CALGARY, Alberta (August 4, 2022)

Second Quarter 2022 Financial Highlights

  • Adjusted EBITDA(1),(2) of $126 million, an increase of 30% to the same period in 2021
  • Free cash flow (“FCF”)(1),(3) of $87 million, an increase of 23% to the same period in 2021
  • Cash available for distribution (“CAFD”)(1) of $49 million or $0.18 per share, an increase of 23% or $0.03 per share compared to the same period in 2021
  • Earnings before income taxes of $18 million, a decrease of 36% to the same period in 2021
  • Cash flow from operating activities of $28 million, a decrease of 65% to the same period in 2021

 

Other Business Highlights & Updates

  • Amended and extended the power purchase agreements with New Brunswick Power at the Kent Hills wind facilities for an additional 10-year period through to December 2045, secured an acceptable waiver of the events of default and commenced rehabilitation work which is targeted to be completed by mid-2023
  • Executed contract extensions with three industrial customers at the Sarnia cogeneration facility that provide for the supply of electricity and/or steam and extend the terms of the original agreements from Dec. 31, 2022 to at least April 30, 2031
  • Reached agreement with BHP Nickel West (“BHP”) to expand the Mount Keith transmission system to support the Northern Goldfields-based operations of BHP. Total construction capital of the project is estimated at AU$50 – $53 million and will generate annual EBITDA of AU$6 – $7 million once completed in the second half of 2023

 

TransAlta Renewables Inc. (“TransAlta Renewables” or the “Company”) (TSX: RNW) announced today financial results for the three and six months ended June 30, 2022.

 

“Our strong second quarter’s results reflect the additions of the Windrise and North Carolina Solar facilities. These investments are great additions to our portfolio and have increased our diversification and contracted cash flow,” said Todd Stack, President.  “In addition, we are continuing to advance our contracting efforts and we were pleased to announce the contract extensions at the Sarnia cogeneration facility with three of our industrial customers.  We are targeting to finalize the contracting of Sarnia by the end of the third quarter,” added Mr. Todd Stack, President.

 

Second Quarter 2022 Highlights

$ millions, unless otherwise stated

3 months ended

6 months ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Renewable energy production (GWh)(2)

                   1,231 

                1,051 

                  2,541 

                2,160 

Revenues

                      139 

                    92

                     282 

                   218

Adjusted EBITDA(1)

                      126 

                     97

                     265 

                  220

Earnings before income taxes

                         18 

                    28

                        67 

                    89

Net earnings attributable to common shareholders

                         13 

                    25

                        54 

                     77

Cash flow from operating activities

                        28 

                     79

                       131 

                   182

Free cash flow(1)(3)

                        87 

                     71

                      195 

                   170

Cash available for distribution(1)

                        49 

                    40

                      139 

                   130

Net earnings per share attributable to common shareholders, basic and diluted

                    0.05 

                 0.09

                    0.20 

                 0.29

Free cash flow per share(1)(3)(4)

                    0.33 

                  0.27

                    0.73 

                 0.64 

Cash available for distribution per share(1)(5)

                     0.18 

                  0.15 

                    0.52 

                 0.49

Dividends declared and paid per common share

                    0.23 

                 0.23

                    0.47 

                 0.47

 

Second Quarter 2022 Results Summary

The Company’s renewable power production for the three and six months ended June 30, 2022 increased by 180 GWh and 381 GWh respectively compared to the same periods in 2021. The increase was mainly due to the production from the recently commissioned Windrise wind facility in Canadian Wind, the acquisition of the economic interests in the North Carolina Solar facility within the US Wind segment, higher wind resources in Canada and in the US, partially offset by the extended facility outage at the Kent Hills 1 and 2 wind facilities. 

 

Revenue for the three and six months ended June 30, 2022 increased by $47 million and $64 million respectively compared to the same periods in 2021. The increase in revenues was due to higher wind resources in Canada, incremental production from the Windrise wind facility, higher environmental credit sales partially offset by the extended site outage at the Kent Hills 1 and 2 wind facilities. In addition, during the second quarter of 2021, the Company experienced unplanned steam supply outages and steam reconciliation adjustments that did not reoccur within the current period.

