation:

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit our website 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 G Shares and the Series H Shares, including but not limited to the listing of the Series H Shares and the payment of dividends on the Series G Shares and Series H Shares. All forward-looking information reflects 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 news 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 most recent Annual Information Form, Annual Report and Management’s Discussion and Analysis and the Prospectus Supplement dated August 8, 2014, in each case filed under the Company’s profile on SEDAR at www.sedarplus.com.

For more information:

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

TransAlta Provides Notice of Series G Preferred Shares Conversion Right

Posted on by kduke

TransAlta Provides Notice of Series G Preferred Shares Conversion Right

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 part of the currently outstanding cumulative redeemable rate reset first preferred shares Series G (“Series G Shares”) (TSX: TA.PR.J) on September 30, 2024 (the “Conversion Date”).

As a result, the holders of the Series G Shares will have the right to convert all or any of their Series G Shares into cumulative redeemable floating rate first preferred shares Series H of the Company (“Series H Shares”) on the basis of one Series H Share for each Series G Share on the Conversion Date subject to the terms and conditions of the Series G Shares, including those described in the prospectus supplement dated August 8, 2014 relating to the issuance of the Series G Shares.

The dividend rate applicable to the Series G Shares for the 5-year period from and including September 30, 2024, to but excluding September 30, 2029, and the dividend rate applicable to the Series H Shares for the 3-month period from and including September 30, 2024, to but excluding December 31, 2024, will be determined and announced by the Company by way of a news release on September 3, 2024.

As provided in the terms of the Series G Shares, if TransAlta determines after reviewing all Series G Shares tendered for conversion into Series H Shares that: (i) there would remain outstanding on September 30, 2024, less than 1,000,000 Series G Shares, all remaining Series G Shares shall be converted automatically into Series H Shares on a one-for one basis effective September 30, 2024; or (ii) there would remain outstanding after September 30, 2024, less than 1,000,000 Series H Shares, the holders of Series G Shares shall not be entitled to convert their shares into Series H Shares effective September 30, 2024. There are currently 6,600,000 Series G Shares outstanding.

The Series G 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 G Shares must be exercised through CDS or the CDS Participant through which the Series G Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series G Shares into Series H Shares is 3:00 p.m. (MST) / 5:00 p.m. (EST) on September 16, 2024. Any notices received after this deadline will not be valid. As such, holders of Series G 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 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 G Shares during the time fixed therefore, then the Series G Shares shall be deemed not to have been converted (except in the case of an automatic conversion). Holders of the Series G Shares and the Series H Shares will have the opportunity to convert their shares again on September 30, 2029, and every five years thereafter as long as the shares remain outstanding.

The Toronto Stock Exchange (TSX) has conditionally approved the listing of the Series H Shares effective upon conversion.

Listing of the Series H Shares is subject to TransAlta fulfilling all the listing requirements of the TSX.

About TransAlta Corporation:

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 113 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit our website 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 G Shares and the Series H Shares, including but not limited to the listing of the Series H Shares and the determination of the dividend rate and payment of dividends on the Series G Shares and Series H Shares in the future. All forward- looking information reflects 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 news 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 most recent Annual Information Form, Annual Report and Management’s Discussion and Analysis and the Prospectus Supplement dated August 8, 2014, in each case filed under the Company’s profile on SEDAR at www.sedarplus.com.

For more information:

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

TransAlta Reports Second Quarter 2024 Results

Posted on by Ben Harris

TransAlta Reports Second Quarter 2024 Results

TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA) (NYSE: TAC) today reported its financial results for the three and six months ended June 30, 2024, demonstrating strong financial performance and reaffirming its 2024 outlook.

Second Quarter 2024 Financial Highlights

TransAlta’s second quarter results exceeded expectations and delivered strong free cash flow and solid operating performance. The Company delivered Free Cash Flow (“FCF”)(1) per share of $0.57, which was firmly supported by its hedging and asset optimization strategies given the expected decline in Alberta spot power prices year over year, milder weather, lower natural gas prices and incremental generation from the addition of new natural gas, wind and solar supply in the market. Highlights for the quarter include:

  • Adjusted EBITDA(1) of $312 million, compared to $387 million for the same period in 2023
  • Strong operational adjusted availability of 90.8 per cent, up from 84.6 per cent during the same period in 2023
  • FCF of $172 million or $0.57 per share, compared to $278 million or $1.05 per share for the same period in 2023
  • Earnings before income taxes of $94 million, compared to $79 million for the same period in 2023
  • Net earnings attributable to common shareholders of $56 million or $0.18 per share, compared to $62 million or $0.23 per share for the same period in 2023
  • Cash flow from operating activities of $108 million, an increase of $97 million for the same period in 2023
  • The return of $89 million of capital to shareholders during the six months ended June 30, 2024, through the buyback of 9.5 million common shares constituting 59 per cent of the Company’s 2024 enhanced share repurchase program of up to $150 million

