CALGARY, AB, Nov. 4, 2022 /CNW/ -

Third Quarter 2022 Financial Highlights
  • Adjusted EBITDA(1) of $88 million, compared to $102 million in the same period in 2021
  • Free cash flow ("FCF")(1),(3) of $58 million, compared to $64 million in the same period in 2021
  • Cash available for distribution ("CAFD")(1) of $46 million or $0.17 per share, compared to $54 million or $0.20 per share in the same period in 2021
  • Loss before income taxes of $26 million, compared to earnings before income taxes of $21 million in the same period in 2021
  • Cash flow from operating activities of $37 million, compared to $83 million in the same period in 2021
Other Business Highlights & Updates
  • Executed contract renewals for the Sarnia cogeneration and Melancthon 1 wind facilities with the Ontario Independent Electricity System Operator ("IESO")

TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX: RNW) announced today financial results for the three and nine months ended Sept. 30, 2022.

"We were pleased to announce the new IESO capacity contracts at Sarnia cogeneration facility and Melancthon wind facility. This extends the life of the Sarnia cogeneration facility and helps to maintain our overall weighted average contract length," said Todd Stack, President. "Our third quarter's results were impacted year over year by the temporary outage at Kent Hills, lower than expected wind resource and the timing of renewable energy credit sales. Based on our year to date results, we expect our full year CAFD to track towards the lower end of our 2022 guidance range," added Mr. Stack.

Third Quarter 2022 Highlights

$ millions, unless otherwise stated

3 months ended

9 months ended

Sept. 30, 2022

Sept. 30, 2021

Sept. 30, 2022

Sept. 30, 2021

Renewable energy production (GWh)(2)

853

854

3,394

3,013

Revenues

124

114

406

332

Adjusted EBITDA(1)

88

102

353

322

Earnings (loss) before income taxes

(26)

21

41

110

Net earnings (loss) attributable to common
shareholders

(20)

20

34

97

Cash flow from operating activities

37

83

168

265

Free cash flow(1)(3)

58

64

253

234

Cash available for distribution(1)

46

54

185

184

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

(0.07)

0.07

0.13

0.36

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

0.22

0.24

0.95

0.88

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

0.17

0.20

0.69

0.69

Dividends declared and paid per common
share

0.23

0.23

0.70

0.70

 
Third Quarter 2022 Results Summary

The Company's renewable power production for the three months ended Sept. 30, 2022 was consistent with the same period in 2021. Increased production from the addition of the Windrise wind facility commissioned in the fourth quarter of 2021 in the Canadian Wind segment, the acquisition of the North Carolina Solar facility acquired as an Economic Investment  in the fourth quarter of 2021 in the US Wind segment, and higher water resources in Western Canada were offset by the extended outage at the Kent Hills 1 and 2 wind facilities and lower wind resources in Alberta. Renewable energy production for the nine months ended Sept. 30, 2022, increased by 381 GWh, compared to the same period in 2021. The increase was mainly due to the additions of the Windrise wind facility and the North Carolina Solar facility, higher water resources in Western Canada, higher wind resources in Canada and in the US, partially offset by the extended outage at the Kent Hills 1 and 2 wind facilities. 

Revenue for the three months ended Sept. 30, 2022 increased by $10 million compared to the same period in 2021 due to to increases in steam revenue, an increase in merchant power prices in Ontario and incremental production from the recent commissioning of the Windrise wind facility. This is partially offset by the extended outage at the Kent Hills 1 and 2 wind facilities, lower wind resources and lower environmental credit sales. Revenue for the nine months ended Sept. 30, 2022 increased by $74 million compared to the same period in 2021, due to  increases in steam revenue, higher wind and water resources in Canada, incremental production from the Windrise wind facility, and higher environmental credit sales, partially offset by the extended outage at the Kent Hills 1 and 2 wind facilities. In addition, during the second quarter of 2021, the Company experienced unfavourable adjustments for unplanned steam supply outages and steam reconciliation adjustments that did not reoccur within the current period.

