Form
|
Registration No.
|
S-8
|
333-72454
|
S-8
|
333-101470
|
F-10
|
333-215608
|
13.1
|
Consolidated comparative interim unaudited financial statements of the registrant for the three month period ended March 31, 2019.
|
13.2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations of the registrant as at and for the period ended March 31, 2019.
|
|
By:
|
/s/ “Christophe Dehout”
|
|
|
Christophe Dehout
|
|
|
Chief Financial Officer
|
13.1
|
Consolidated comparative interim unaudited financial statements of the registrant for the three month period ended March 31, 2019.
|
13.2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations of the registrant as at and for the period ended March 31, 2019.
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer regarding Periodic Report Containing Financial Statements.
|
32.2
|
Certification of Chief Financial Officer regarding Periodic Report Containing Financial Statements.
|
|
3 months ended March 31
|
|
||
Unaudited
|
2019
|
|
2018
|
|
Revenues
(Note 4)
|
648
|
|
588
|
|
Fuel, carbon costs, and purchased power
|
366
|
|
277
|
|
Gross margin
|
282
|
|
311
|
|
Operations, maintenance, and administration
|
104
|
|
133
|
|
Depreciation and amortization
|
145
|
|
130
|
|
Taxes, other than income taxes
|
7
|
|
8
|
|
Termination of Sundance B and C PPAs
(Note 5)
|
—
|
|
(157
|
)
|
Net other operating income
|
(10
|
)
|
(11
|
)
|
Operating income
|
36
|
|
208
|
|
Finance lease income
|
2
|
|
2
|
|
Net interest expense
(Note 6)
|
(50
|
)
|
(68
|
)
|
Foreign exchange loss
|
(1
|
)
|
(2
|
)
|
Earnings (loss) before income taxes
|
(13
|
)
|
140
|
|
Income tax expense
(Note 7)
|
17
|
|
37
|
|
Net earnings (loss)
|
(30
|
)
|
103
|
|
|
|
|
||
Net earnings (loss) attributable to:
|
|
|
|
|
TransAlta shareholders
|
(65
|
)
|
75
|
|
Non-controlling interests
(Note 8)
|
35
|
|
28
|
|
|
(30
|
)
|
103
|
|
|
|
|
||
Net earnings (loss) attributable to TransAlta shareholders
|
(65
|
)
|
75
|
|
Preferred share dividends
(Note 15)
|
—
|
|
10
|
|
Net earnings (loss) attributable to common shareholders
|
(65
|
)
|
65
|
|
Weighted average number of common shares
outstanding in the period
(millions)
|
285
|
|
288
|
|
|
|
|
||
Net earnings (loss) per share attributable to common shareholders,
basic and diluted
(Note 14)
|
(0.23
|
)
|
0.23
|
|
|
3 months ended March 31
|
|
||
Unaudited
|
2019
|
|
2018
|
|
Net earnings (loss)
|
(30
|
)
|
103
|
|
Other comprehensive income (loss)
|
|
|
||
Net actuarial gains (losses) on defined benefit plans, net of tax
(1)
|
(19
|
)
|
3
|
|
Gains on derivatives designated as cash flow hedges, net of tax
(2)
|
3
|
|
1
|
|
Total items that will not be reclassified subsequently to net earnings
|
(16
|
)
|
4
|
|
Gains (losses) on translating net assets of foreign operations, net of tax
|
(21
|
)
|
33
|
|
Gains (losses) on financial instruments designated as hedges of foreign
operations, net of tax
(3)
|
8
|
|
(12
|
)
|
Gains (losses) on derivatives designated as cash flow hedges, net of tax
(4)
|
(51
|
)
|
6
|
|
Reclassification of (gains) losses on derivatives designated as cash flow hedges to
net earnings, net of tax
(5)
|
21
|
|
(23
|
)
|
Total items that will be reclassified subsequently to net earnings
|
(43
|
)
|
4
|
|
Other comprehensive income (loss)
|
(59
|
)
|
8
|
|
Total comprehensive income (loss)
|
(89
|
)
|
111
|
|
|
|
|
||
Total comprehensive income (loss) attributable to:
|
|
|
||
TransAlta shareholders
|
(125
|
)
|
82
|
|
Non-controlling interests
(Note 8)
|
36
|
|
29
|
|
|
(89
|
)
|
111
|
|
Unaudited
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
Cash and cash equivalents
|
109
|
|
89
|
|
Restricted cash
(Note 13)
|
31
|
|
66
|
|
Trade and other receivables
|
731
|
|
756
|
|
Prepaid expenses
|
25
|
|
13
|
|
Risk management assets
(Notes 9 and 10)
|
139
|
|
146
|
|
Inventory
|
226
|
|
242
|
|
|
1,261
|
|
1,312
|
|
Long-term portion of finance lease receivables
|
187
|
|
191
|
|
Risk management assets
(Notes 9 and 10)
|
631
|
|
662
|
|
Property, plant, and equipment
(Note 11)
|
|
|
|
|
Cost
|
13,106
|
|
13,202
|
|
Accumulated depreciation
|
(7,077
|
)
|
(7,038
|
)
|
|
6,029
|
|
6,164
|
|
|
|
|
||
Right of use assets
(Note 12)
|
81
|
|
—
|
|
Intangible assets
|
372
|
|
373
|
|
Goodwill
|
464
|
|
464
|
|
Deferred income tax assets
|
20
|
|
28
|
|
Other assets
(Note 3)
|
283
|
|
234
|
|
|
|
|
||
Total assets
|
9,328
|
|
9,428
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
458
|
|
497
|
|
Current portion of decommissioning and other provisions
|
56
|
|
70
|
|
Risk management liabilities
(Notes 9 and 10)
|
100
|
|
90
|
|
Income taxes payable
|
8
|
|
10
|
|
Dividends payable
(Note 14)
|
47
|
|
58
|
|
Current portion of long-term debt and lease obligations
(Note 13)
|
105
|
|
148
|
|
|
774
|
|
873
|
|
Credit facilities, long-term debt, and lease obligations
(Note 13)
|
3,203
|
|
3,119
|
|
Decommissioning and other provisions
|
403
|
|
386
|
|
Deferred income tax liabilities
|
490
|
|
501
|
|
Risk management liabilities
(Notes 9 and 10)
|
42
|
|
41
|
|
Contract liabilities
|
104
|
|
87
|
|
Defined benefit obligation and other long-term liabilities
|
295
|
|
287
|
|
Equity
|
|
|
|
|
Common shares
(Note 14)
|
3,059
|
|
3,059
|
|
Preferred shares
(Note 15)
|
942
|
|
942
|
|
Contributed surplus
|
12
|
|
11
|
|
Deficit
|
(1,558
|
)
|
(1,496
|
)
|
Accumulated other comprehensive income
|
422
|
|
481
|
|
Equity attributable to shareholders
|
2,877
|
|
2,997
|
|
Non-controlling interests
(Note 8)
|
1,140
|
|
1,137
|
|
Total equity
|
4,017
|
|
4,134
|
|
Total liabilities and equity
|
9,328
|
|
9,428
|
|
Unaudited
|
|
|
|
|
|
|
|
|
||||||||
3 months ended March 31, 2019
|
Common
shares
|
|
Preferred
shares
|
|
Contributed
surplus
|
|
Deficit
|
|
Accumulated other
comprehensive
income
|
|
Attributable to
shareholders
|
|
Attributable
to non-controlling
interests
|
|
Total
|
|
Balance, Dec. 31, 2018
|
3,059
|
|
942
|
|
11
|
|
(1,496
|
)
|
481
|
|
2,997
|
|
1,137
|
|
4,134
|
|
Impact of changes in accounting
policy
(Note 2)
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
3
|
|
—
|
|
3
|
|
Adjusted balance as at Jan. 1, 2019
|
3,059
|
|
942
|
|
11
|
|
(1,493
|
)
|
481
|
|
3,000
|
|
1,137
|
|
4,137
|
|
Net earnings (loss)
|
—
|
|
—
|
|
—
|
|
(65
|
)
|
—
|
|
(65
|
)
|
35
|
|
(30
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net losses on translating
net assets of foreign operations,
net of hedges and of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(13
|
)
|
(13
|
)
|
—
|
|
(13
|
)
|
Net losses on derivatives
designated as cash flow hedges,
net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(27
|
)
|
(27
|
)
|
—
|
|
(27
|
)
|
Net actuarial losses on
defined benefits plans, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(19
|
)
|
(19
|
)
|
—
|
|
(19
|
)
|
Intercompany fair value through
OCI investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
1
|
|
—
|
|
Total comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
(65