Other Business Highlights and Updates

  • Achieved commercial operation of the 200 MW White Rock East wind facility on April 22, 2024 and the 200 MW Horizon Hill wind facility on May 21, 2024, increasing the Company’s renewables fleet in the US to over 1 GW
  • Entered into an additional 10-year transfer agreement on June 21, 2024, with an A+ rated customer for the sale of the remaining 20 per cent of the expected production tax credits (“PTCs”) to be generated from the White Rock and Horizon Hill wind facilities
  • Welcomed Joel Hunter as Executive Vice President, Finance and Chief Financial Officer (“CFO”) effective July 1, 2024, following the retirement of Todd Stack effective June 30, 2024

“Our strong second quarter results demonstrate the value of our portfolio management and market forecasting capabilities. In response to the evolving market conditions in Alberta, we proactively deployed hedging strategies to enhance portfolio margins and moderate the impact of the known supply additions and weakening price environment in Alberta. Given our portfolio position, we are confident that we will reach our 2024 guidance given our exceptional performance in the first half of the year,” said John Kousinioris, President and Chief Executive Officer of TransAlta.

“We continue to believe that our strong free cash flow results during the first half of the year, and our expectations for the balance of 2024, are not reflected in the current trading price of our common shares. As a result, we will continue to use share repurchases as part of our capital allocation strategy. We have completed $89 million of share repurchases so far this year, which is approximately 59 per cent of our $150 million share repurchase target or $0.29 per share in shareholder value.”

“Our capital allocation decisions will continue to be balanced and focused on enhancing shareholder value. We are seeing considerable opportunities to support the energy transition in our core jurisdictions, particularly at our legacy thermal sites, where we are actively pursuing redevelopment and recontracting opportunities for the benefit of our shareholders,” added Mr. Kousinioris.

Key Business Developments

Appointment of New CFO

On June 30, 2024, Todd Stack, the former Executive Vice President, Finance and CFO retired from the Company. The Board of Directors expresses its deep appreciation to Todd for his contributions to TransAlta and its success during his 34-year career with the Company.

Joel Hunter was appointed Executive Vice President, Finance and Chief Financial Officer of the Company effective July 1, 2024.

Normal Course Issuer Bid (“NCIB”) and Automatic Share Purchase Plan (“ASPP”)

TransAlta is committed to enhancing shareholder returns through appropriate capital allocation such as share buybacks and its quarterly dividend. The Company previously announced an enhanced common share repurchase program for 2024 of up to $150 million, targeting up to 42 per cent of 2024 FCF guidance to be returned to shareholders in the form of share repurchases and dividends.

On May 27, 2024, the Company announced that it had received approval from the Toronto Stock Exchange to purchase up to a maximum of 14 million common shares during the 12-month period that commenced May 31, 2024 and terminates May 31, 2025. Any common shares purchased under the NCIB will be cancelled.

On June 21, 2024, the Company entered into an ASPP to facilitate repurchases of TransAlta’s common shares under its NCIB. Under the ASPP, the Company’s broker may purchase common shares from the effective date of the ASPP until the termination of the ASPP. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. The ASPP will terminate on the earliest of: (a) Aug. 6, 2024; (b) the date on which the maximum purchase limits under the ASPP are reached; or (c) the date on which the Company terminates the ASPP in accordance with its terms.

During the six months ended June 30, 2024, the Company purchased and cancelled a total of 9,537,200 common shares, at an average price of $9.54 per common share, for a total cost of $91 million, including tax on share buybacks.

Production Tax Credit (“PTC”) Sale Agreements

On Feb. 22, 2024, the Company entered into a 10-year transfer agreement with an AA- rated customer for the sale of approximately 80 per cent of the expected PTCs to be generated from the White Rock and the Horizon Hill wind facilities.

On June 21, 2024, the Company entered into an additional 10-year transfer agreement with an A+ rated customer for sale of the remaining 20 per cent of the expected PTCs.

The expected annual average EBITDA from the two agreements is approximately $78 million (US$57 million).

Horizon Hill Wind Facility Achieved Commercial Operation

On May 21, 2024, the 200 MW Horizon Hill wind facility achieved commercial operation. The facility is located in Logan County, Oklahoma and is fully contracted to Meta for the offtake of 100 per cent of the generation.

