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TransAlta Corporation (TAC)
Q1 2014 Earnings Conference Call
April 29, 2014 4:00 PM ET
Brent Ward - Director, Corporate Finance and IR
Dawn Farrell - President and CEO
Donald Tremblay - CFO
Brett Gellner - CIO
John Kousinioris - Chief Legal and Compliance Officer
Todd Stack - VP and Treasurer
Paul Lechem - CIBC World Markets
Ben Pham - BMO Capital Markets
Linda Ezergailis - TD Securities
Juan Plessis - Canaccord Genuity
Charles Fishman - Morningstar
Matthew Akman - Scotiabank
Andrew Kuske - Credit Suisse
Robert Kwan - RBC Capital Markets
Previous Statements by TAC
» TransAlta's CEO Discusses Q4 2013 Results - Earnings Call Transcript
» TransAlta's CEO Discusses Q3 2013 Results - Earnings Call Transcript
» TransAlta's CEO Discusses Q2 2013 Results - Earnings Call Transcript
» TransAlta's CEO Discusses Q1 2013 Results - Earnings Call Transcript
Thank you, Sachi. Good morning everyone and welcome to TransAlta’s first quarter 2014 conference call. I am Brent Ward, Director of Corporate Finance & Investor Relations. With me today are Dawn Farrell, President and Chief Executive Officer; Donald Tremblay, Chief Financial Officer; Brett Gellner, Chief Investment Officer; John Kousinioris, Chief Legal & Compliance Officer; and Todd Stack, Vice President & Treasurer.
The call today is webcast, and I encourage those listening on the phone lines to view the supporting slides which are available on our Web site. A replay of the call will be available later today and a transcript will be posted to our Web site shortly thereafter.
All information provided during this conference call is subject to the forward-looking qualification, which is detailed in the MD&A and incorporated in full for the purposes of today's call. The amounts referenced are in Canadian currency unless otherwise stated. The non-IFRS terminology used, including comparable gross margin, comparable EBITDA, funds from operations, free cash flow, and comparable earnings are reconciled in the MD&A.
On today's call, Dawn and Donald will provide an overview of our operational and financial performance for the first quarter, provide an update on recent events and activities, and then we’ll open it up to questions.
With that, let me turn the call over to Dawn.
Thanks, Brent and welcome everyone. It's great to be here. We just finished our 2013 Annual Meeting, and we thank you all for being patient and waiting till later in the day it helped us have a good meeting and then also meet with some of our retail shareholders.
On today’s call I’m going to comment more specifically on our Q1 results. I will review our recent business highlights, provide with you the market update, particularly on Alberta and then we’ll also review how we feel we’re tracking so far this year against our targets.
Before we get into the results, I would like to take a moment to introduce our recent appointment, some of you already know that Brett Gellner has been appointed to role of Chief Investment Officer and will now be solely focused on leading all growth aspects of the Company. He is excited about that and so are we. Donald Tremblay who you’ll hear from later in this call has joined TransAlta and he’s now our new CFO and Wayne Collins who is not here with us today but we thought we’d mention him, who will join us during the second quarter of this year and will take on the leadership accountability for Coal and Mining. So we’re building the senior management team and we’re pretty excited about where we’re going.
Moving on to the quarterly results, I am pleased to report that we’ve had a good start to the year. During the first quarter, we saw steady performance from our Generation business across the board, strong availability across the fleet and in line with our annual targets. And we did have a sort of extra strong performance I guess in our energy trading which I’ll put into context for you a little later in the call. As a result, we did deliver increased comparable EBITDA, FFO and free cash compared to the same period for 2013.
During the first quarter, we made some significant progress executing our business plan. Our focus does remain on operations growth, strengthening our balance sheet and contracting, so let me start first with operations because I think it is the most important thing in terms of consistency of operations that we need to do throughout the year and beyond. During the first quarter, we continued to improve on our execution of the operations plan. We did invest a lot of time and effort to position out coal fleet for better performance. Our Canadian Coal management team is driving our coal action plan to improve the reliability of our fleet and reduce the operational cost both in the short-term and sustainably over the longer term.
We are starting to see some of the benefits of our plan to outage management in the first quarter of 2014. And as we’ve said before, we believe the discipline rather than further investment is really the necessarily ingredient to improving the performance of the fleet and they were able to show that as they went through the quarter. Availability for the quarter was very strong and was delivered from all business lines. More importantly untied outage rates were lower compared to the same period last year and that’s certainly an indicator that we look at very carefully. Unit availability is good and we’re managing through balance of plant issue to restart the unit to full output within the current quarter that must be K3 net. Yes just in terms of K3 we’ve had a bit of de-rating there and that’s being restored and we can talk about that on the Q&A.