|
)
|
(60
|
)
|
(125
|
)
|
36
|
|
(89
|
)
|
Changes in non-controlling interests in TransAlta Renewables
(Note 8)
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
6
|
|
7
|
|
Effect of share-based payment
plans
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
|
Distributions paid, and payable, to
non-controlling interests
(Note 8)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(39
|
)
|
(39
|
)
|
Balance, Mar 31, 2019
|
3,059
|
|
942
|
|
12
|
|
(1,558
|
)
|
422
|
|
2,877
|
|
1,140
|
|
4,017
|
|
|
|
|
|
|
|
|
|
|
||||||||
3 months ended March 31, 2018
|
Common
shares
|
|
Preferred
shares
|
|
Contributed
surplus
|
|
Deficit
|
|
Accumulated other
comprehensive
income
|
|
Attributable to
shareholders
|
|
Attributable
to non-controlling
interests
|
|
Total
|
|
Balance, Dec. 31, 2017
|
3,094
|
|
942
|
|
10
|
|
(1,209
|
)
|
489
|
|
3,326
|
|
1,059
|
|
4,385
|
|
Impact of changes in accounting
policy
|
—
|
|
—
|
|
—
|
|
(14
|
)
|
—
|
|
(14
|
)
|
1
|
|
(13
|
)
|
Adjusted balance as at Jan. 1, 2018
|
3,094
|
|
942
|
|
10
|
|
(1,223
|
)
|
489
|
|
3,312
|
|
1,060
|
|
4,372
|
|
Net earnings
|
—
|
|
—
|
|
—
|
|
75
|
|
—
|
|
75
|
|
28
|
|
103
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net gains (losses) on translating
net assets of foreign operations, net of hedges and of tax |
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
21
|
|
—
|
|
21
|
|
Net losses on derivatives
designated as cash flow hedges,
net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(16
|
)
|
(16
|
)
|
—
|
|
(16
|
)
|
Net actuarial gains on
defined benefits plans, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
3
|
|
—
|
|
3
|
|
Intercompany fair value through
OCI investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
1
|
|
—
|
|
Total comprehensive income
|
—
|
|
—
|
|
—
|
|
75
|
|
7
|
|
82
|
|
29
|
|
111
|
|
Common share dividends
|
—
|
|
—
|
|
—
|
|
(11
|
)
|
—
|
|
(11
|
)
|
—
|
|
(11
|
)
|
Preferred share dividends
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
—
|
|
(10
|
)
|
—
|
|
(10
|
)
|
Shares purchased under NCIB
(Note 14)
|
(4
|
)
|
—
|
|
—
|
|
1
|
|
—
|
|
(3
|
)
|
—
|
|
(3
|
)
|
Effect of share-based payment
plans
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
|
Distributions paid, and payable, to
non-controlling interests
(Note 8)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(41
|
)
|
(41
|
)
|
Balance, March 31, 2018
|
3,090
|
|
942
|
|
11
|
|
(1,168
|
)
|
496
|
|
3,371
|
|
1,048
|
|
4,419
|
|
|
3 months ended March 31
|
|
||
Unaudited
|
2019
|
|
2018
|
|
Operating activities
|
|
|
||
Net earnings (loss)
|
(30
|
)
|
103
|
|
Depreciation and amortization
(Note 17)
|
174
|
|
161
|
|
Accretion of provisions
(Note 6)
|
6
|
|
6
|
|
Decommissioning and restoration costs settled
|
(7
|
)
|
(7
|
)
|
Deferred income tax expense (recovery)
(Note 7)
|
10
|
|
28
|
|
Unrealized (gain) loss from risk management activities
|
2
|
|
(21
|
)
|
Unrealized foreign exchange (gains) losses
|
(1
|
)
|
10
|
|
Provisions
|
2
|
|
5
|
|
Other non-cash items
|
6
|
|
17
|
|
Cash flow from operations before changes in working capital
|
162
|
|
302
|
|
Change in non-cash operating working capital balances
|
(80
|
)
|
123
|
|
Cash flow from operating activities
|
82
|
|
425
|
|
Investing activities
|
|
|
|
|
Additions to property, plant, and equipment
(Note 11)
|
(34
|
)
|
(23
|
)
|
Additions to intangibles
|
(3
|
)
|
(5
|
)
|
Restricted cash
(Note 13)
|
35
|
|
—
|
|
Acquisition of renewable energy development projects
(Note 3)
|
(32
|
)
|
(30
|
)
|
Note receivable to fund project development costs
(Note 3)
|
(50
|
)
|
—
|
|
Proceeds on sale of property, plant, and equipment
|
1
|
|
1
|
|
Realized losses on financial instruments
|
3
|
|
—
|
|
Decrease in finance lease receivable
|
6
|
|
15
|
|
Other
|
(1
|
)
|
1
|
|
Change in non-cash investing working capital balances
|
22
|
|
(12
|
)
|
Cash flow from (used in) investing activities
|
(53
|
)
|
(53
|
)
|
Financing activities
|
|
|
|
|
Net increase (repayment) in borrowings under credit facilities
(Note 13)
|
71
|
|
326
|
|
Repayment of long-term debt
(Note 13)
|
(29
|
)
|
(660
|
)
|
Dividends paid on common shares
(Note 14)
|
(11
|
)
|
(12
|
)
|
Dividends paid on preferred shares
(Note 15)
|
—
|
|
(10
|
)
|
Repurchase of common shares under NCIB
(Note 14)
|
—
|
|
(1
|
)
|
Realized gains (losses) on financial instruments
|
—
|
|
50
|
|
Distributions paid to subsidiaries’ non-controlling interests
(Note 8)
|
(32
|
)
|
(41
|
)
|
Decrease in lease obligations
(Note 13)
|
(5
|
)
|
(4
|
)
|
Change in non-cash financing working capital balances
|
(3
|
)
|
—
|
|
Other
|
—
|
|
(5
|
)
|
Cash flow used in financing activities
|
(9
|
)
|
(357
|
)
|
Cash flow from operating, investing, and financing activities
|
20
|
|
15
|
|
Cash and cash equivalents, beginning of period
|
89
|
|
314
|
|
Cash and cash equivalents, end of period
|
109
|
|
329
|
|
Cash income taxes paid
|
8
|
|
12
|
|
Cash interest paid
|
32
|
|
37
|
|
▪
|
Exemption to not recognize right of use assets and lease liabilities for short-term leases that have a remaining lease term of less than 12 months as at Jan. 1, 2019 and for low value leases;
|
▪
|
Excluding initial direct costs for the measurement of the right of use asset at the date of initial application;
|
▪
|
Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease;
|
▪
|
Adjusting the right of use assets by the amount of IAS 37 onerous contract provision immediately before the date of initial application; and
|
▪
|
Measuring the right of use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application.
|
Non-cancellable operating lease commitments disclosed at Dec. 31, 2018
|
80
|
|
Less: Exemption for low value leases
|
(1
|
)
|
Add: Extension and termination options reasonably certain to be exercised
|
4
|
|
|
83
|
|
Discounted using the incremental borrowing rate at Jan. 1, 2019
|
(31
|
)
|
New lease liabilities recognized as at Jan. 1, 2019
|
52
|
|
Add: 2018 finance lease obligations
|
63
|
|
Less: 2018 finance lease obligations that do not meet the IFRS 16 definition of a lease
|
(32
|
)
|
Lease liabilities as at Jan. 1, 2019
|
83
|
|
▪
|
Recognizes right of use assets and lease liabilities in the consolidated statement of financial positions, initially measured at the present value of the remaining lease payments discounted using the Corporation's incremental borrowing rate or rate implicit in the lease;
|
▪
|
Recognizes depreciation of the right of use assets and interest expense on lease obligations in the consolidated statement of earnings (loss);
|
▪
|
Recognizes the principal repayments on lease obligations as financing activities and interest payments on lease obligations as operating activities in the consolidated statement of cash flow.
|
▪
|
Sundance Unit 3 will remain mothballed until Nov. 1, 2021, extended from April 1, 2020; and
|
▪
|
Sundance Unit 5 will remain mothballed until Nov. 1, 2021, extended from April 1, 2020.
