TransAlta achieves annual availability targets for 2012, announces fourth quarter, and files year end disclosure documents

TransAlta achieves annual availability targets for 2012, announces fourth 
quarter, and files year end disclosure documents 
CALGARY, ALBERTA -- (Marketwire) -- 02/27/13 --  
HIGHLIGHTS 


 
--  Adjusted fleet availability was in line with our annual target of 89 to
    90 per cent at 89.4 per cent for the quarter and 90.0(1) per cent for
    the year 
--  Comparable EBITDA(2,3,4) increased to $310 million for the quarter, up
    $43 million from the same period in 2011 driven by solid results from
    generation and a full quarter contribution from the Solomon acquisition;
    Comparable EBITDA for the full year was $1,014 million 
--  Operations Maintenance and Administration ("OM&A") declined 10 per cent
    year over year, or $52 million, compared to our target reduction of 5
    per cent 
--  Energy Trading delivered $13 million of gross margin in the fourth
    quarter, and $3 million for the year 
--  Funds From Operations(3,4) increased to $205 million for the quarter, up
    $16 million from the same period in 2011; Funds From Operations for the
    full year were $776 million

 
TransAlta Corporation ("TransAlta") (TSX:TA) (NYSE:TAC) today
reported 2012 fourth quarter comparable earnings of $54 million
($0.21 per share), up from $29 million ($0.13 per share) in the
fourth quarter of 2011. Net earnings attributable to common
shareholders for the fourth quarter of 2012 were $38 million ($0.15
per share).  
The increase in comparable earnings for 2012 was driven by strong
fleet availability, the addition of the Solomon acquisition and lower
OM&A costs, partially offset by higher planned outages at the Alberta
coal Power Purchase Arrangement ("PPA") facilities, Genesee Unit 3
and lower Energy Trading results. Fourth quarter 2012 net earnings
were lower than comparable earnings primarily due to the impact of
de-designation of hedges and corporate realignment charges incurred
to reposition TransAlta for strategic growth. 
"TransAlta's fourth quarter has shown promising gains," said Dawn
Farrell, TransAlta President and CEO. "This return to more normalized
results is a positive step in the right direction and a good starting
point for 2013. 2012 marked a year of substantial progress for
TransAlta. We have stayed the course and completed what we said we
would do, including setting the fleet up for end of life and
realigning the company to ensure continuous focus on operational
excellence and growth. These efforts will carry forward into the
future and are expected to reduce costs by approximately $25 to $30
million on an annualized basis by the end of 2013." 
(1) Adjusted for economic dispatching at Centralia. 
(2) EBITDA refers to Earnings before interest, taxes, depreciation
and amortization. 
(3) Comparable earnings (loss), comparable earnings (loss) per share,
comparable EBITDA, and funds from operations, are not defined under
International Financial Reporting Standards ("IFRS"). Presenting
these measures from period to period provides supplemental
information to help management and shareholders evaluate earnings'
trends in comparison with prior periods' results. Refer to the
Non-IFRS Measures section of the Management's Discussion and Analysis
("MD&A") for further discussion of these items, including, where
applicable, reconciliations to net earnings (loss) attributable to
common shareholders, operating income (loss), and cash flow from
operating activities. 
(4) Comparable EBITDA and funds from operations are key supplemental
performance measures for TransAlta which provide additional
information regarding the company's ability to cover its capital
requirements and dividends as well as strengthen its balance sheet
and finance growth. 
Consistent strength maintained in Generation performance 
Fleet availability for the quarter remained strong at 89.4 per cent
compared to 90.3 per cent in the fourth quarter of 2011. The marginal
decrease in availability is primarily attributable to higher planned
outages at the Alberta coal PPA facilities and Genesee Unit 3,
partially offset by lower unplanned outages at the Alberta coal PPA
facilities and Genesee Unit 3. 
Improvement in EBITDA and cash flow in the quarter 
Comparable EBITDA improved $43 million in the fourth quarter to $310
million, compared to $267 million for the same period in 2011. Funds
from operations increased $16 million in the fourth quarter to $205
million, compared to $189 million for the same period in 2011. These
increases were driven by solid results in Generation, the addition of
Solomon to the fleet, and lower OM&A costs, which more than offset
lower trading margins. 
TRANSALTA 2012 FULL YEAR RESULTS  
TransAlta reported full year comparable earnings of $118 million
($0.50 per share) versus $230 million ($1.04 per share) in 2011.
Comparable results for the year were driven by strong availability
across the fleet, but were more than offset by significantly lower
Energy Trading gross margins, which were down $134 million from 2011,
as well as higher planned outages at the Alberta coal PPA facilities
and Genesee Unit 3. 
The net loss attributable to common shareholders for the year was
$614 million ($2.61 per share) compared to net earnings of $290
million ($1.31 per share) in 2011. This loss is largely due to asset
impairment charges of $226 million incurred from writing down the
carrying value of the Centralia Plant under IFRS, a write off of $169
million of deferred tax assets, and the one-time impact of $189
million based on the Alberta arbitration panel's decision on Sundance
Units 1 and 2, outlined in our press release of July 23, 2012. 
Strong Generation performance; TransAlta delivers on its fleet
availability goal of 89 - 90 per cent for the year 
Adjusted fleet availability for the full year was 90.0 per cent, up
from 88.2 per cent in 2011, in spite of six major planned coal
outages to complete the three-year investment program. Adjusted fleet
availability increased as a result of lower planned and unplanned
outages at the Centralia Plant and lower unplanned outages at the
Alberta coal PPA facilities and at Genesee Unit 3, partially offset
by higher planned outages at the Alberta coal PPA facilities and
Genesee Unit 3. 
TransAlta maintains stable cash flow for the year  
Funds from operations for the year were $776 million versus $809
million in 2011, down due to lower cash earnings which can be largely
attributed to the decrease in Energy Trading gross margins, partially
offset by an increase in Generation gross margins, after excluding
the impact of the Sundance Units 1 and 2 arbitration from earnings.  
Highlights - 2012 
Financial 