 

Adjusted EBITDA for the three and six months ended June 30, 2022 increased by $29 million and $45 million respectively compared to the same periods in 2021. The increase in adjusted EBITDA was a result of higher renewable energy production, an increase in environmental credit sales, the commencement of a new PPA within the Australian Gas segment and recognition of liquidated damages related to Windrise turbine availability. In addition, the prior year included the impact of liquidated damages recognized for steam supply outages within the Canadian Gas segment.

 

Net earnings attributable to common shareholder for the three and six months ended June 30, 2022, decreased by  $12 million and $23 million, respectively, compared to the same period in 2021 due to lower finance income related to subsidiaries of TransAlta, higher asset impairments, higher interest and depreciation costs associated with the commissioning and financing of the Windrise wind facility, higher income tax expense and lower foreign exchange gains. This was partially offset by higher revenues, the receipt of insurance proceeds for the replacement costs for the singular collapsed tower at the Kent Hills site, and recording liquidated damages related to turbine availability on the Windrise wind facility. Finance income related to subsidiaries of TransAlta was lower as greater distributions were classified as return of capital.

 

Cash flow from operating activities for the three and six months ended June 30, 2022 decreased by $51 million for both periods compared to the same periods in 2021, primarily due to the extended facility outage at the Kent Hills 1 and 2 wind facilities, the settlement of the liquidated damages at Sarnia partly offset by lower finance income related to subsidiaries of TransAlta, an increase in wind resources in Canada, the incremental production from the Windrise wind facility and higher environmental sales.

 

FCF for the three and six months ended June 30, 2022 increased by $16 million and $25 million respectively compared to the same periods in 2021, due to higher adjusted EBITDA, lower current tax expense, partially offset by the settlement of the Sarnia contract liquidated damages provision. In addition, during the three months ended, June 30, 2022 there were lower sustaining capital expenditures in the Australian Gas segment. While, in the six months ended, June 30, 2022, FCF was further offset by an increase in sustaining capital expenditures relating to higher major component replacements in the Canadian Wind segment.

 

CAFD for the three and six months ended June 30, 2022 has increased $9 million for both periods compared to the same periods in 2021, due to higher FCF, partially offset by the commencement of principal repayments on the South Hedland debt and higher tax equity distributions with the acquisition of the North Carolina Solar facility.

 

Significant Events and Other Updates

Kent Hills Wind Facility Outage Update

On June 2, 2022, the Company announced its rehabilitation plan for the Kent Hills wind facilities together with the execution of amended and extended contracts with NB Power in respect of each of the Kent Hills 1, 2 and 3 facilities for an additional 10-year period and an effective 10 per cent reduction to the original contract prices, commencing January 2023 through December 2033. In addition, both parties have agreed to work in good faith to evaluate the installation of a battery energy storage system at Kent Hills and to consider a potential repowering of Kent Hills at the end of life in 2045. The Company also received a waiver from project bond holders and entered into a supplemental indenture with bond holders.  

 

Mount Keith 132kV Transmission Expansion

On May 3, 2022, the Company exercised its option to acquire an economic interest in the expansion of the Mt. Keith 132kV transmission system in Western Australia, to support the Northern Goldfields-based operations of BHP Nickel West (“BHP”). Total construction capital is estimated between AU$50 million and AU$53 million. Southern Cross Energy, a subsidiary of TransAlta Corporation, has entered into an engineering, procurement and construction agreement with ASX-listed GenusPlus Group Ltd for the expansion. The project is being developed under the existing PPA with BHP, which has a term of 15 years. It is expected to be completed in the second half of 2023 and will generate annual EBITDA in the range of AU$6 million and AU$7 million. The project will facilitate the connection of additional generating capacity to our network to support BHP’s operations and increase their competitiveness as a supplier of low-carbon nickel.

