TransAlta announces seven percent increase in comparable earnings per share in 2011; files year end disclosure documents
- 2011 comparable earnings per share1 increased seven per cent to $1.04 versus $0.97 in 2010
- Funds From Operations1 of $809 million for the year
- Adjusted fleet availability of 88.2 per cent for the year
CALGARY, Alberta (Mar. 2, 2012) – TransAlta Corporation (“TransAlta”) (TSX: TA; NYSE: TAC) today reported 2011 comparable earnings1 of $230 million ($1.04 per share) versus $213 million ($0.97 per share) in 2010. Reported net earnings attributable to common shareholders for the year were $290 million ($1.31 per common share) compared to $255 million ($1.16 per common share) in 2010.
Improved comparable results were primarily driven by strong renewable resources throughout the year, the optimization of Centralia Thermal, the addition of Keephills 3 and increased Energy Trading gross margins. These results were partially offset by the unplanned outage at Genesee 3, increased operations maintenance and administration costs primarily due to higher trading compensation and productivity initiatives, and higher depreciation and interest expense primarily due to the commissioning of Keephills 3.
“We have improved our financial performance since 2009 by focusing on our base operations and adding quality generation assets in markets we know well,” said Dawn Farrell, TransAlta President and CEO. “In 2012 we expect to add an additional 129 megawatts of generation from coal uprates and additional wind capacity. We also continue to advance a number of plans for growth in our core markets.”
Reported net earnings attributable to common shareholders for the full year were higher primarily due to an increase in mark-to-market gains of $78 million on power hedges that no longer qualify for hedge accounting.
Funds from operations for the year were $809 million versus $805 million in 2010. Funds from operations were higher due to higher cash earnings. Cash flow from operations for the year was $694 million compared to $838 million in 2010 primarily due to timing of payments and cash receipts and higher inventory.
Adjusted fleet availability for the full year was 88.2 per cent, taking into account the decision to economically dispatch Centralia Thermal, compared to 88.9 per cent in 2010. Adjusted fleet availability decreased due primarily to the shutdown of Sundance Units 1 and 2 prior to declaring economic destruction and due to the unplanned outage at our Genesee 3 facility in the fourth quarter. Unadjusted fleet availability for the year was 85.4 per cent compared to 88.9 per cent in 2010.
In the fourth quarter of 2011, TransAlta reported comparable earnings of $29 million ($0.13 per share) compared to $80 million ($0.36 per share) in the fourth quarter of 2010. The decrease in comparable earnings was driven by lower Generation gross margins due primarily to higher penalties paid on Alberta Thermal outages under the applicable power purchase agreements, the unplanned outage at Genesee 3, and lower pricing in the Pacific Northwest. The fourth quarter of 2011 also had higher depreciation and interest expense primarily as a result of the commissioning of Keephills 3 and higher operations maintenance and administration costs due primarily to higher trading compensation and productivity initiatives. These results were partially offset through additional production from the commissioning of Keephills 3 and Energy Trading results.
Net earnings attributable to common shareholders for the fourth quarter of 2011 were $24 million ($0.11 per share). Fourth quarter 2011 net earnings were slightly lower than comparable earnings primarily due to booking an after-tax $13 million reserve on collateral on hand at MF Global Inc, partially offset by the sale of certain assets. With respect to MF Global Inc. the after-tax $13 million represents approximately 50 per cent of the total collateral on hand at MF Global Inc. In October 2011 MF Global Holding Ltd. filed for bankruptcy protection in the U.S. MF Global Holdings Ltd. is the parent company of MF Global Inc., which was used by TransAlta as a broker-dealer for certain commodity transactions. TransAlta continues to pursue recovery of these amounts but no assurance can be given as to the outcome.
Funds from operations in the fourth quarter of 2011 were $189 million, compared to $234 million earned in the same quarter in 2010. The decrease was driven by lower cash earnings in the quarter. Cash flow from operations for the fourth quarter of 2011 was $182 million compared to $317 million in 2010.
Fleet availability for the quarter was 90.3 per cent compared to 91.4 per cent in the fourth quarter of 2010. The decrease in availability is attributed to higher planned and unplanned outages at Alberta Thermal and the unplanned outage at Genesee 3. This was partially offset by lower planned outages at Genesee 3.
Premium DividendTM, Dividend Reinvestment and Optional Common Share Purchase Plan
On February 21, TransAlta announced that it has added a Premium DividendTM Component to its existing Dividend Reinvestment and Share Purchase Plan (the Prior Plan). The amended and restated plan is called the Premium DividendTM, Dividend Reinvestment and Optional Common Share Purchase Plan (the Plan).