 
--  Comparable EBITDA of $1,014 million
 
--  Funds from operations of $776 million or $3.30 per share
 
--  Comparable earnings of $118 million or $0.50 per share
 
--  Dividends paid of $1.16 per share to common shareholders 
 
--  Approximately 70 per cent participation in our dividend reinvestment
    plan, resulting in an estimated annualized cash savings of approximately
    $210 million

 
Operating 


 
--  Coal: Comparable gross margins from TransAlta's coal fleet increased $20
    million year-over-year despite higher planned outages
 
--  Gas: Comparable gross margins from TransAlta's gas fleet increased $21
    million year-over-year as a result of strong availability and reduced
    gas input costs 
 
--  Renewables: Comparable gross margins increased $4 million year-over-year
    primarily due to strong hydro generation outpacing lower prices in
    Alberta and lower wind volumes in Western and Eastern Canada
 
--  Energy Trading: Gross margins decreased $134 million year-over-year due
    to unfavorable market conditions relative to trading positions held

 
Major maintenance  


 
--  TransAlta completed its three-year intensive major maintenance program
    for its coal fleet. Completion of this capital investment program sets
    up these coal units to operate to end of life

 
Growth 


 
--  Acquisition of the 125 megawatt ("MW") dual-fuel Solomon power station
    for U.S. $318 million, which is fully contracted with Fortescue Metals
    Group Ltd 
 
--  TransAlta and MidAmerican Energy Holdings Company entered into a new
    strategic partnership through which the two companies will work together
    to develop, build, and operate new natural gas-fired electricity
    generation projects in Canada
 
--  Construction of the 68 MW contracted New Richmond wind farm in Quebec is
    on track to be commissioned in the first quarter of 2013
 
--  Realignment of resources as part of an ongoing strategy to continuously
    improve operational excellence and accelerate growth, resulting in $25 -
    $30 million cost savings per year by the end of 2013