 

Sarnia Cogeneration Facility Contract Extensions

During the second quarter of 2022, the Company executed contract extensions for the supply of electricity and/or steam with three of its industrial customers at the Sarnia cogeneration facility. These agreements will extend the delivery terms of electricity and/or steam from Dec. 31, 2022 to April 30, 2031 in one case and to Dec. 31, 2032 for the other two, with all agreements being subject to certain conditions, including the Company entering into a new contract with the Ontario Independent Electricity System Operator (the “IESO”). The current contract with the IESO, in respect of the Sarnia cogeneration facility, expires on Dec. 31, 2025.  On July 19, 2021, the IESO released its Annual Acquisition Report, which included draft details for medium- and long-term procurement mechanisms for capacity for 2026 and beyond for existing and new generation.  The Company bid into the procurement process developed by the IESO and is seeking to secure a contract extension for the Sarnia cogeneration facility following the end of the current contract term. The Company expects the IESO to announce the successful bids in the third quarter of 2022.

 

Liquidity and Financial Position

The Company remains highly diversified with facilities that are highly contracted and located in core geographies. Cash flows from the underlying asset portfolio are also supported by the financial strength of customers. The Company continues to maintain a strong financial position and currently has access to over $0.8 billion in liquidity including $218 million of cash.

 

The Company reaffirms its 2022 financial outlook, which included adjusted EBITDA between $485 million to $525 million and cash available for distribution between $245 million to $285 million.

 

Notes

(1) These items are not defined and have no standardized meaning under IFRS. Please refer to Reconciliation of Non-IFRS Measures section of this earnings release for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.

(2) Includes production from Canadian Wind, Canadian Hydro and US Wind and Solar and excludes Canadian, US and Australian gas-fired generation. Production is not a key revenue driver for gas-fired facilities as most of their revenues are capacity-based.

(3) In the fourth quarter of 2021, the adjusted funds from operations was replaced with free cash flow to better reflect the proxy for cash generated from operating activities and the composition of the metric has been changed accordingly. Comparative figures have been reclassified to conform to the current period’s presentation.

(4) Free cash flow (“FCF”) per share is calculated as free cash flow divided by the weighted average number of common shares outstanding during the period of 267 million shares as at June 30, 2022 (June 30, 2021 – 267 million shares).

(5) Cash available for distribution (“CAFD”) per share is calculated as CAFD divided by the weighted average number of common shares outstanding during the period of 267 million shares as at June 30, 2022 (June 30, 2021 – 267 million shares).

 

Non-IFRS Measures

We evaluate our performance using a variety of measures to provide management and investors with an understanding of our financial position and results. Certain of the measures discussed in this MD&A are not defined under IFRS and, therefore, should not be considered in isolation, or as a substitute for, or as an alternative to, or to be more meaningful than measures as determined in accordance with IFRS when assessing our financial performance or liquidity. These measures have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers.

 

The Company’s key non-IFRS measures are adjusted EBITDA, FCF and CAFD. In the fourth quarter of 2021, comparable EBITDA was relabelled as adjusted EBITDA to align with industry standard terminology. The Adjusted Funds from Operations (“AFFO”) was replaced with FCF to better reflect the proxy for cash generated from operating activities. The composition of the metric has been changed accordingly. Notably, tax equity distributions have been removed from the composition of AFFO in the determination of FCF and it has been included in CAFD, as it reflects a settlement of a financial liability. Comparative figures have been reclassified to conform to the current period’s presentation.

 

Adjusted EBITDA

Adjusted EBITDA is an important metric for management since it represents our core business profitability. Interest, taxes, depreciation and amortization are not included, as differences in accounting treatments may distort our core business results. We present adjusted EBITDA along with operational information of the assets in which we own an economic interest so that readers can better understand and evaluate the drivers of those assets in which we have an economic interest. Since the economic interests are designed to provide the Company with returns as if we owned the assets themselves, presenting the operational information and adjusted EBITDA provides a more complete picture for readers to understand the underlying nature of the investments and the resultant cash flows that would otherwise only be presented as finance income from the investments.