Adjusted EBITDA for the three months ended Sept. 30, 2022 decreased by $14 million, compared to the same period in 2021. The decrease in adjusted EBITDA was a result of the extended outage at Kent Hills 1 and 2 wind facilities, a decrease in environmental credit sales and higher OM&A costs due to inflationary pressure on costs and the addition of the Windrise wind facility, partially offset by incremental production from the Windrise wind facility in Canadian Wind. Adjusted EBITDA for the nine months ended Sept. 30, 2022, increased by $31 million, compared to 2021. The increase in adjusted EBITDA was a result of higher renewable energy production, an increase in environmental credit sales, an increase from the commencement of a new Power Purchase Agreement (PPA) within the Australian Gas segment and recognition of liquidated damages related to Windrise turbine availability. This is offset by higher OM&A from the addition of the Windrise and North Carolina facilities and increased inflationary pressure on costs. In addition, the prior year included the unfavorable impact of liquidated damages recognized for steam supply outages within the Canadian Gas segment.

Net (loss) earnings attributable to common shareholders for the three and nine months ended Sept. 30, 2022, decreased by $40 million and $63 million respectively, compared to the same periods in 2021 due to lower finance income related to subsidiaries of TransAlta, higher asset impairments primarily related to higher discount rates, higher OM&A from inflationary pressure, higher OM&A, interest and depreciation costs associated with the commissioning and financing of the Windrise wind facility, and lower foreign exchange gains. This was partially offset by higher revenues.  The net earnings (loss) attributable to common shareholders for the nine months ended, Sept. 30, 2022, was favorably impacted by 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 nine months ended Sept. 30, 2022 decreased by $46 million and $97 million respectively compared to the same periods in 2021, primarily due to the extended outage at the Kent Hills 1 and 2 wind facilities, lower finance income related to subsidiaries of TransAlta and movements in working capital, partially offset by an increase in wind resources in Canada, the incremental production from the Windrise wind facility and higher environmental sales. In addition, for the nine months ended Sept. 30, 2022, there was the settlement of Sarnia contract liquidated damages provision.

FCF and CAFD for the three months ended Sept. 30, 2022 decreased by $6 million and $8 million respectively compared to the same period in 2021, primarily due to lower adjusted EBITDA and higher interest costs associated with the financing of the Windrise wind facility, partially offset by lower sustaining capital expenditures from lower planned major maintenance. In addition, CAFD is impacted 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.

FCF and CAFD for the nine months ended Sept. 30, 2022 increased by $19 million and $1 million, respectively, compared to the same period in 2021,  primarily due to higher adjusted EBITDA, lower current tax expense, lower sustaining capital expenditures, partially offset by the settlement of the Sarnia contract liquidated damages provision and higher interest costs associated with the financing of the Windrise wind facility. In addition, CAFD is 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
Board of Director Appointment

On Nov. 3, 2022, the Board of Directors of the Company appointed Mr. Michael Novelli as the TransAlta nominee director, pursuant to the Governance and Cooperation Agreement between TransAlta and the Company dated Aug. 9, 2013. Mr. Novelli retired from the role of Executive Vice President, Generation of TransAlta on September 30, 2022. In this role, he oversaw TransAlta's global operations across all fuel types, including those owned by the Company. Mr. Novelli has his Associate of Science Degree from the University of New York Regents College (now called Excelsior College) and completed the Director Professionalism Program with the National Association of Corporate Directors.  

Executed Contract Renewals with IESO at Sarnia Cogeneration and Melancthon 1 Wind Facilities

On Aug. 23, 2022, the Company announced that it was awarded capacity contracts for the Sarnia cogeneration facility and the Melancthon 1 wind facility from the IESO as part of the IESO's Medium-Term Capacity Procurement Request For Proposals. The new capacity contracts run from May 1, 2026, to April 30, 2031 and will extend the period of contracted revenues of the Sarnia cogeneration facility to April 30, 2031. The Company expects the gross margin from the Sarnia cogeneration facility to be reduced by approximately thirty per cent per year as a result of the IESO price cap under the new contract.

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 $229 million of cash.

The Company expects full year results to be near the low end of 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 Sept. 30, 2022 (Sept. 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 Sept. 30, 2022 (Sept. 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 earnings release 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 nine months ended Sept. 30, 2022 and Sept. 30, 2021:


Owned Assets

Economic Interests




3 months ended

Sept. 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)

33

12

80

—

21

6

45

197

(73)

124

Fuel, royalties and other costs(2)

3

3

53

—

1

4

2

66

(7)

59

Gross margin

30

9

27

—

20

2

43

131

(66)

65

Operations, maintenance, and
administration(3)

12

1

8

5

4

1

9

40

(14)

26

Taxes, other than income taxes

2

1

—

—

1

—

—

4

(1)

3

Net other operating income

(1)

—

—

—

—

—

—

(1)

—

(1)