 
Significant Events 
Sundance Unit 3 
On November 23, 2012, TransAlta reported that the independent
arbitration panel granted TransAlta force majeure relief for derates
and outages in 2012 and 2011 related to the mechanical failure of
critical generator components on Sundance Unit 3. This decision
validates that the mechanical failure was beyond TransAlta's
reasonable control. 
Federal Greenhouse gas regulations 
As a result of amendments to Canadian federal regulations requiring
coal-fired plants be shut down after a maximum of 50 years of
operation, TransAlta has reviewed the useful lives of the Alberta
coal generating facilities and related coal mining assets, and where
permitted under the regulations, extended the useful lives to a
maximum of 50 years.  
Sundance Units 1 and 2 
On July 23, 2012, TransAlta reported the independent arbitration
panel considering TransAlta's decision in December 2010 to shut down
two units at its Sundance generating station had allowed the
company's claim of force majeure. This decision validates TransAlta's
belief the units failed due to issues beyond its control.  
TransAlta also sought to have the PPA terminated for economic
reasons, as provided for under the legislation. The panel did not
agree with this claim. The cost to repair the units is estimated at
approximately $190 million. This investment is expected to start
generating cash flow in the fourth quarter of 2013.  
Net penalties of $189 million from the arbitration panel's decision
were recorded in the second quarter of 2012. Additionally, TransAlta
wrote down its Sundance Units 1 and 2 by $43 million in the second
quarter. This impairment was reversed by $41 million in the third
quarter as a result of additional years of merchant operations
expected to be realized due to the amendments to Canadian federal
regulations.  
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 MD&A. These documents are available through
TransAlta's website at www.transalta.com 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. 
A complete copy of TransAlta's fourth quarter extended news release
is available in the Investors Centre section of our website:
www.transalta.com. 
TransAlta will hold a conference call and live webcast and
presentation 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 "Brent Ward"
as moderator. 
Fourth Quarter and 12 Months Ended Dec. 31 2012 Highlights: 


 
----------------------------------------------------------------------------
                                3 months    3 months  12 months    12 months
In millions, unless           ended Dec.  ended Dec. ended Dec.   ended Dec.
 otherwise stated               31, 2012    31, 2011   31, 2012     31, 2011
----------------------------------------------------------------------------
Availability adjusted for                                                   
 Centralia (%)                      89.4        90.3       90.0         88.2
----------------------------------------------------------------------------
Production (GWh)                  10,880      11,662     38,750       41,012
----------------------------------------------------------------------------
Revenue                              661         701      2,262        2,663
----------------------------------------------------------------------------
Gross margin(1)                      398         409      1,453        1,716
----------------------------------------------------------------------------
Operating income(1)                  132         122         42          645
----------------------------------------------------------------------------
Net earnings (loss)                                                         
 attributable to common                                                     
 shareholders                         38          24       (614)         290
----------------------------------------------------------------------------
Comparable earnings(2)                54          29        118          230
----------------------------------------------------------------------------
Basic and diluted earnings                                                  
 (loss) per common share            0.15        0.11      (2.61)        1.31
----------------------------------------------------------------------------
Comparable earnings per                                                     
 share(2)                           0.21        0.13       0.50         1.04
----------------------------------------------------------------------------
Comparable EBITDA(2)                 310         267      1,014        1,045
----------------------------------------------------------------------------
Funds from operations(2)             205         189        776          809
----------------------------------------------------------------------------
Funds from operations per                                                   
 share(2)                           0.80        0.84       3.30         3.64
----------------------------------------------------------------------------
Cash flow from operations            245         187        520          690
----------------------------------------------------------------------------

 
(1) Gross margin and operating income are Additional IFRS measures.
Refer to the Additional IFRS measures section of the MD&A. 
(2) 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 MD&A for an explanation and, where applicable,
reconciliations to net earnings(loss) attributable to common
shareholders, operating income (loss) and cash flow from operating
activities. 
Dial-in numbers:   
Toll-free North American participants call: 1-800-319-4610 
Outside of Canada & USA call: 1-604-638-5340 
A link to the live webcast will be available on the Investor Centre
section of TransAlta's website at http://www.transalta.com/investor-c
entre/events-presentations/webcasts-conference-calls.If you are unable to 
participate in the call, the instant replay is
accessible at 1-604-638-9010 with TransAlta pass code 2231 followed
by the # sign. 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. 
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 geothermal, wind, hydro,
natural gas and coal facilities in order to provide customers with a
reliable, low-cost source of power. For over 100 years, TransAlta has
been a responsible operator and a proud contributor to the
communities in which it works and lives. TransAlta has been selected
by Jantzi-Sustainalytics as one of Canada's Top 50 Socially
Responsible Companies since 2009 and is recognized globally for its
leadership on sustainability and corporate responsibility standards
by FTSE4Good. 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.
Contacts:
TransAlta Corporation - Investor inquiries:
Brent Ward
Director, Corporate Finance and Investor Relations
Phone: 1-800-387-3598 in Canada and U.S.
investor_relations@transalta.com 
TransAlta Corporation - Media inquiries:
Stacey Hatcher
Senior Corporate Relations Advisor
Cell: 587-216-2242
Toll-free media number: 1-855-255-9184
Alternate local number: 403-267-2540