 

Adjusted EBITDA is comprised of our reported EBITDA adjusted to exclude the impact of unrealized mark-to-market gains and losses, asset impairments and insurance recoveries, plus the adjusted EBITDA of the facilities in which we hold an economic interest, which is the facilities’ reported EBITDA adjusted for: 1) finance lease income and the change in the finance lease receivable amount; 2) contractually fixed management costs; 3) interest earned on the prepayment of certain transmission costs; 4) the impact of unrealized mark-to-market gains or losses; and 5) asset impairments.

 

Free Cash Flow

FCF represents the amount of cash that is available from operations and investments in subsidiaries of TransAlta in which we have an economic interest, to invest in growth initiatives, to make scheduled principal repayments on debt, to repay maturing debt, to pay common share dividends or to repurchase common shares. Changes in working capital are excluded so that FCF is not distorted by changes that we consider temporary in nature, reflecting, among other things, the impact of seasonal factors and the timing of receipts and payments.

 

FCF is calculated as the cash flow from operating activities before changes in working capital, less sustaining capital expenditures, distributions paid to subsidiaries’ non-controlling interest, finance income from economic interests and principal repayments on lease obligations, plus FCF of the assets owned through economic interests, which is calculated as adjusted EBITDA from the economic interests less interest expense, sustaining capital expenditures, current income tax expense, insurance recovery and working capital and other timing. FCF per share is calculated using the weighted average number of common shares outstanding during the period.

 

Cash Available for Distribution

CAFD can be used as a proxy for the cash that will be available to common shareholders of the Company. CAFD is calculated as FCF less tax equity distributions and scheduled principal repayments of amortizing debt.

 

One of the primary objectives of the Company is to provide reliable and stable cash flows and presenting FCF and CAFD assists readers in assessing our cash flows in comparison to prior periods. See the Reconciliation of Non-IFRS Measures section of this earnings release for additional information.

 

Reconciliation of these non-IFRS financial measures to the most comparable IFRS measure are provided below.

 

 

Reconciliation of Non-IFRS Measures

Since the economic interests are designed to provide the Company with returns as if we owned the assets ourselves, presenting the operating information and adjusted EBITDA provides a more complete picture to understand the underlying nature of the investments and the resultant cash flows that would otherwise only be presented as finance income from investments.

 

The following tables reflect adjusted EBITDA and provides reconciliation to earnings before income taxes for the three and six months ended June 30, 2022 and June 30, 2021:

 

 

Owned Assets

Economic Interests

 

 

 

3 months ended

June 30, 2022

$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Investments in economic interests and adjustments

IFRS financials

Revenues(1)

 57

 10

    73 

— 

  31

  7 

 42

220

 (81)

139 

Fuel, royalties and other costs(2)

5

 1

   44 

— 

 — 

 4 

 1

55

 (5)

50 

Gross margin

52 

29 

— 

31 

41 

165 

(76)

89 

Operations, maintenance, and administration(3)

10

2

5

1

7

38

(12)

26 

Taxes, other than income taxes

 2

— 

— 

— 

2

— 

4

(2)

Net other operating income

(3)

— 

— 

— 

— 

— 

(3)

(7)

(10)

Adjusted EBITDA(4)

43 

20 

(5)

25 

34 

126 

(55)

71 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

(36)

Asset impairment charge

 

 

 

 

 

 

 

 

 

(11)

Finance income related to subsidiaries of TransAlta

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

(12)

Foreign exchange gain

 

 

 

 

 

 

 

 

 

Earnings before income tax

 

 

 

 

 

 

 

 

 

18 

(1) Adjusted EBITDA excludes the impact of unrealized mark-to market gains or losses. Amounts related to economic interests include finance lease income adjusted for change in finance lease receivable.

(2) Amounts related to economic interests include interest earned on the prepayment of certain transmission costs.

(3) Amounts related to economic interests include the effect of contractually fixed management costs.