Adjusted EBITDA(4)

17

7

19

(5)

15

1

34

88

(51)

37

Depreciation and amortization










(34)

Asset impairment charge










(20)

Finance income related to
subsidiaries of TransAlta










2

Interest income










2

Interest expense










(12)

Finance lease income










1

Foreign exchange gain










(2)

Earnings before income tax










(26)

(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

Sept. 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)

42

9

62

—

18

6

46

183

(69)

114

Fuel, royalties and other costs(2)

3

1

34

—

1

2

1

42

(4)

38

Gross margin

39

8

28

—

17

4

45

141

(65)

76

Operations, maintenance, and
administration(3)

9

2

7

4

4

1

9

36

(14)

22

Taxes, other than  income taxes

2

—

—

—

1

—

—

3

(1)

2

Adjusted EBITDA(4)

28

6

21

(4)

12

3

36

102

(50)

52

Depreciation and amortization










(34)

Asset impairment charge










(10)

Finance income related to
subsidiaries of TransAlta










19

Interest income










1

Interest expense










(9)

Finance lease income










1

Foreign exchange gain










1

Earnings before income tax










21

(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




9 months ended

Sept. 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)

160

26

222

—

83

19

130

640

(234)

406

Fuel, royalties and other costs(2)

12

5

137

—

2

11

5

172

(18)

154

Gross margin

148

21

85

—

81

8

125

468

(216)

252

Operations, maintenance, and
administration(3)

31

5

25

16

12

3

23

115

(38)

77

Taxes, other than income taxes

5

1

1

—

4

—

—

11

(4)

7

Net other operating income

(11)

—

—

—

—

—

—

(11)

(7)

(18)

Adjusted EBITDA(4)

123

15

59

(16)

65

5

102

353

(167)

186

Depreciation and amortization










(107)

Asset impairment charge










(31)

Finance income related to
subsidiaries of TransAlta










24

Interest income










4

Interest expense










(37)

Finance lease income










1

Foreign exchange gain










1

Earnings before income tax










41

(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




9  months ended

Sept. 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)

159

23

149

—

68

16

130

545

(213)

332

Fuel, royalties and other costs(2)

7

3

81

—

2

6

4

103

(12)

91

Gross margin

152

20

68

—

66

10

126

442

(201)

241

Operations, maintenance, and
administration(3)

27

5

22

15

11

3

27

110

(41)

69

Taxes, other than income taxes

5

1

1

—

3

—

—

10

(3)

7

Adjusted EBITDA(4)

120

14

45

(15)

52

7

99

322

(157)

165

Depreciation and amortization










(101)

Asset impairment charge










(10)

Finance income related to
subsidiaries of TransAlta










68

Interest income










5

Interest expense










(28)

Finance lease income










1

Foreign exchange gain










10

Earnings before income tax










110

(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

9 months ended

$ millions

Sept. 30, 2022

Sept. 30, 2021

Sept. 30, 2022

Sept. 30, 2021

Cash flow from operating activities

37

83

168

265

Change in non-cash operating working capital balances

(4)

(23)

(2)

(57)

Cash flow from operations before changes in working capital

33

60

166

208

Adjustments:





Sustaining capital expenditures – owned assets

(10)

(6)

(19)

(11)

Distributions paid to subsidiaries' non-controlling interest

—

(1)

—

(3)

Finance income – economic interests(1)

(2)

(19)

(24)

(68)

   Principal repayments of lease obligations

—

—

(1)

(1)

FCF - economic interest(1)

37

30

131

109

FCF(2, 3)

58

64

253

234

Deduct:





Tax equity distributions

(8)

(7)

(27)

(21)

Principal repayments of amortizing debt

(4)

(3)

(41)

(29)

CAFD(2)

46

54

185

184

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

267

267

267

267

FCF per share(2)

0.22

0.24

0.95

0.88

CAFD per share(2)

0.17

0.20

0.69

0.69

(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

9 months ended

$ millions

Sept. 30, 2022

Sept. 30, 2021

Sept. 30, 2022

Sept. 30, 2021

Finance income related to subsidiaries of TransAlta

2

19

24

68

Tax equity distributions

8

7

27

21

Principal repayments of amortizing debt

1

—

11

—

Return of capital and redemptions

40

3

80

17

Effects of changes in working capital and other timing

(14)

1

(11)

3

FCF(1) - economic interests

37

30

131

109

(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


3 months ended

Sept. 30, 2022

$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and
Solar

US Gas

Australian
Gas

Total

Adjusted EBITDA(1)