|
3 months ended March 31, 2019
|
Canadian
Coal
|
|
US
Coal
|
|
Canadian
Gas
|
|
Australian
Gas
|
|
Wind and
Solar
|
|
Hydro
|
|
Energy
Marketing
|
|
Corporate
|
|
Total
|
|
Revenues from contracts with customers
|
107
|
|
2
|
|
59
|
|
22
|
|
75
|
|
35
|
|
—
|
|
—
|
|
300
|
|
Revenue from leases
|
16
|
|
—
|
|
—
|
|
17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33
|
|
Revenue from derivatives
|
(33
|
)
|
(38
|
)
|
5
|
|
—
|
|
2
|
|
—
|
|
46
|
|
—
|
|
(18
|
)
|
Government incentives
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
2
|
|
Revenue from other
(1)
|
135
|
|
182
|
|
1
|
|
2
|
|
10
|
|
2
|
|
—
|
|
(1
|
)
|
331
|
|
Total Revenue
|
225
|
|
146
|
|
65
|
|
41
|
|
89
|
|
37
|
|
46
|
|
(1
|
)
|
648
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
||||||||||
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|||||||||
At a point in time
|
8
|
|
2
|
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
16
|
|
Over time
|
99
|
|
—
|
|
59
|
|
22
|
|
69
|
|
35
|
|
—
|
|
—
|
|
284
|
|
Total Revenue from contracts with customers
|
107
|
|
2
|
|
59
|
|
22
|
|
75
|
|
35
|
|
—
|
|
—
|
|
300
|
|
3 months ended March 31, 2018
|
Canadian
Coal
|
|
US
Coal
|
|
Canadian
Gas
|
|
Australian
Gas
|
|
Wind and
Solar
|
|
Hydro
|
|
Energy
Marketing
|
|
Corporate
|
|
Total
|
|
Revenues from contracts with customers
|
204
|
|
2
|
|
56
|
|
23
|
|
65
|
|
24
|
|
—
|
|
—
|
|
374
|
|
Revenue from leases
|
17
|
|
—
|
|
—
|
|
17
|
|
8
|
|
1
|
|
—
|
|
—
|
|
43
|
|
Revenue from derivatives
|
11
|
|
64
|
|
6
|
|
—
|
|
(3
|
)
|
—
|
|
17
|
|
—
|
|
95
|
|
Government incentives
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
5
|
|
Revenue from other
(1)
|
37
|
|
21
|
|
—
|
|
1
|
|
11
|
|
2
|
|
—
|
|
(1
|
)
|
71
|
|
Total Revenue
|
269
|
|
87
|
|
62
|
|
41
|
|
86
|
|
27
|
|
17
|
|
(1
|
)
|
588
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
||||||||||
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
|
|||||||||
At a point in time
|
10
|
|
2
|
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
16
|
|
Over time
|
194
|
|
—
|
|
56
|
|
23
|
|
61
|
|
24
|
|
—
|
|
—
|
|
358
|
|
Total Revenue from contracts with customers
|
204
|
|
2
|
|
56
|
|
23
|
|
65
|
|
24
|
|
—
|
|
—
|
|
374
|
|
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Interest on debt
|
41
|
|
53
|
|
Interest income
|
(2
|
)
|
(3
|
)
|
Capitalized interest
|
(1
|
)
|
—
|
|
Loss on early redemption on US Senior Notes
|
—
|
|
5
|
|
Interest on lease obligations
|
1
|
|
1
|
|
Credit facility fees and bank charges
|
3
|
|
3
|
|
Other interest and fees
|
2
|
|
3
|
|
Accretion of provisions
|
6
|
|
6
|
|
Net interest expense
|
50
|
|
68
|
|
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Current income tax expense
|
7
|
|
9
|
|
Deferred income tax expense (recovery) related to the origination and reversal of temporary differences
|
(9
|
)
|
24
|
|
Deferred income tax expense arising from the writedown of deferred income tax assets
(1)
|
19
|
|
4
|
|
Income tax expense
|
17
|
|
37
|
|
|
|
|
||
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Current income tax expense
|
7
|
|
9
|
|
Deferred income tax expense
|
10
|
|
28
|
|
Income tax expense
|
17
|
|
37
|
|
Period
|
Ownership and voting
rights percentage
|
|
Equity participation
percentage
|
|
Aug. 1, 2017 to June 21, 2018
|
64.0
|
|
64.0
|
|
June 22, 2018 to July 30, 2018
(1)
|
61.1
|
|
61.1
|
|
July 31, 2018 to Nov. 29, 2018
(2)
|
61.0
|
|
61.0
|
|
Nov. 30, 2018 to Dec. 31, 2018
(2)
|
60.9
|
|
60.9
|
|
Jan. 1, 2019 to March 31, 2019
(2)
|
60.8
|
|
60.8
|
|
|
3 months ended March 31
|
|||
|
2019
|
|
2018
|
|
Net earnings
|
|
|
||
TransAlta Cogeneration L.P.
|
4
|
|
3
|
|
TransAlta Renewables
|
31
|
|
25
|
|
|
35
|
|
28
|
|
|
|
|
||
Total comprehensive income
|
|
|
||
TransAlta Cogeneration L.P.
|
4
|
|
3
|
|
TransAlta Renewables
|
32
|
|
26
|
|
|
36
|
|
29
|
|
|
|
|
||
Distributions paid to non-controlling interests
|
|
|
||
TransAlta Cogeneration L.P.
|
15
|
|
20
|
|
TransAlta Renewables
|
17
|
|
21
|
|
|
32
|
|
41
|
|
As at
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
Equity attributable to non-controlling interests
|
|
|
||
TransAlta Cogeneration L.P.
|
164
|
|
176
|
|
TransAlta Renewables
|
976
|
|
961
|
|
|
1,140
|
|
1,137
|
|
Non-controlling interests per share (per cent)
|
|
|
||
TransAlta Cogeneration L.P.
|
49.99
|
|
49.99
|
|
TransAlta Renewables
|
39.2
|
|
39.1
|
|
As at
|
March 31, 2019
|
Dec. 31, 2018
|
||||
Description
|
Base fair value
|
|
Sensitivity
|
Base fair value
|
|
Sensitivity
|
Long-term power sale - US
|
734
|
|
+110
-184 |
801
|
|
+116
-116 |
Unit contingent power purchases
|
25
|
|
+3
-4 |
18
|
|
+4
-4 |
Structured products - Eastern US
|
8
|
|
+3
-3 |
6
|
|
+5
-5 |
Long-term wind energy sale - Eastern US
|
(37
|
)
|
+19
-19 |
(39
|
)
|
+21
-21 |
Others
|
11
|
|
+4
-4 |
9
|
|
+3
-3 |
|
3 months ended March 31, 2019
|
|
3 months ended March 31, 2018
|
||||||||||
|
Hedge
|
|
Non-hedge
|
|
Total
|
|
|
Hedge
|
|
Non-hedge
|
|
Total
|
|
Opening balance
|
689
|
|
6
|
|
695
|
|
|
719
|
|
52
|
|
771
|
|
Changes attributable to:
|
|
|
|
|
|
|
|
||||||
Market price changes on existing contracts
|
(21
|
)
|
3
|
|
(18
|
)
|
|
4
|
|
(19
|
)
|
(15
|
)
|
Market price changes on new contracts
|
—
|
|
5
|
|
5
|
|
|
—
|
|
1
|
|
1
|
|
Contracts settled
|
(17
|
)
|
3
|
|
(14
|
)
|
|
(22
|
)
|
(25
|
)
|
(47
|
)
|
Change in foreign exchange rates
|
(12
|
)
|
—
|
|
(12
|
)
|
|
18
|
|
1
|
|
19
|
|
Transfers into (out of) Level III
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(4
|
)
|
(4
|
)
|
Net risk management assets at end of period
|
639
|
|
17
|
|
656
|
|
|
719
|
|
6
|
|
725
|
|
Additional Level III information:
|
|
|
|
|
|
|
|
||||||
Gains (losses )recognized in other comprehensive
income
|
(33
|
)
|
—
|
|
(33
|
)
|
|
22
|
|
—
|
|
22
|
|
Total gains (losses) included in earnings before income
taxes
|
(17
|
)
|
8
|
|
(9
|
)
|
|
22
|
|
(17
|
)
|
5
|
|
Unrealized gains (losses) included in earnings before
income taxes relating to net assets held at period end
|
—
|
|
11
|
|
11
|
|
|
—
|
|
(42
|
)
|
(42
|
)
|
|
3 months ended March 31
|
|||
|
2019
|
|
2018
|
|
Unamortized net gain at beginning of period
|
49
|
|
105
|
|
New inception gain (loss)
|
—
|
|
(16
|
)
|
Change in foreign exchange rates
|
—
|
|
3
|
|
Amortization recorded in net earnings during the year
|
(8
|
)
|
(8
|
)
|
Unamortized net gain at end of period
|
41
|
|
84
|
|
▪
|
There is an economic relationship between the hedged item and the hedging instrument;
|
▪
|
The effect of credit risk does not dominate the value changes that result from that economic relationship; and
|
▪
|
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Corporation actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.
|
As at March 31, 2019
|
|
|
|
|||
|
Cash flow
hedges
|
|
Not
designated
as a hedge
|
|
Total
|
|
Commodity risk management
|
|
|
|
|
|
|
Current
|
45
|
|
(4
|
)
|
41
|
|
Long-term
|
591
|
|
(7
|
)
|
584
|
|
Net commodity risk management assets (liabilities)
|
636
|
|
(11
|
)
|
625
|
|
Other
|
|
|
|
|
|
|
Current
|
1
|
|
(3
|
)
|
(2
|
)
|
Long-term
|
3
|
|
2
|
|
5
|
|
Net other risk management assets (liabilities)
|
4
|
|
(1
|
)
|
3
|
|
|
|
|
|
|||
Total net risk management assets (liabilities)
|
640
|
|
(12
|
)
|
628
|
|
|
||||||
As at Dec. 31, 2018
|
|
|
|
|||
|
Cash flow
hedges
|
|
Not
designated
as a hedge
|
|
Total
|
|
Commodity risk management
|
|
|
|
|
|
|
Current
|
59
|
|
—
|
|
59
|
|
Long-term
|
628
|
|
(8
|
)
|
620
|
|
Net commodity risk management assets (liabilities)
|
687
|
|
(8
|
)
|
679
|
|
Other
|
|
|
|
|
|
|
Current
|
—
|
|
(3
|
)
|
(3
|
)
|
Long-term
|
—
|
|
1
|
|
1
|
|
Net other risk management assets (liabilities)
|
—
|
|
(2
|
)
|
(2
|
)
|
|
|
|
|
|||
Total net risk management assets (liabilities)
|
687
|
|
(10
|
)
|
677
|
|
|
Investment grade
(Per cent)
|
|
Non-investment grade
(Per cent)
|
|
Total
(Per cent)
|
|
Total
amount
|
|
Trade and other receivables
(1)
|
89
|
|
11
|
|
100
|
|
731
|
|
Long-term finance lease receivables
|
100
|
|
—
|
|
100
|
|
187
|
|
Risk management assets
(1)
|
99
|
|
1
|
|
100
|
|
770
|
|
Loan and notes receivable
(2)
|
—
|
|
100
|
|
100
|
|
102
|
|
Total
|
|
|
|
1,790
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and thereafter
|
|
Total
|
|
Accounts payable and accrued liabilities
|
458