(4) Adjusted EBITDA is a non-IFRS measure and has no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

 

 

 

Owned Assets

Economic Interests

 

 

 

3 months ended

June 30, 2021

$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Investments in economic Interests and adjustments

IFRS Financials

Revenues(1)

47

 11

33

28

10

41

170

(78)

92

Fuel, royalties and other costs(2)

2

2

21

4

2

31

(6)

25

Gross margin

45

9

12

28

6

39

139

(72)

67

Operations, maintenance, and administration(3)

9

 1

 8

5

5

2

8

38

(15)

23

Taxes, other than  income taxes

1

1

 1

1

 —

4

(1)

3

Adjusted EBITDA(4)

35

7

3

(5)

22

4

31

97

(56)

41

Depreciation and amortization

 

 

 

 

 

 

 

 

 

(33)

Finance income related to subsidiaries of TransAlta

 

 

 

 

 

 

 

 

 

20

Interest income

 

 

 

 

 

 

 

 

 

2

Interest expense

 

 

 

 

 

 

 

 

 

(9)

Foreign exchange gain

 

 

 

 

 

 

 

 

 

7

Earnings before income tax

 

 

 

 

 

 

 

 

 

28

(1) Adjusted EBITDA excludes the impact of unrealized mark-to-market gains or losses. Amounts related to economic interests include finance lease income adjusted for change in finance lease receivable.

(2) Amounts related to economic interests include interest earned on the prepayment of certain transmission costs.

(3) Amounts related to economic interests include the effect of contractually fixed management costs.

(4) Adjusted EBITDA is a non-IFRS measure and has no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

 

 

Owned Assets

Economic Interests

 

 

 

6 months ended

June 30, 2022

$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Investments in economic interests and adjustments

IFRS Financials

Revenues(1)

127

14

142

— 

62

13

85

443

(161)

282 

Fuel, royalties and other costs(2)

9

2

84

— 

1

106

(11)

95 

Gross margin

118 

12 

58 

— 

61 

82 

337 

(150)

187 

Operations, maintenance, and administration(3)

19

 17

11

8

2

14

75

(24)

51 

Taxes, other than income taxes

3

— 

1

— 

— 

— 

7

(3)

Net other operating income

(10)

— 

— 

— 

— 

— 

— 

(10)

(7)

(17)               

Adjusted EBITDA(4)

106 

40 

(11)

50 

68 

265 

(116)

149 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

(73)

Asset impairment charge

 

 

 

 

 

 

 

 

 

(11)

Finance income related to subsidiaries of TransAlta

 

 

 

 

 

 

 

 

 

22 

Interest income

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

(25)

Foreign exchange gain

 

 

 

 

 

 

 

 

 

Earnings before income tax

 

 

 

 

 

 

 

 

 

67 

(1) Adjusted EBITDA excludes the impact of unrealized mark-to market gains or losses. Amounts related to economic interests include finance lease income adjusted for change in finance lease receivable.

(2) Amounts related to economic interests include interest earned on the prepayment of certain transmission costs.

(3) Amounts related to economic interests include the effect of contractually fixed management costs.

(4) Adjusted EBITDA is a non-IFRS measure and has no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

 

 

 

Owned Assets

Economic Interests

 

 

 

6 months ended
June 30, 2021

$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Investments in economic interests and adjustments

IFRS Financials

Revenues(1)

117

14

87

50

10

84

362

(144)

218

Fuel, royalties and other costs(2)

4

2

47

 —

1

4

3

61

(8)

53

Gross margin

113

12

40

49

6

81

301

(136)

165

Operations, maintenance, and administration(3)

18

3

15

11

7

2

18

74

(27)

47

Taxes, other than income taxes

3

 1

1

2

7

(2)

5

Adjusted EBITDA(4)

92

8

24

(11)

40

4

63

220

(107)

113

Depreciation and amortization

 

 

 

 

 

 

 

 

 

(67)

Finance income related to subsidiaries of TransAlta

 

 

 

 

 

 

 

 

 

49

Interest income

 

 

 

 

 

 

 

 

 

4

Interest expense

 

 

 

 

 

 

 

 

 

(19)

Foreign exchange gain

 

 

 

 

 

 

 

 

 

9

Earnings before income tax

 

 

 

 

 

 

 

 

 

89

(1) Adjusted EBITDA excludes the impact of unrealized mark-to market gains or losses. Amounts related to economic interests include finance lease income adjusted for change in finance lease receivable.