The Plan provides eligible shareholders of TransAlta with two options, to reinvest dividends at a current three per cent discount towards the purchase of new shares of TransAlta or instead, to receive the equivalent to 102 per cent of the dividends payable in cash. Full details of the Plan are available on TransAlta’s website at transalta.com under the Investor Centre.
Eligible shareholders are not required to participate in the Plan. Those shareholders who have not elected or been deemed to have elected to participate in the Plan will continue to receive their quarterly cash dividends in the usual manner.
To participate in the Plan, eligible shareholders must be resident in Canada. Residents of the United States or an individual who is otherwise a “US Person” under applicable United States securities laws may not participate in the Plan. Shareholders who are resident in any jurisdiction outside of Canada (other than the United States) may participate in the Plan only if their participation is permitted by the laws of the jurisdiction in which they reside and provided that TransAlta is satisfied, in its sole discretion, that such laws do not subject the Plan, TransAlta, the Plan Agent or the Plan Broker to additional legal or regulatory requirements.
TransAlta files year end disclosure documents
TransAlta also announced today it has filed its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the Management’s Discussion and Analysis (MD&A). These documents are available through TransAlta’s website here or through Sedar at www.sedar.com.
TransAlta has also filed its 40-F with the U.S. Securities and Exchange Commission. The form is available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request.
All figures in millions unless otherwise stated.
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
|Availability Adjusted for Centralia (%)2||90.3||91.4||88.2||88.9|
|Net earnings applicable to common shares4||24||92||290||255|
|Basic & diluted earnings per common share4||0.11||0.42||1.31||1.16|
|Comparable earnings per share3||0.13||0.36||1.04||0.97|
|Comparable Earnings before interest, taxes, depreciation, and amortization (EBITDA)3||273||295||1,077||955|
|Funds from operations3||189||234||809||805|
|Cash flow from operations per share3||0.84||1.06||3.64||3.68|
|Cash flow from operations||182||317||694||838|
1Comparable earnings per share, funds from operations, and comparable earnings are not defined under International Financial Reporting Standards (“IFRS”). Presenting these measures from period to period helps management and shareholders evaluate earnings trends more readily in comparison with prior periods’ results. Refer to the Non-IFRS Measures section of the extended news release for further discussion of these items, including, where applicable, reconciliations to net earnings attributable to common shareholders and cash flow from operating activities.
2Availability and production includes all generating assets (generation operations, finance lease, and equity investments).
3Gross margin, operating income, comparable earnings comparable earnings per share, comparable EBITDA, funds from operations, and funds from operations per share are not defined under IFRS. Refer to the Non-IFRS financial measures section of the extended news release for an explanation and, where applicable, reconciliations to net earnings attributable to common shareholders and cash flow from operating activities.
42011 net earnings attributable to common shareholders and earnings per common share amounts include the impacts associated with the de-designation of certain ineffective hedges. 2010 year-to-date amounts include a one-time income tax recovery.
A complete copy of TransAlta’s fourth quarter extended news release is available on the Investors section of our website: transalta.com.
TransAlta will hold a conference call and web cast at 9 a.m. MT (11 a.m. ET) today to discuss results. The call will begin with a short address by Dawn Farrell, President and CEO, and Brett Gellner, Chief Financial Officer, followed by a question and answer period for investment analysts, investors, and other interested parties. A question and answer period for the media will immediately follow.
Please contact the conference operator five minutes prior to the call, noting “TransAlta Corporation” as the company and “Jess Nieukerk” as moderator.
For local Toronto participants – 1-416-340-2216
Toll-free North American participants – 1-866-226-1792
A link to the live webcast will be available via here. If you are unable to participate in the call, the instant replay is accessible at 1-800-408-3053 with TransAlta pass code 5257384. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available. Note: If using a hands-free phone, lift the handset and press one to ask a question.
Note: If using a hands-free phone, lift the handset and press one to ask a question.
TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate our geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. For 100 years, TransAlta has been a responsible operator and a proud contributor to the communities where we work and live. TransAlta is recognized for its leadership on sustainability by the Dow Jones Sustainability North America Index, the FTSE4Good Index and the Jantzi Social Index. TransAlta is Canada’s largest investor-owned renewable energy provider.
This news release may contain forward looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. These statements are based on TransAlta Corporation’s belief and assumptions based on information available at the time the assumption was made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions in geographic areas where TransAlta Corporation operates.
Note: All financial figures are in Canadian dollars unless noted otherwise.
For more information:
Phone: (403) 267-7287
Director, Investor Relations
Phone: 1 800-387-3598