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
458
|
|
Long-term debt
(1)
|
69
|
|
486
|
|
90
|
|
1,040
|
|
142
|
|
1,432
|
|
3,259
|
|
Commodity risk management liabilities
|
29
|
|
65
|
|
125
|
|
126
|
|
115
|
|
165
|
|
625
|
|
Other risk management (assets) liabilities
|
(1
|
)
|
1
|
|
(2
|
)
|
5
|
|
—
|
|
—
|
|
3
|
|
Lease obligations
|
15
|
|
17
|
|
11
|
|
6
|
|
3
|
|
26
|
|
78
|
|
Interest on long-term debt and lease
obligations
(2)
|
121
|
|
156
|
|
133
|
|
126
|
|
85
|
|
711
|
|
1,332
|
|
Dividends payable
|
47
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
47
|
|
Total
|
738
|
|
725
|
|
357
|
|
1,303
|
|
345
|
|
2,334
|
|
5,802
|
|
|
Land
|
|
Coal
generation
|
|
Gas generation
|
|
Renewable
generation
|
|
Mining property
and equipment
|
|
Assets under
construction
|
|
Capital spares
and other
(1)
|
|
Total
|
|
As at As at Dec. 31, 2018
|
94
|
|
2,172
|
|
836
|
|
2,125
|
|
508
|
|
200
|
|
229
|
|
6,164
|
|
Adjustments on implementation of IFRS 16
(Note 2)
(2)
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
(58
|
)
|
—
|
|
—
|
|
(62
|
)
|
Additions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29
|
|
5
|
|
34
|
|
Acquisitions
(Note 3)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
|
—
|
|
50
|
|
Depreciation
|
—
|
|
(76
|
)
|
(19
|
)
|
(30
|
)
|
(23
|
)
|
—
|
|
(4
|
)
|
(152
|
)
|
Revisions and additions to decommissioning and restoration costs
|
—
|
|
8
|
|
1
|
|
2
|
|
3
|
|
—
|
|
—
|
|
14
|
|
Retirement of assets and (disposals)
|
(1
|
)
|
1
|
|
—
|
|
(2
|
)
|
(1
|
)
|
—
|
|
(1
|
)
|
(4
|
)
|
Change in foreign exchange rates
|
—
|
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(16
|
)
|
Transfers
|
—
|
|
17
|
|
3
|
|
1
|
|
24
|
|
(53
|
)
|
9
|
|
1
|
|
As at March 31, 2019
|
93
|
|
2,118
|
|
817
|
|
2,088
|
|
452
|
|
224
|
|
237
|
|
6,029
|
|
|
Land
|
|
Buildings
|
|
Vehicles
|
|
Equipment
|
|
Total
|
|
New leases recognized Jan. 1, 2019
|
29
|
|
22
|
|
1
|
|
—
|
|
52
|
|
Adjustments on recognition
(1)
|
(1
|
)
|
(4
|
)
|
—
|
|
—
|
|
(5
|
)
|
Transfers from PP&E, intangibles and other assets
|
—
|
|
—
|
|
3
|
|
35
|
|
38
|
|
As at Jan. 1, 2019
|
28
|
|
18
|
|
4
|
|
35
|
|
85
|
|
Depreciation
|
—
|
|
(1
|
)
|
—
|
|
(3
|
)
|
(4
|
)
|
As at March 31, 2019
|
28
|
|
17
|
|
4
|
|
32
|
|
81
|
|
As at
|
March 31, 2019
|
Dec. 31, 2018
|
||||||||||
|
Carrying
value
|
|
Face
value
|
|
Interest
(1)
|
|
Carrying
value
|
|
Face
value
|
|
Interest
(1)
|
|
Credit facilities
(2)
|
410
|
|
410
|
|
3.6
|
%
|
339
|
|
339
|
|
3.8
|
%
|
Debentures
|
647
|
|
651
|
|
5.8
|
%
|
647
|
|
651
|
|
5.8
|
%
|
Senior notes
(3)
|
930
|
|
940
|
|
5.4
|
%
|
943
|
|
955
|
|
5.4
|
%
|
Non-recourse
(4)
|
1,206
|
|
1,221
|
|
4.4
|
%
|
1,236
|
|
1,250
|
|
4.4
|
%
|
Other
(5)
|
37
|
|
37
|
|
9.2
|
%
|
39
|
|
39
|
|
9.2
|
%
|
|
3,230
|
|
3,259
|
|
|
|
3,204
|
|
3,234
|
|
|
|
Lease obligations
|
78
|
|
|
|
|
|
63
|
|
|
|
|
|
|
3,308
|
|
|
|
|
|
3,267
|
|
|
|
|
|
Less: current portion of long-term debt
|
(85
|
)
|
|
|
|
|
(130
|
)
|
|
|
|
|
Less: current portion of lease obligations
|
(20
|
)
|
|
|
|
|
(18
|
)
|
|
|
|
|
Total current long-term debt and lease obligations
|
(105
|
)
|
|
|
|
|
(148
|
)
|
|
|
|
|
Total credit facilities, long-term debt, and lease obligations
|
3,203
|
|
|
|
|
|
3,119
|
|
|
|
|
|
|
3 months ended March 31
|
|||||||
|
2019
|
2018
|
||||||
|
Common
shares
(millions)
|
|
Amount
|
|
Common
shares
(millions)
|
|
Amount
|
|
Issued and outstanding, beginning of period
|
284.6
|
|
3,059
|
|
287.9
|
|
3,094
|
|
Shares purchased and retired under NCIB
(1)
|
—
|
|
—
|
|
(0.4
|
)
|
(4
|
)
|
Issued and outstanding, end of period
|
284.6
|
|
3,059
|
|
287.5
|
|
3,090
|
|
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Net earnings (loss) attributable to common shareholders
|
(65
|
)
|
65
|
|
Basic and diluted weighted average number of common shareholders outstanding (millions)
|
285
|
|
288
|
|
Net earnings (loss) per share attributable to common shareholders,
basic and diluted
|
(0.23
|
)
|
0.23
|
|
Grant month
|
Number of stock options granted
(millions)
|
|
Exercise
price
|
|
Vesting
period
(years)
|
|
Expiration
length
(years)
|
|
|
January 2019
|
1.3
|
|
$
|
5.59
|
|
3
|
|
7
|
|
January 2018
|
0.7
|
|
$
|
7.45
|
|
3
|
|
7
|
|
|
|
3 months ended March 31
|
|||
Series
|
Quarterly amounts per share
|
2019
(1)
|
|
2018
|
|
A
|
0.16931
|
—
|
|
2
|
|
B
|
0.23073
(2)
|
—
|
|
—
|
|
C
|
0.25169
|
—
|
|
3
|
|
E
|
0.32463
|
—
|
|
3
|
|
G
|
0.33125
|
—
|
|
2
|
|
Total for period
|
|
—
|
|
10
|
|
3 months ended March 31, 2019
|
Canadian
Coal
|
|
US
Coal
|
|
Canadian
Gas
|
|
Australian
Gas
|
|
Wind and
Solar
|
|
Hydro
|
|
Energy
Marketing
|
|
Corporate
|
|
Total
|
|
Revenues
|
225
|
|
146
|
|
65
|
|
41
|
|
89
|
|
37
|
|
46
|
|
(1
|
)
|
648
|
|
Fuel, carbon, and purchased
power
|
175
|
|
154
|
|
31
|
|
2
|
|
4
|
|
1
|
|
—
|
|
(1
|
)
|
366
|
|
Gross margin
(1)
|
50
|
|
(8
|
)
|
34
|
|
39
|
|
85
|
|
36
|
|
46
|
|
—
|
|
282
|
|
Operations, maintenance, and
administration
|
33
|
|
14
|
|
11
|
|
10
|
|
12
|
|
8
|
|
9
|
|
7
|
|
104
|
|
Depreciation and amortization
|
61
|
|
18
|
|
10
|
|
11
|
|
29
|
|
8
|
|
1
|
|
7
|
|
145
|
|
Taxes, other than income taxes
|
3
|
|
1
|
|
—
|
|
—
|
|
2
|
|
1
|
|
—
|
|
—
|
|
7
|
|
Net other operating income
|
(10
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
Operating income (loss)
|
(37
|
)
|
(41
|
)
|
13
|
|
18
|
|
42
|
|
19
|
|
36
|
|
(14
|
)
|
36
|
|
Finance lease income
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
Net interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50
|
)
|
Foreign exchange loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Earnings before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
3 months ended March 31, 2018
|
Canadian
Coal
|
|
US
Coal
|
|
Canadian
Gas
|
|
Australian
Gas
|
|
Wind and
Solar
|
|
Hydro
|
|
Energy
Marketing
|
|
Corporate
|
|
Total
|
|
Revenues
|
269
|
|
87
|
|
62
|
|
41
|
|
86
|
|
27
|
|
17
|
|
(1
|
)
|
588
|
|
Fuel, carbon, and purchased
power
|
196
|
|
44
|
|
29
|
|
2
|
|
6
|
|
1
|
|
—
|
|
(1
|
)
|
277
|
|
Gross margin
(1)
|
73
|
|
43
|
|
33
|
|
39
|
|
80
|
|
26
|
|
17
|
|
—
|
|
311
|
|
Operations, maintenance, and
administration
|
47
|
|
15
|
|
13
|
|
9
|
|
13
|
|
8
|
|
8
|
|
20
|
|
133
|
|
Depreciation and amortization
|
50
|
|
16
|
|
11
|
|
12
|
|
27
|
|
8
|
|
—
|
|
6
|
|
130
|
|
Taxes, other than income taxes
|
3
|
|
1
|
|
1
|
|
—
|
|
2
|
|
1
|
|
—
|
|
—
|
|
8
|
|
Termination of Sundance B and
C PPAs
|
(157
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(157
|
)
|
Net other operating income
|
(11
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(11
|
)
|
Operating income (loss)
|
141
|
|
11
|
|
8
|
|
18
|
|
38
|
|
9
|
|
9
|
|
(26
|
)
|
208
|
|
Finance lease income
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
Net interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(68
|
)
|
Foreign exchange gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Earnings before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140
|
|
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Depreciation and amortization expense on the Condensed Consolidated
Statements of Earnings
|
145
|
|
130
|
|
Depreciation included in fuel and purchased power
|
29
|
|
31
|
|
Depreciation and amortization on the Condensed Consolidated
Statements of Cash Flows
|
174
|
|
161
|
|
|
3 months ended March 31,
|
|||
|
2019
|
|
2018
|
|
Revenues
|
648
|
|
588
|
|
Net earnings (loss) attributable to common shareholders
|
(65
|
)
|
65
|
|
Cash flow from operating activities
|
82
|
|
425
|
|
Comparable EBITDA
(1,2,3)
|
221
|
|
393
|
|
FFO
(1,3)
|
169
|
|
318
|
|
FCF
(1,3)
|
95
|
|
238
|
|
Net earnings (loss) per share attributable to common shareholders, basic and diluted
|
(0.23
|
)
|
0.23
|
|
FFO per share
(1)
|
0.59
|
|
1.10
|
|
FCF per share
(1)
|
0.33
|
|
0.83
|
|
Dividends declared per common share
|
—
|
|
0.04
|
|
Dividends declared per preferred share
(4)
|
—
|
|
0.26
|
|
|
|
|
||
As at
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
Total assets
|
9,328
|
|
9,428
|
|
Total consolidated net debt
(5)
|
3,191
|
|
3,141
|
|
Total long-term liabilities
|
4,537
|
|
4,421
|
|
•
|
The Australian Gas, Wind and Solar, Hydro, Energy Marketing and Corporate segments generated cash flow consistent with or better than the same period last year.