(2) Amounts related to economic interests include interest earned on the prepayment of certain transmission costs.

(3) Amounts related to economic interests include the effect of contractually fixed management costs.

(4) Adjusted EBITDA is a non-IFRS measure and has no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

 

 

Reconciliation of Reported Cash Flow from Operating Activities to FCF and CAFD

 

3 months ended

6 months ended

$ millions

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Cash flow from operating activities

                          28 

                     79

                        131 

                   182

Change in non-cash operating working capital balances

                          19 

                    (19)

                            2 

                    (34)

Cash flow from operations before changes in working capital

                          47 

                     60

                        133 

                   148

Adjustments:

 

 

 

 

Sustaining capital expenditures – owned assets

                           (5)

                      (4)

                           (9)

                      (5)

Distributions paid to subsidiaries’ non-controlling interest

                           — 

                      (2)

                           — 

                      (2)

Finance income – economic interests(1)

                           (3)

                    (20)

                        (22)

                    (49)

   Principal repayments of lease obligations

                           (1)

                      (1)

                           (1)

                      (1)

FCF – economic interest(1)

                          49 

                     38

                          94 

                     79

FCF(2, 3)

                          87 

                      71

                        195 

                    170

Deduct:

 

 

 

 

Tax equity distributions

                           (9)

                      (8)

                         (19)

                    (14)

Principal repayments of amortizing debt

                        (29)

                    (23)

                        (37)

                    (26)

CAFD(2)

                          49 

                     40

                        139 

                   130

Weighted average number of common shares outstanding in the period (millions)

                       267 

                   267

                       267 

                   267

FCF per share(2)

                      0.33 

                  0.27

                      0.73 

                  0.64

CAFD per share(2)

                      0.18 

                   0.15

                      0.52 

                  0.49

(1) Refer to the Reconciliation of FCF to Finance Income Related to Subsidiaries of TransAlta below in this earnings release.

(2) These items are non-IFRS measures and have no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

(3) In the fourth quarter of 2021, the adjusted funds from operations was replaced with free cash flow  to better reflect the proxy for cash generated from operating activities and the composition of the metric has been changed accordingly. Comparative figures have been reclassified to conform to the current period’s presentation. Please refer to the Non-IFRS Measures section of this earnings release for discussion on the composition of free cash flow.

 

Reconciliation of FCF to Finance Income Related to Subsidiaries of TransAlta

The following table is a reconciliation of the finance income recognized on those assets we hold an economic interest in.

 

3 months ended

6 months ended

$ millions

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Finance income related to subsidiaries of TransAlta

                            3 

                     20

                          22 

                         49 

Tax equity distributions

                            9 

                       8

                          19

                          14 

Principal repayments of amortizing debt

                            5 

                     —

                          10 

                           — 

Return of capital and redemptions

                          22 

                       6

                         40 

                          14 

Effects of changes in working capital and other timing

                          10 

                      4

                            3 

                            2 

FCF(1)

                         49 

                     38

                         94 

                          79 

(1) This item is a non-IFRS measure and has no standardized meaning under IFRS. Refer to the Additional IFRS Measures and Non-IFRS Measures sections for further details.

 

Reconciliation of adjusted EBITDA to FCF and CAFD

 

 

Owned Assets

Economic Interests

 

Three months ended June 30, 2022

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

                   43 

                       7 

                   20 

                    (5)

                   25 

                      2 

                   34 

                            126 

Provisions and contract liabilities

                     — 

                     — 

                  (12)

                     — 

                     — 

                     — 

                     — 

                             (12)

Interest expense

                     — 

                     — 

                     — 

                  (10)

                     (1)

                     — 

                    (6)

                             (17)

Current income tax expense

                     (1)

                     — 

                     — 

                     — 

                     (1)

                     — 

                    (5)

                               (7)

Realized foreign exchange gain

                     — 

                     — 

                     — 

                       1 

                     — 

                     — 

                     — 

                                  1 

Sustaining capital expenditures

                    (3)

                     — 

                     (2)