White Rock Wind Facilities Achieved Commercial Operation

On Jan. 1, 2024, the 100 MW White Rock West wind facility achieved commercial operation. On April 22, 2024, the 200 MW White Rock East wind facility was also commissioned. The facilities are located in Caddo County, Oklahoma and are contracted under two long-term PPAs with Amazon for the offtake of 100 per cent of the generation from the facilities.

Bow River Basin Memorandum of Understanding

On April 19, 2024, the Company announced it had signed a voluntary water-sharing memorandum of understanding with over thirty other water licence holders in the Bow River Basin. The Government of Alberta continues to anticipate and prepare for lower water conditions this summer with specific concerns in southern Alberta where agriculture could be impacted by water shortages. The Government of Alberta is leading efforts to coordinate water usage among water licence holders for Alberta river basins in an effort to ensure licensees get the water they need as opposed to the water to which they are entitled. In recognition of the unique role the Company plays in managing water flows while also serving as a key provider to Alberta’s electricity grid, we look forward to working with the Government and downstream stakeholders to maximize water storage in the early season to help mitigate any anticipated drought conditions. We anticipate the Company’s water management efforts will not have an adverse impact on our electricity generating and environmental objectives.

Annual Shareholder Meeting

The Honourable Rona Ambrose did not stand for re-election and retired from the Board following the annual shareholder meeting on April 25, 2024. At the annual shareholder meeting, the Company received strong support on all items of business, including the election of 12 directors, the reappointment of auditors and the Company’s approach to executive compensation.

Mount Keith 132kV Expansion Complete

The Mount Keith 132kV expansion project was completed during the first quarter of 2024. The expansion was developed under the existing PPA with BHP Nickel West (“BHP”), which has a term of 15 years. The expansion will facilitate the connection of additional generating capacity to the transmission network which supports BHP’s operations and increases its competitiveness as a supplier of low-carbon nickel.

Second Quarter 2024 Highlights

 $ millions, unless otherwise statedThree months endedSix months ended
June 30, 2024June 30, 2023June 30, 2024June 30, 2023
Operational information    
Adjusted availability (%)90.8 84.6 91.5 88.2 
Production (GWh)  4,781   4,596   10,959   10,568 
Select financial information    
Revenues  582   625   1,529   1,714 
Adjusted EBITDA(1)  312   387   643   890 
Earnings before income taxes  94   79   361   462 
Net earnings attributable to common shareholders  56   62   278   356 
Cash flows    
Cash flow from operating activities  108   11  352   473 
Funds from operations(1)  231   391   473   765 
Free cash flow(1)  172   278   381   541 
Per share    
Net earnings per share attributable to common shareholders, basic and diluted  0.18   0.23   0.91   1.34 
Funds from operations per share(1),(2)  0.76   1.48   1.55   2.88 
FCF per share(1),(2)  0.57   1.05   1.25   2.03 
Weighted average number of common shares outstanding  303   264   306   266 
Download the full news release

TransAlta Declares Dividends

Posted on by tcook

TransAlta Declares Dividends

CALGARY, Alberta (July 29, 2024) The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) declared a quarterly dividend of $0.06 per common share payable on October 1, 2024, to shareholders of record at the close of business on September 1, 2024.

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, 2024, up to but excluding September 30, 2024:

Preferred SharesTSX Stock SymbolDividend RateDividend Per ShareRecord DatePayment Date
Series ATA.PR.D2.877%$0.17981September 1, 2024September 30, 2024
Series B*TA.PR.E6.902%$0.43373September 1, 2024September 30, 2024
Series CTA.PR.F5.854%$0.36588September 1, 2024September 30, 2024
Series D*TA.PR.G7.972%$0.50097September 1, 2024September 30, 2024
Series ETA.PR.H6.894%$0.43088September 1, 2024September 30, 2024
Series GTA.PR.J4.988%$0.31175September 1, 2024September 30, 2024

* Please note the quarterly floating rate on the Series B and Series D 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 with affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

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

For more information:

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

Media Advisory: TransAlta Second Quarter 2024 Results and Conference Call

Posted on by kevin_wick

Media Advisory: TransAlta Second Quarter 2024 Results and Conference Call

TransAlta will release its second quarter 2024 results before markets open on Thursday, August 1, 2024. 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.

Second Quarter 2024 Conference Call:
Webcast link: https://edge.media-server.com/mmc/p/wyxuetfp

To access the conference call via telephone, please register ahead of time using the call link below: https://register.vevent.com/register/BI822fcd13487248f6aeaefa8578cef5cc. Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the €œCall Me€ option to receive an automated call directly to their phone.

Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the replay will be accessible at https://edge.media-server.com/mmc/p/wyxuetfp. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.

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 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit its website at transalta.com.

Note: All financial figures are in Canadian dollars unless otherwise indicated.

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