|
•
|
In Alberta, Canadian Coal, Hydro and our wind assets benefited from higher power prices. Average prices during the
first
quarter in Alberta increased to
$69
per MWh from
$35
per MWh, compared to the same period in
2018
, mainly reflecting the impact of the extreme cold weather during February and March of 2019.
|
•
|
Excluding the one time receipt for the termination of the Sundance B and C PPAs of $157 million received in 2018, Canadian Coal cash flow was $10 million lower in the first
three
months of
2019
compared to
2018
, mainly due to higher sustaining capital spend.
|
•
|
US Coal cash flow was significantly lower in the first quarter of 2019 due to an unplanned outage for one of the units during extreme market conditions driven by low temperatures and high natural gas prices in early March 2019.
|
▪
|
On March 25, 2019, the Corporation announced a $750 million investment in exchangeable securities by Brookfield Renewable Partners or its affiliates (collectively “Brookfield”) that provides the financial flexibility to drive TransAlta's transition to 100% clean energy by 2025, recognizes the anticipated future value of TransAlta's Alberta hydro assets, and also accelerates the Company's plan to return capital to its shareholders. Brookfield brings its extensive hydro experience with the addition of two
|
▪
|
On April 12, 2019 TransAlta signed an agreement to purchase a 49 per cent interest in the 136.8 MW Skookumchuk Wind Energy Facility.
|
▪
|
On March 28, 2019, the Corporation closed its acquisition of the Antrim wind project following the receipt of required regulatory approvals.
|
▪
|
On March 8, 2019, the Alberta Electric System Operator ("AESO") approved the Corporation's decision to extend the mothballing of Sundance Unit 3 and 5 until Nov. 1, 2021.
|
▪
|
On March 4, 2019, TransAlta approved the WindCharger Battery Storage Project, an innovative 10 MW / 20 MWh energy storage project.
|
(i)
|
Certain assets we own in Canada are fully contracted and recorded as finance leases under IFRS. We believe it is more appropriate to reflect the payments we receive under the contracts as a capacity payment in our revenues instead of as finance lease income and a decrease in finance lease receivables. We depreciate these assets over their expected lives;
|
(ii)
|
We also reclassify the depreciation on our mining equipment from fuel and purchased power to reflect the actual cash cost of our business in our comparable EBITDA;
|
(iii)
|
In December 2016, we agreed to terminate our existing arrangement with the Independent Electricity System Operator (“IESO”) relating to our Mississauga cogeneration facility in Ontario and entered into a new Non-Utility Generator (“NUG”) Enhanced
|
(iv)
|
On commissioning the South Hedland Power Station in Australia, we prepaid approximately $74 million of electricity transmission and distribution costs. Interest income is recorded on the prepaid funds. We reclassify this interest income as a reduction in the transmission and distribution costs expensed each period to reflect the net cost to the business; and
|
(v)
|
During the first quarter of 2019, we revised our approach to reporting adjustments to arrive at comparable EBITDA, mainly to be more comparable with other companies in the industry. Comparable EBITDA is now adjusted to exclude the impact of unrealized mark-to-market gains or losses. Both the current and prior period amounts have been adjusted to reflect this change.
|
|
|
|
3 months ended March 31
(1)
|
|
||
|
|
|
2019
|
|
2018
|
|
Net earnings (loss) attributable to common shareholders
(2)
|
|
(65
|
)
|
65
|
|
|
Net earnings attributable to non-controlling interests
|
|
35
|
|
28
|
|
|
Preferred share dividends
|
|
|
—
|
|
10
|
|
Net earnings (loss)
|
|
|
(30
|
)
|
103
|
|
Adjustments to reconcile net income to comparable EBITDA
|
|
|
|
|||
Depreciation and amortization
|
|
|
145
|
|
130
|
|
Foreign exchange loss
|
|
|
1
|
|
2
|
|
Net interest expense
|
|
|
50
|
|
68
|
|
Income tax expense
|
|
|
17
|
|
37
|
|
Comparable reclassifications
|
|
|
|
|||
Decrease in finance lease receivables
|
|
6
|
|
15
|
|
|
Mine depreciation included in fuel cost
|
|
29
|
|
31
|
|
|
Australian interest income
|
|
1
|
|
1
|
|
|
Unrealized gains (losses) from risk management activities
|
|
2
|
|
(23
|
)
|
|
Adjustments to earnings to arrive at comparable EBITDA
|
|
|
|
|||
Impacts associated with Mississauga recontracting
(3)
|
—
|
|
29
|
|
||
Comparable EBITDA
|
|
|
221
|
|
393
|
|
Comparable EBITDA - excluding the PPA settlement
|
221
|
|
236
|
|
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
||
Cash flow from operating activities
(1)
|
|
82
|
|
425
|
|
|
Change in non-cash operating working capital balances
|
80
|
|
(123
|
)
|
||
Cash flow from operations before changes in working capital
|
162
|
|
302
|
|
||
Adjustment:
|
|
|
|
|||
Decrease in finance lease receivable
|
|
6
|
|
15
|
|
|
Other
|
|
|
1
|
|
1
|
|
FFO
|
|
169
|
|
318
|
|
|
Deduct:
|
|
|
|
|||
Sustaining capital
(2)
|
(25
|
)
|
(20
|
)
|
||
Productivity capital
|
(2
|
)
|
(4
|
)
|
||
Dividends paid on preferred shares
(3)
|
(10
|
)
|
(10
|
)
|
||
Distributions paid to subsidiaries' non-controlling interests
|
(32
|
)
|
(41
|
)
|
||
Payments on lease obligations
(2)
|
(5
|
)
|
(4
|
)
|
||
Other
|
|
—
|
|
(1
|
)
|
|
FCF
|
|
95
|
|
238
|
|
|
Weighted average number of common shares outstanding in the year
|
285
|
|
288
|
|
||
FFO per share
|
|
0.59
|
|
1.10
|
|
|
FCF per share
|
0.33
|
|
0.83
|
|
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
||
Comparable EBITDA
(1)
|
221
|
|
393
|
|
||
Interest expense
|
(42
|
)
|
(53
|
)
|
||
Provisions
|
4
|
|
(3
|
)
|
||
Current income tax expense
|
(7
|
)
|
(9
|
)
|
||
Realized foreign exchange gain (loss)
|
(5
|
)
|
3
|
|
||
Decommissioning and restoration costs settled
|
(7
|
)
|
(7
|
)
|
||
Other cash and non-cash items
|
5
|
|
(6
|
)
|
||
FFO
|
|
169
|
|
318
|
|
|
Deduct:
|
|
|
|
|||
Sustaining capital
(2)
|
(25
|
)
|
(20
|
)
|
||
Productivity capital
|
(2
|
)
|
(4
|
)
|
||
Dividends paid on preferred shares
(3)
|
(10
|
)
|
(10
|
)
|
||
Distributions paid to subsidiaries' non-controlling interests
|
(32
|
)
|
(41
|
)
|
||
Payments on lease obligations
(2)
|
|
(5
|
)
|
(4
|
)
|
|
Other
|
|
—
|
|
(1
|
)
|
|
FCF
|
|
95
|
|
238
|
|
|
|
|
3 months ended March 31,
|
|
||
Supplemental disclosure
|
2019
|
|
2018
|
|
||
FFO - excluding the PPA settlement
|
|
169
|
|
161
|
|
|
FCF - excluding the PPA settlement
|
|
95
|
|
81
|
|
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
||
Segmented cash inflow (outflow)
(1)
|
|
|
|
|||
Canadian Coal
(2)
|
|
|
41
|
|
208
|
|
US Coal
|
|
|
(12
|
)
|
18
|
|
Canadian Gas
|
|
|
24
|
|
60
|
|
Australian Gas
|
|
|
30
|
|
31
|
|
Wind and Solar
|
|
|
66
|
|
65
|
|
Hydro
|
|
|
24
|
|
16
|
|
Generation cash inflow
|
|
|
173
|
|
398
|
|
Energy Marketing
|
|
|
24
|
|
(18
|
)
|
Corporate
|
|
|
(11
|
)
|
(25
|
)
|
Total comparable cash inflow
|
|
186
|
|
355
|
|
|
Total comparable cash inflow - excluding PPA settlement
|
186
|
|
198
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Availability (%)
|
91.3
|
|
90.5
|
|
Contract production (GWh)
|
2,062
|
|
3,300
|
|
Merchant production (GWh)
|
1,657
|
|
909
|
|
Total production (GWh)
|
3,719
|
|
4,209
|
|
Gross installed capacity (MW)
(1)
|
3,231
|
|
3,231
|
|
Revenues
(2)
|
235
|
|
268
|
|
Fuel, carbon costs, and purchased power
(2)
|
146
|
|
165
|
|
Comparable gross margin
|
89
|
|
103
|
|
Operations, maintenance, and administration
|
33
|
|
47
|
|
Taxes, other than income taxes
|
3
|
|
3
|
|
Termination of Sundance B and C PPAs
|
—
|
|
(157
|
)
|
Net other operating income
|
(10
|
)
|
(11
|
)
|
Comparable EBITDA
(2)
|
63
|
|
221
|
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Routine capital
|
3
|
|
4
|
|
Mine capital
|
5
|