                     — 

                     (1)

                     — 

                     — 

                               (6)

Interest income

                     — 

                     — 

                     — 

                       1 

                     — 

                     — 

                      2 

                                 3 

Principal repayments lease

  obligations

                     (1)

                     — 

                     — 

                     — 

                     — 

                     — 

                     — 

                                (1)

FCF(2)

                   38 

                       7 

                      6 

                  (13)

                    22 

                      2 

                   25 

                              87 

Deduct:

 

 

 

 

 

 

 

 

Tax equity distributions

                     — 

                     — 

                     — 

                     — 

                    (9)

                     — 

                     — 

                               (9)

Principal repayments of amortizing debt

                 (24)

                     — 

                     — 

                     — 

                     — 

                     — 

                    (5)

                            (29)

CAFD(2)

                    14 

                       7 

                      6 

                  (13)

                    13 

                      2 

                   20 

                              49 

(1) Adjusted EBITDA is defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to earnings before income taxes above.

(2) FCF and CAFD are defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to cash flow from operating activities above.

 

 

 

Owned Assets

Economic Interests

 

3 months ended June 30, 2021

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

               35

                 7

                 3

                (5)

               22

                 4

               31

                       97

Provisions

                —

                —

                12

                —

                —

                —

                —

                       12

Interest expense

                —

                —

                —

                (8)

                (1)

                —

                (6)

                      (15)

Current income tax expense

                —

                —

                —

                (7)

                (1)

                —

                (5)

                      (13)

Realized foreign exchange loss

                —

                —

                —

                  1

                —

                —

                —

                          1

Sustaining capital expenditures

                (2)

                (1)

                (1)

                —

                (1)

                (1)

                (4)

                      (10)

Distributions paid to subsidiaries’ non-controlling interest

                (2)

                —

                —

                —

                —

                —

                —

                        (2)

Currency adjustment and interest income

                  1

                —

                —

                  1

                —

                —

                —

                         2

Principal repayments lease

obligations

                (1)

                —

                —

                —

                —

                —

                —

                        (1)

FCF

               31

                 6

               14

              (18)

                19

                 3

                16

                        71

Deduct:

 

 

 

 

 

 

 

 

Tax equity distributions

                —

                —

                —

                —

                (8)

                —

                —

                        (8)

Principal repayments of amortizing debt

              (23)

                —

                —

                —

                —

                —

                —

                      (23)

CAFD

                 8

                 6

               14

              (18)

                11

                 3

                16

                       40

(1) Adjusted EBITDA is defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to earnings before income taxes above.

(2) FCF and CAFD are defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to cash flow from operating activities above.

 

 

Owned Assets

Economic Interests

 

6 months ended June 30, 2022

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

                 106 

                      8 

                   40 

                   (11)

                   50 

                      4 

                   68 

                           265 

Provisions and contract liabilities

                     (1)

                     — 

                  (12)

                     — 

                     — 

                     — 

                     — 

                             (13)

Interest expense

                     — 

                     — 

                     — 

                  (21)

                     (1)

                     — 

                  (12)

                            (34)

Current income tax expense

                     (1)

                     — 

                     — 

                     — 

                     (2)

                     — 

                  (10)

                             (13)

Realized foreign exchange gain

                     — 

                     — 

                     — 

                       1 

                     — 

                     — 

                     — 

                                  1 

Sustaining capital expenditures

                    (6)

                     — 

                    (3)

                     — 

                     (2)

                     — 

                    (3)

                             (14)

Interest income

                     — 

                     — 

                     — 

                      2 

                     — 

                     — 

                      2 

                                 4 

Principal repayments lease

 obligations

                     (1)

                     — 

                     — 

                     — 

                     — 

                     — 

                     — 

                                (1)

FCF(2)

                    97 

                      8 

                   25 

                 (29)

                   45 

                      4 

                   45 

                            195 

Deduct:

 

 

 

 

 

 

 

 

Tax equity distributions

                     — 

                     — 

                     — 

                     — 

                  (19)

                     — 

                     — 

                             (19)

Principal repayments of amortizing debt

                  (27)

                     — 

                     — 

                     — 

                     — 

                     — 

                  (10)

                            (37)

CAFD(2)

                   70 

                      8 

                   25 

                 (29)

                   26 

                      4 

                   35 

                           139 

(1) Adjusted EBITDA is defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to earnings before income taxes above.