17

7

19

(5)

15

1

34

88

Provisions and contract liabilities

—

—

1

—

—

—

—

1

Interest expense

—

—

—

(12)

(1)

—

(6)

(19)

Current income tax expense

2

—

—

—

—

—

(5)

(3)

Sustaining capital expenditures

(4)

(2)

(4)

—

—

—

—

(10)

Interest income

—

—

—

2

—

—

1

3

Other

—

—

—

—

(2)

—

—

(2)

FCF(2)

15

5

16

(15)

12

1

24

58

Deduct:









Tax equity distributions

—

—

—

—

(8)

—

—

(8)

Principal repayments of amortizing debt

(3)

—

—

—

—

—

(1)

(4)

CAFD(2)

12

5

16

(15)

4

1

23

46

(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
Sept. 30, 2021
$ millions

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and
Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

28

6

21

(4)

12

3

36

102

Interest expense

—

—

—

(8)

—

—

(6)

(14)

Current income tax expense

—

—

—

(4)

—

—

—

(4)

Realized foreign exchange loss

—

—

—

1

—

—

—

1

Sustaining capital expenditures

(4)

(1)

(1)

—

—

—

(16)

(22)

Distributions paid to subsidiaries' non-
controlling interest

(1)

—

—

—

—

—

—

(1)

Interest income

—

—

—

1

—

—

1

2

FCF

23

5

20

(14)

12

3

15

64

Deduct:









Tax equity distributions

—

—

—

—

(7)

—

—

(7)

Principal repayments of amortizing debt

(3)

—

—

—

—

—

—

(3)

CAFD

20

5

20

(14)

5

3

15

54

(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


9 months ended Sept. 30, 2022

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and
Solar

US Gas

Australian
Gas

Total

Adjusted EBITDA(1)

123

15

59

(16)

65

5

102

353

Provisions and contract liabilities

(1)

—

(11)

—

—

—

—

(12)

Interest expense

—

—

—

(33)

(2)

—

(18)

(53)

Current income tax expense

1

—

—

—

—

—

(15)

(14)

Realized foreign exchange gain

—

—

—

1

—

—

—

1

Sustaining capital expenditures

(10)

(2)

(7)

—

(2)

—

(3)

(24)

Interest income

—

—

—

4

—

—

3

7

Principal repayments lease

 obligations

(1)

—

—

—

—

—

—

(1)

Other

—

—

—

—

(4)

—

—

(4)

FCF(2)

112

13

41

(44)

57

5

69

253

Deduct:









Tax equity distributions

—

—

—

—

(27)

—

—

(27)

Principal repayments of

 amortizing debt

(30)

—

—

—

—

—

(11)

(41)

CAFD(2)

82

13

41

(44)

30

5

58

185

(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


9 months ended Sept. 30, 2021

Canadian

Wind

Canadian

Hydro

Canadian Gas

Corporate

US Wind and
Solar

US Gas

Australian Gas

Total

Adjusted EBITDA(1)

120

14

45

(15)

52

7

99

322

Provisions and contract liabilities

(6)

—

12

—

—

—

—

6

Interest expense

—

—

—

(25)

(1)

—

(18)

(44)

Current income tax expense

—

—

—

(12)

—

—

(9)

(21)

Realized foreign exchange loss

—

—

—

2

—

—

—

2

Sustaining capital expenditures

(7)

(2)

(2)

—

(1)

(1)

(20)

(33)

Distributions paid to subsidiaries'

  non-controlling interest

(3)

—

—

—

—

—

—

(3)

Interest income

2

—

—

3

—

—

2

7

Principal repayments lease

  obligations

(1)

—

—

—

—

—

—

(1)

Other

—

—

—

—

(1)

—

—

(1)

FCF(2)

105

12

55

(47)

49

6

54

234

Deduct:









Tax equity distributions

—

—

—

—

(21)

—

—

(21)

Principal repayments of amortizing debt

(29)

—

—

—

—

—

—

(29)

CAFD(2)

76

12

55

(47)

28

6

54

184

(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' third 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: CAFD (as defined above) tracking towards Company's guidance; our strategy and growth plans; the remediation of the Kent Hills wind facilities; access to liquidity; and gross margins associated with the Sarnia cogeneration facility. 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; lower production and availability, including lower wind resource; disruptions to the Company's supply chain; 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.

SOURCE TransAlta Renewables Inc

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