|
2
|
|
Planned major maintenance
|
3
|
|
—
|
|
Total sustaining capital expenditures
(3)
|
11
|
|
6
|
|
Productivity capital
|
2
|
|
1
|
|
Total sustaining and productivity capital expenditures
|
13
|
|
7
|
|
|
|
|
||
Provisions
|
1
|
|
(3
|
)
|
Payments on lease obligations
(3)
|
4
|
|
3
|
|
Decommissioning and restoration costs settled
|
4
|
|
6
|
|
Canadian Coal cash flow
|
41
|
|
208
|
|
|
3 months ended March 31,
|
|
||
Supplemental disclosure
|
2019
|
|
2018
|
|
Comparable EBITDA - excluding the PPA settlement
|
63
|
|
64
|
|
Canadian Coal cash flow - excluding the PPA settlement
|
41
|
|
51
|
|
|
3 months ended March 31,
|
|||
|
2019
|
|
2018
|
|
Availability (%)
(1)
|
76.9
|
|
99.7
|
|
Contract sales (GWh)
|
820
|
|
821
|
|
Merchant sales (GWh)
|
2,174
|
|
749
|
|
Purchased power (GWh)
|
(969
|
)
|
(852
|
)
|
Total production (GWh)
|
2,025
|
|
718
|
|
Gross installed capacity (MW)
|
1,340
|
|
1,340
|
|
Revenues
(2)
|
159
|
|
85
|
|
Fuel and purchased power
|
154
|
|
44
|
|
Comparable gross margin
|
5
|
|
41
|
|
Operations, maintenance, and administration
|
14
|
|
15
|
|
Taxes, other than income taxes
|
1
|
|
1
|
|
Comparable EBITDA
(2)
|
(10
|
)
|
25
|
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Planned major maintenance
|
—
|
|
5
|
|
Total sustaining capital expenditures
(3)
|
—
|
|
5
|
|
|
|
|
||
Payments on lease obligations
(3)
|
—
|
|
1
|
|
Decommissioning and restoration costs settled
|
2
|
|
1
|
|
US Coal cash flow
|
(12
|
)
|
18
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Availability (%)
|
99.5
|
|
98.7
|
|
Contract production (GWh)
|
437
|
|
414
|
|
Merchant production (GWh)
|
159
|
|
39
|
|
Total production (GWh)
|
596
|
|
453
|
|
Gross installed capacity (MW)
|
945
|
|
953
|
|
Revenues
(1)
|
72
|
|
104
|
|
Fuel and purchased power
|
31
|
|
29
|
|
Comparable gross margin
|
41
|
|
75
|
|
Operations, maintenance, and administration
|
11
|
|
13
|
|
Taxes, other than income taxes
|
—
|
|
1
|
|
Comparable EBITDA
(1)
|
30
|
|
61
|
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Routine capital
|
5
|
|
1
|
|
Planned major maintenance
|
1
|
|
1
|
|
Total sustaining capital expenditures
|
6
|
|
2
|
|
Productivity capital
|
—
|
|
1
|
|
Total sustaining and productivity capital expenditures
|
6
|
|
3
|
|
|
|
|
||
Provisions and other
|
—
|
|
(2
|
)
|
Canadian Gas cash flow
|
24
|
|
60
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Availability (%)
|
81.3
|
|
91.7
|
|
Contract production (GWh)
|
466
|
|
440
|
|
Gross installed capacity (MW)
|
450
|
|
450
|
|
Revenues
|
41
|
|
41
|
|
Fuel and purchased power
|
1
|
|
1
|
|
Comparable gross margin
|
40
|
|
40
|
|
Operations, maintenance, and administration
|
10
|
|
9
|
|
Comparable EBITDA
|
30
|
|
31
|
|
|
|
|
||
Australian Gas cash flow
|
30
|
|
31
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Availability (%)
|
95.0
|
|
94.5
|
|
Contract production (GWh)
|
757
|
|
749
|
|
Merchant production (GWh)
|
214
|
|
279
|
|
Total production (GWh)
|
971
|
|
1,028
|
|
Gross installed capacity (MW)
|
1,382
|
|
1,363
|
|
Revenues
(1)
|
87
|
|
89
|
|
Fuel and purchased power
|
4
|
|
6
|
|
Comparable gross margin
|
83
|
|
83
|
|
Operations, maintenance, and administration
|
12
|
|
13
|
|
Taxes, other than income taxes
|
2
|
|
2
|
|
Comparable EBITDA
(1)
|
69
|
|
68
|
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Planned major maintenance
|
2
|
|
3
|
|
Total sustaining and productivity capital expenditures
|
2
|
|
3
|
|
|
|
|
||
Decommissioning and restoration costs settled
|
1
|
|
—
|
|
Wind and Solar cash flow
|
66
|
|
65
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Production
|
|
|
||
Energy contracted
|
|
|
||
Alberta hydro PPA assets (GWh)
(1)
|
318
|
|
282
|
|
Other hydro energy (GWh)
(1)
|
27
|
|
36
|
|
Energy merchant
|
|
|
||
Other hydro energy (GWh)
|
3
|
|
5
|
|
Total energy production (GWh)
|
348
|
|
323
|
|
Ancillary services volumes (GWh)
(2)
|
781
|
|
946
|
|
Gross installed capacity (MW)
|
926
|
|
926
|
|
Revenues
|
|
|
||
Alberta hydro PPA assets energy
|
29
|
|
10
|
|
Alberta hydro PPA assets ancillary services
|
29
|
|
15
|
|
Capacity payments received under Alberta hydro PPA
(3)
|
14
|
|
14
|
|
Other revenue
(4)
|
5
|
|
6
|
|
Total gross revenues
|
77
|
|
45
|
|
Net payment relating to Alberta hydro PPA
|
(40
|
)
|
(18
|
)
|
Revenues
|
37
|
|
27
|
|
|
|
|
||
Fuel and purchased power
|
1
|
|
1
|
|
Comparable gross margin
|
36
|
|
26
|
|
Operations, maintenance, and administration
|
8
|
|
8
|
|
Taxes, other than income taxes
|
1
|
|
1
|
|
Comparable EBITDA
(5)
|
27
|
|
17
|
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Routine capital
|
1
|
|
—
|
|
Planned major maintenance
|
2
|
|
1
|
|
Total sustaining capital expenditures
|
3
|
|
1
|
|
|
|
|
||
Hydro cash flow
|
24
|
|
16
|
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Revenues and gross margin
(1)
|
28
|
|
(2
|
)
|
Operations, maintenance, and administration
|
9
|
|
8
|
|
Comparable EBITDA
(1)
|
19
|
|
(10
|
)
|
Deduct:
|
|
|
||
Provisions and other
|
(5
|
)
|
8
|
|
Energy Marketing cash flow
|
24
|
|
(18
|
)
|
|
3 months ended March 31,
|
|
||
|
2019
|
|
2018
|
|
Operations, maintenance, and administration
|
(7
|
)
|
(20
|
)
|
Comparable EBITDA
|
(7
|
)
|
(20
|
)
|
Deduct:
|
|
|
||
Sustaining capital:
|
|
|
||
Routine capital
|
3
|
|
3
|
|
Total sustaining capital expenditures
|
3
|
|
3
|
|
Productivity capital
|
—
|
|
2
|
|
Total sustaining and productivity capital expenditures
|
3
|
|
5
|
|
|
|
|
||
Payments on lease obligations
(1)
|
1
|
|
—
|
|
Corporate cash flow
|
(11
|
)
|
(25
|
)
|
For the twelve months ended
|
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
FFO
|
|
778
|
|
927
|
|
Less: Early termination payment received on Sundance B and C PPAs
|
|
—
|
|
(157
|
)
|
Add: Interest on debt and lease obligations, net of interest income and capitalized interest
|
|
162
|
|
174
|
|
FFO before interest
|
|
940
|
|
944
|
|
Interest on debt and lease obligations, net of interest income
|
|
165
|
|
176
|
|
Add: 50 per cent of dividends paid on preferred shares
(1)
|
|
20
|
|
20
|
|
Adjusted interest
|
|
185
|
|
196
|
|
FFO before interest to adjusted interest coverage (times)
|
|
5.1
|
|
4.8
|
|
As at
|
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
FFO
(1)
|
|
778
|
|
927
|
|
Less: Early termination payment received on Sundance B and C PPAs
(1)
|
|
—
|
|
(157
|
)
|
Less: 50 per cent of dividends paid on preferred shares
(1, 2)
|
|
(20
|
)
|
(20
|
)
|
Adjusted FFO
|
|
758
|
|
750
|
|
Period-end long-term debt
(3)
|
|
3,308
|
|
3,267
|
|
Less: Cash and cash equivalents
|
|
(109
|
)
|
(89
|
)
|
Less: Principal portion of TransAlta OCP restricted cash
|
|
—
|
|
(27
|
)
|
Add: 50 per cent of issued preferred shares
|
|
471
|
|
471
|
|
Fair value asset of hedging instruments on debt
(4)
|
|
(8
|
)
|
(10
|
)
|
Adjusted net debt
|
|
3,662
|
|
3,612
|
|
Adjusted FFO to adjusted net debt (%)
|
|
20.7
|
|
20.8
|
|
As at
|
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
Period-end long-term debt
(1)
|
|
3,308
|
|
3,267
|
|
Less: Cash and cash equivalents
|
|
(109
|
)
|
(89
|
)
|
Less: Principal portion of TransAlta OCP restricted cash
|
|
—
|
|
(27
|
)
|
Add: 50 per cent of issued preferred shares
|
|
471
|
|
471
|
|
Fair value asset of hedging instruments on debt
(2)
|
|
(8
|
)
|
(10
|
)
|
Adjusted net debt
|
|
3,662
|
|
3,612
|
|
Comparable EBITDA
(3, 4)
|
|
980
|
|
1,152
|
|
Less: Early termination payment received on Sundance B and C PPAs
|
|
—
|
|
(157
|
)
|
Adjusted comparable EBITDA
(3)
|
|
980
|
|
995
|
|
Adjusted net debt to comparable EBITDA
(3)
(times)
|
|
3.7
|
|
3.6
|
|
▪
|
Sundance Unit 3 will remain mothballed until Nov. 1, 2021, extended from April 1, 2020; and
|
▪
|
Sundance Unit 5 will remain mothballed until Nov. 1, 2021, extended from April 1, 2020.