(2) FCF and CAFD are defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to cash flow from operating activities above.

 

 

 

Owned Assets

Economic Interests

 

6 months ended June 30, 2021

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

              92

                8

              24

                (11)

              40

                4

                  63

                220

Provisions

               (6)

               —

               12

                 —

               —

               —

                   —

                     6

Interest expense

               —

               —

               —

                (17)

                (1)

               —

                 (12)

                 (30)

Current income tax expense

               —

               —

               —

                 (8)

                (1)

               —

                   (9)

                  (18)

Realized foreign exchange loss

               —

               —

               —

                   1

               —

               —

                   —

                     1

Sustaining capital expenditures

               (3)

                (1)

                (1)

                 —

                (1)

                (1)

                   (4)

                  (11)

Distributions paid to subsidiaries’

  non-controlling interest

               (2)

               —

               —

                 —

               —

               —

                   —

                   (2)

Currency adjustment and interest

  income

                2

               —

               —

                   2

               —

               —

                     1

                     5

Principal repayments lease

  obligations

                (1)

               —

               —

                 —

               —

               —

                   —

                    (1)

FCF(2)

              82

                 7

              35

               (33)

              37

                3

                  39

                 170

Deduct:

 

 

 

 

 

 

 

 

Tax equity distributions

               —

               —

               —

                 —

             (14)

               —

                   —

                  (14)

Principal repayments of amortizing debt

             (26)

               —

               —

                 —

               —

               —

                   —

                 (26)

CAFD(2)

              56

                 7

              35

               (33)

              23

                3

                  39

                 130

(1) Adjusted EBITDA is defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to earnings before income taxes above.

(2) FCF and CAFD are defined in the Additional IFRS Measures and Non-IFRS Measures section and reconciled to cash flow from operating activities above.

 

 

A complete copy of TransAlta Renewables’ second quarter MD&A and unaudited financial statements are available through TransAlta Renewables’ website at www.transaltarenewables.com or at SEDAR at www.sedar.com.

 

About TransAlta Renewables Inc.

TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 26 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities, two solar facilities, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,968 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania,  New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, Washington, North Carolina, and the State of Western Australia.

 

Cautionary Statement Regarding Forward Looking Information

This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, pertaining to, without limitation, the following: our strategy and growth plans; ability to provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets; securing contract extensions with the IESO and the satisfaction of conditions to the Sarnia cogeneration facility capacity supply commitments with the large industrial customers; the expansion of the Mount Keith transmission system, including the total construction capital of the Mount Keith transmission project, the timing of commercial operation and the expected annual EBITDA to be generated from the project; the remediation of the Kent Hills wind facilities, including the cost and timing of rehabilitation and the potential installation of a battery energy storage and repowering of Kent Hills wind facilities at the end of life in 2045; and the liquidated damages related to the Windrise turbine availability.  The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Corporation’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: impacts of COVID-19 not becoming significantly more onerous; foreign exchange rates; the availability and cost of labour, services and infrastructure; and the satisfaction by third parties of their obligations, including under power purchase agreements. The forward-looking statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to: competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; continued access to debt, tax equity, and capital markets; changes in tax, environmental, and other laws and regulations; adverse weather impacts; adverse commercial impacts at the Sarnia cogeneration facility; disruptions to the Company’s supply chain; inability to secure all required approvals and consents for the Mount Keith expansion project; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2021. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’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. The Company 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 noted otherwise.

 For more information:

Investor Inquiries:

Media Inquiries:

Phone: 1-800-387-3598 in Canada and U.S.

Phone: Toll-free media number: 1-855-255-9184

Email: investor_relations@transalta.com

Email: ta_media_relations@transalta.com

Our Investor Relations team is here to answer any questions you have about investing in our company.