|
|
|
March 31, 2019
|
Dec. 31, 2018
|
||||||
As at
|
$
|
|
%
|
|
$
|
|
%
|
|
|
TransAlta Corporation
|
|
|
|
|
|||||
Recourse debt - CAD debentures
|
|
647
|
|
9
|
|
647
|
|
9
|
|
Recourse debt - US senior notes
|
|
930
|
|
13
|
|
943
|
|
13
|
|
Credit facilities
|
|
227
|
|
3
|
|
174
|
|
2
|
|
US tax equity financing
|
|
26
|
|
1
|
|
28
|
|
—
|
|
Other
|
|
11
|
|
—
|
|
11
|
|
—
|
|
Less: Cash and cash equivalents
|
(59
|
)
|
(1
|
)
|
(16
|
)
|
—
|
|
|
Less: Principal portion of TransAlta OCP restricted cash
|
—
|
|
—
|
|
(27
|
)
|
—
|
|
|
Less: fair value asset of economic hedging instruments on debt
|
(8
|
)
|
—
|
|
(10
|
)
|
—
|
|
|
Net recourse debt
|
1,774
|
|
25
|
|
1,750
|
|
24
|
|
|
Non-recourse debt
|
442
|
|
6
|
|
469
|
|
6
|
|
|
Lease obligations
|
62
|
|
1
|
|
63
|
|
1
|
|
|
Total consolidated net debt - TransAlta Corporation
|
2,278
|
|
32
|
|
2,282
|
|
31
|
|
|
TransAlta Renewables
|
|
|
|
|
|||||
Credit facility
|
|
183
|
|
3
|
|
165
|
|
2
|
|
Less: cash and cash equivalents
|
(50
|
)
|
(1
|
)
|
(73
|
)
|
(1
|
)
|
|
Net recourse debt
|
133
|
|
2
|
|
92
|
|
1
|
|
|
Non-recourse debt
|
764
|
|
11
|
|
767
|
|
11
|
|
|
Lease obligations
|
16
|
|
—
|
|
—
|
|
—
|
|
|
Total net debt - TransAlta Renewables
|
913
|
|
13
|
|
859
|
|
12
|
|
|
Total consolidated net debt
|
3,191
|
|
45
|
|
3,141
|
|
43
|
|
|
Non-controlling interests
|
1,140
|
|
16
|
|
1,137
|
|
16
|
|
|
Equity attributable to shareholders
|
|
|
|
|
|||||
Common shares
|
3,059
|
|
42
|
|
3,059
|
|
42
|
|
|
Preferred shares
|
942
|
|
13
|
|
942
|
|
13
|
|
|
Contributed surplus, deficit, and
accumulated other comprehensive income
|
|
(1,124
|
)
|
(16
|
)
|
(1,004
|
)
|
(14
|
)
|
Total capital
|
7,208
|
|
100
|
|
7,275
|
|
100
|
|
As at
|
May 13, 2019
|
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
|
Number of shares
(millions)
|
|||||
Common shares issued and outstanding, end of period
|
284.6
|
|
284.6
|
|
287.5
|
|
Preferred shares
|
|
|
|
|
|
|
Series A
|
10.2
|
|
10.2
|
|
10.2
|
|
Series B
|
1.8
|
|
1.8
|
|
1.8
|
|
Series C
|
11.0
|
|
11.0
|
|
11.0
|
|
Series E
|
9.0
|
|
9.0
|
|
9.0
|
|
Series G
|
6.6
|
|
6.6
|
|
6.6
|
|
Preferred shares issued and outstanding, end of period
|
38.6
|
|
38.6
|
|
38.6
|
|
|
3 months ended March 31
|
|
||
|
2019
|
|
2018
|
|
Interest on debt
|
41
|
|
53
|
|
Interest income
|
(2
|
)
|
(3
|
)
|
Capitalized interest
|
(1
|
)
|
—
|
|
Loss on early redemption of US Senior Notes and Debentures
|
—
|
|
5
|
|
Interest on lease obligations
|
1
|
|
1
|
|
Credit facility and bank charges
|
3
|
|
3
|
|
Other interest
|
2
|
|
3
|
|
Accretion of provisions
|
6
|
|
6
|
|
Net interest expense
|
50
|
|
68
|
|
|
|
|
Common
|
|
Preferred Series dividends per share
|
|||||||||
|
Payable date
|
dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
Declaration date
|
Common Shares
|
Preferred Shares
|
per share
|
|
A
|
|
B
|
|
C
|
|
E
|
|
G
|
|
April 15, 2019
|
July 1, 2019
|
June 30, 2019
|
0.04
|
|
0.16931
|
|
0.23136
|
|
0.25169
|
|
0.32463
|
|
0.33125
|
|
|
Increase/
|
|
|
|
Assets
|
(decrease)
|
|
|
Primary factors explaining change
|
Cash and cash equivalents
|
20
|
|
|
Timing of receipts and payments
|
Trade and other receivables
|
(25
|
)
|
|
Timing of customer receipts and seasonality of revenues.
|
Prepaid expenses
|
12
|
|
|
Annual property tax and insurance payments ($11 million)
|
Inventory
|
(16
|
)
|
|
Reduced coal inventory at Canadian Coal operations
|
Restricted cash
|
(35
|
)
|
|
Restricted cash related to the OCP bonds was used as part of the debt repayment
|
Property, plant, and equipment, net
|
(135
|
)
|
|
Depreciation for the period ($152 million), adjustments on implementing IFRS 16 ($62 million), unfavourable change in foreign exchange rates ($15 million), partially offset by additions ($34 million), acquisition relating to Antrim ($49 million) and revisions to decommissioning and restoration costs ($14 million)
|
Right of use assets, net
|
81
|
|
|
Transfers from property, plant and equipment, intangible assets and other assets ($38 million) and new right of use assets recognized under IFRS 16 ($47 million) (see Accounting Changes section for further details)
|
Risk management assets (current and long term)
|
(38
|
)
|
|
Market changes, contract settlements and unfavourable foreign exchange rates, partially offset by new contracts entered into during the period
|
Other assets
|
49
|
|
|
Note receivable for the project development costs related to the Pioneer Pipeline and and Brookfield structuring fee ($7.5 million)
|
Others
|
(13
|
)
|
|
|
Total decrease in assets
|
(100
|
)
|
|
|
|
|
|
|
|
|
Increase/
|
|
|
|
Liabilities and equity
|
(decrease)
|
|
|
Primary factors explaining change
|
Accounts payable and accrued liabilities
|
(39
|
)
|
|
Timing of payments and accruals
|
Dividends payable
|
(11
|
)
|
|
Timing of the declaration of common share dividends
|
Credit facilities, long term debt, and lease obligations (including current portion)
|
41
|
|
|
Drawings on the credit facility ($71 million) and net increase in lease obligations on implementation of IFRS 16 ($15 million) were partially offset by favourable changes in foreign exchange ($15 million) and repayments of long-term debt ($29 million)
|
Contract liabilities
|
17
|
|
|
Contract liabilities moved from defined benefit obligation and other long term liabilities as they are no longer considered leases on the adoption of IFRS 16 (see the Accounting Changes section for further details)
|
Defined benefit obligation and other long term liabilities
|
8
|
|
|
Actuarial losses ($27 million) partially offset by liabilities moved to contract liabilities ($15 million)
|
Deferred income tax liabilities
|
(11
|
)
|
|
Decrease in taxable temporary differences
|
Risk management liabilities (current and long term)
|
11
|
|
|
Market changes, contract settlements and unfavourable foreign exchange rates, partially offset by new contracts entered into during the period
|
Equity attributable to shareholders
|
(120
|
)
|
|
Net loss ($65 million) and other comprehensive loss ($60 million)
|
Non-controlling interests
|
3
|
|
|
Net earnings ($35 million) and changes in non-controlling interests in TransAlta Renewables from dividend reinvestment plan ($6 million), partially offset by distributions paid and payable ($39 million)
|
Others
|
1
|
|
|
|
Total decrease in liabilities and equity
|
(100
|
)
|
|
|
3 months ended March 31,
|
2019
|
|
2018
|
|
Increase/(decrease)
|
|
Primary factors explaining change
|
Cash and cash equivalents, beginning of period
|
89
|
|
314
|
|
(225
|
)
|
|
Provided by (used in):
|
|
|
|
|
|
|
|
Operating activities
|
82
|
|
425
|
|
(343
|
)
|
Lower cash flow from operations before changes in working capital ($140 million) mainly due to the 2018 one time receipt of $157 million for the termination of the Sundance Units B and C PPAs. There was also an unfavourable change in non-cash working capital ($203 million).
|
Investing activities
|
(53
|
)
|
(53
|
)
|
—
|
|
Higher note receivable related to Pioneer Pipeline project development costs ($50 million), higher additions to PP&E ($11 million) and lower receipts from finance leases ($9 million) were offset by the decrease in restricted cash related to the OCP debt ($35 million) and favourable change in non-cash investing working capital balances ($34 million)
|
Financing activities
|
(9
|
)
|
(357
|
)
|
348
|
|
Lower repayments of long-term debt ($631 million), lower dividends paid on preferred shares ($10 million) and lower distributions paid to subsidiaries' non-controlling interests ($9 million) partially offset by lower borrowings under credit facilities ($255 million) and lower realized gains on financial instruments ($50 million)
|
Translation of foreign currency cash
|
—
|
|
—
|
|
—
|
|
|
Cash and cash equivalents, end of period
|
109
|
|
329
|
|
(220
|
)
|
|
|
Total project
|
|
Remaining estimated spend in 2019
|
|
Target completion date
|
|
|
|||
|
Estimated
spend
|
|
Spent to
date
(1)
|
|
|
|
Details
|
|||
Project
|
|
|
|
|
|
|
|
|||
Big Level wind development project
(2)
|
227
|
|
116
|
|
|
111
|
|
Q3 2019
|
|
90 MW wind project with a 15-year PPA
|
Antrim wind development project
(3)
|
97
|
|
66
|
|
|
31
|
|
Q3 2019
|
|
29 MW wind project with two 20-year PPAs
|
Pioneer gas pipeline partnership
|
100
|
|
65
|
|
|
35
|
|
Q2 2019
|
|
50 per cent ownership in the 120 km natural gas pipeline to supply gas to Sundance and Keephills
|
Windrise wind development project
|
270
|
|
4
|
|
|
46
|
|
Q2 2021
|
|
207 MW wind project with a 20-year Renewable Electricity Support Agreement with AESO
|
Coal-to-gas conversions
(4)
|
200
|
|
—
|
|
|
35
|
|
2020 to 2022
|
|
Coal-to-gas conversions at Canadian Coal
|
Total
|
894
|
|
251
|
|
|
258
|
|
|
|
|
Category
|
Description
|
Spent to
date
(1)
|
|
Expected spend in 2019
|
|||
Routine capital
|
Capital required to maintain our existing generating capacity
|
12
|
|
50
|
|
—
|
60
|
Planned major maintenance
|
Regularly scheduled major maintenance
|
8
|
|
70
|
|
—
|
80
|
Mine capital
|
Capital related to mining equipment and land purchases
|
5
|
|
20
|
|
—
|
25
|
Total sustaining capital
(2)
|
25
|
|
140
|
|
—
|
165
|
|
Productivity capital
|
Projects to improve power production efficiency and corporate improvement initiatives
|
2
|
|
10
|
|
—
|
15
|
Total sustaining and productivity capital
|
27
|
|
150
|
|
—
|
180
|
▪
|
two outages for major maintenance at Keephills Unit 1 and Sundance Unit 4 within our Canadian Coal segment that were started in the first quarter of 2019 and will be completed in the second quarter of 2019;
|
▪
|
one major outage in our Canadian Gas segment related to our Sarnia facility during the second quarter of 2019;
|
▪
|
distributed planned maintenance expenditures across the entire Hydro fleet; and
|
▪
|
distributed expenditures across our Wind fleet, focusing on planned component replacements.
|
|
Canadian
Coal
|
Gas and
Renewables
|
Total
|
Lost to date
(1)
|
GWh lost
|
500 - 550
|
400 - 450
|
900 - 1,000
|
39
|
▪
|
Exemption to not recognize right of use assets and lease liabilities for short-term leases that have a remaining lease term of less than 12 months as at Jan. 1, 2019 and for low value leases;
|
▪
|
Excluding initial direct costs for the measurement of the right of use asset at the date of initial application;
|
▪
|
Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease;
|
▪
|
Adjusting the right of use assets by the amount of IAS 37 onerous contract provision immediately before the date of initial application; and
|
▪
|
Measuring the right of use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application.
|
|
Q2 2018
|
|
Q3 2018
|
|
Q4 2018
|
|
Q1 2019
|
|
|
|
|
|
|
||||
Revenues
|
446
|
|
593
|
|
622
|
|
648
|
|
Comparable EBITDA
(1)
|
248
|
|
250
|
|
261
|
|
221
|
|
FFO
|
188
|
|
204
|
|
217
|
|
169
|
|
Net earnings (loss) attributable to common shareholders
|
(105
|
)
|
(86
|
)
|
(122
|
)
|
(65
|
)
|
Net earnings (loss) per share attributable to common shareholders, basic and diluted
(2)
|
(0.36
|
)
|
(0.30
|
)
|
(0.43
|
)
|
(0.23
|
)
|
|
|
|
|
|
||||
|
Q2 2017
|
|
Q3 2017
|
|
Q4 2017
|
|
Q1 2018
|
|
|
|
|
|
|
||||
Revenues
|
503
|
|
588
|
|
638
|
|
588
|
|
Comparable EBITDA
(1)
|
243
|
|
233
|
|
275
|
|
393
|
|
FFO
|
187
|
|
196
|
|
219
|
|
318
|
|
Net earnings (loss) attributable to common shareholders
|
(18
|
)
|
(27
|
)
|
(145
|
)
|
65
|
|
Net earnings (loss) per share attributable to common shareholders, basic and diluted
(2)
|
(0.06
|
)
|
(0.09
|
)
|
(0.50
|
)
|
0.23
|
|
▪
|
effects of impairment charges during the second, third and fourth quarters of 2018 and second quarter of 2017;
|
▪
|
recognition of the $157 million early termination payment received regarding Sundance B and C PPAs during the first quarter of 2018;
|
▪
|
a recovery of a writedown of deferred tax assets in the second quarter of 2017 and a writedown in the first quarter of 2019;
|
▪
|
change in income tax rates in the US in the fourth quarter of 2017;
|
▪
|
effects of changes in useful lives of certain Canadian Coal assets during the second and third quarters of 2017; and
|
▪
|
effects of an impairment of $137 million in the fourth quarter of 2017 on intercompany financial instruments that is attributable only to the non-controlling interests.
|
|
|
|
March 31, 2019
|
|
Dec. 31, 2018
|
|
|
|
|
|
|
||
Closing market price (TSX) ($)
|
|
|
9.82
|
|
5.59
|
|
Price range for the last 12 months (TSX) ($)
|
High
|
|
10.04
|
|
7.90
|
|
|
Low
|
|
5.44
|
|
5.44
|
|
FFO before interest to adjusted interest coverage
(2)
(times)
|
|
|
5.1
|
|
4.8
|
|
Adjusted FFO to adjusted net debt
(2)
(%)
|
|
|
20.7
|
|
20.8
|
|
Adjusted net debt to comparable EBITDA
(1, 2)
(times)
|
|
|
3.7
|
|
3.7
|
|
Adjusted net debt to invested capital
(1)
(%)
|
|
|
50.8
|
|
49.7
|
|
Return on equity attributable to common shareholders
(2)
(%)
|
|
|
(25.0
|
)
|
(15.8
|
)
|
Return on capital employed
(2)
(%)
|
|
|
(1.9
|
)
|
0.7
|
|
Earnings coverage
(2)
(times)
|
|
|
(0.7
|
)
|
0.2
|
|
Dividend payout ratio based on FFO
(1, 2)
(%)
|
|
|
6.1
|
|
7.6
|
|
Dividend coverage
(2)
(times)
|
|
|
10.9
|
|
18.3
|
|
Dividend yield
(2)
(%)
|
|
|
1.6
|
|
2.9
|
|
1.
|
I have reviewed this annual report on Form 6-K of TransAlta Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ “Dawn L. Farrell”
|
Dated May 13, 2019
|
Dawn L. Farrell
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 6-K of TransAlta Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
|
|
/s/ “Christophe Dehout”
|
Dated May 13, 2019
|
Christophe Dehout
|
|
Chief Financial Officer
|
(a)
|
the accompanying Report of Foreign Private Issuer on Form 6-K of the Company (the “
Report
”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ “Dawn L. Farrell”
|
Dated May 13, 2019
|
Dawn L. Farrell
|
|
President and Chief Executive Officer
|
(i)
|
the accompanying Report of Foreign Private Issuer on Form 6-K of the Company (the “
Report
”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ “Christophe Dehout”
|
Dated May 13, 2019
|
Christophe Dehout
|
|
Chief Financial Officer
|