TransAlta Corporation

Ladies and gentlemen, good morning. My name is Simon and I will be your conference operator today. At this time, I would like to welcome everyone to the TransAlta Corporation first quarter 2020 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. Ms. Chiara Valentini, you may begin your conference.

Thank you, Simon. Good morning, everyone, and welcome to TransAlta's first quarter 2020 conference call. With me today are Don Farrell, President and Chief Executive Officer, Todd Stack, Chief Financial Officer, John Kousinioris, Chief Operating Officer, Brett Gellner, Chief Development Officer, and Kerry O'Reilly Wilkes, Chief Legal, Regulatory and External Affairs Officer. Today's call is webcast and I invite those listening on the phone lines to view the supporting slides that are currently posted on our website. A replay of the call will be available later today and the transcript will be posted to our website shortly thereafter. As usual, all of the information provided during this conference call is subject to the forward-looking statement qualification set out on slide two, further detailed in our MD&A, and incorporated in full for the purposes of today's call. All amounts referenced during the call are in Canadian currency unless otherwise stated. The non-IFRS terminology used, including comparable EBITDA, funds from operations, and free cash flow are also reconciled in the MD&A for your reference. On today's call, Todd and Dawn will provide an overview of the quarter's results along with expectations for balance of year 2020. After these prepared remarks, we will open the call for questions. With that, let me turn the call over to Dawn.

Thanks, Kira, and welcome everyone to our call today. Today I'm going to make a few comments on our first quarter and our outlook for 2020. Of course, Todd will take you through the details. I'll come back for a short period after to talk about how we're doing against our priorities for 2020. and I'll also give you some insight into the exceptional job that our employees are doing as they respond to this COVID-19 virus. Overall, the results for the quarter were solid and in line with our expectations. The quarter did demonstrate the strength of our operations, our contractedness and our portfolio diversification. And you'll see today from Todd that we continue to have strong liquidity and that we will achieve our goal of reducing our senior recourse debt to $1.2 billion by November. In the first quarter, financially, we delivered $220 million of EBITDA and $109 million of free cash flow, or about $0.39 a share. These results were ahead of 2019 by 18% on a per share basis. We achieved strong availability and safety performance. The entire fleet had an average availability of 92.8% for the quarter. And we achieved safety results of 1.18 on our total injury frequency rate, which are really exceptional results. And we accomplished those strong operational performance while also changing many of our frontline operating maintenance and construction protocols to keep our people safe from the COVID-19 virus. On March 12th, we began operating with nearly 650 people in their homes who frankly never missed a beat. So far, our protocols have kept people safe from the virus, which is a new priority for us as we move through the rest of 2020 and into 2021. We were opportunistic during the quarter with our NCIB, and we returned $9 million of capital to our shareholders through our share buyback program. and we ended the quarter with continued strong liquidity sitting at $1.7 billion which includes approximately $340 million of cash. We do have the necessary funding in place for our 2020 bond maturity later this year and we have a number of unencumbered assets to progress on our long-term financing of our growth plan. So everything is just moving along in the direction that we want it to. Our strategy remains unchanged and our growth team continues to focus on delivering our pipeline of investments regarding our coal to gas, our wind and our cogeneration projects. And we're on track to complete the Sun 6 conversion in 2020 and the Keep Hill conversions in 2021. And finally, we have commenced construction on wind rise and wind charger. We also in the quarter announced that we furthered our gas supply strategy here in Alberta. So that we could support our conversions, additionally support our conversions by announcing the sale of the Pioneer pipeline to gain greater access to the NGTL network. And as we look forward to the balance of the year, we continue to have confidence in our 2020 free cash flow guidance. Now, through April and the first part of May, we have observed lower power demand, and that is weakening Alberta power prices. However, we have a diversified fleet by fuel and by region, and we continue to benefit from our portfolio's high level of overall contractedness. You'll see today that our team has also done an exceptional job to protect cash flows through our hedging strategy. And today, as we reiterate our 2020 free cash flow outlook, and we remain confident that our dividend is well-funded, you'll see why we have that confidence. Just looking at our strategic priorities, despite the changes in this new environment that we're all living in, I think this is the first time that we're delivering this quarterly call while all being separated from our home offices, our key priorities are the same as reported to you in January, but we have made an addition. Due to COVID-19, we have added a sixth objective, which now underpins everything we do. And it's keeping TransAlta people protected and resilient under the new reality of COVID-19. And of course we are essential workers, so it's critically important that we do that. I will speak more specifically after Todd's review of the quarter and our outlook for 2020 on what this objective entails. Your TransAlta team has worked extremely hard to put in protocols to keep our people and our community safe and keep the company moving ahead in a very sure-footed way. It's quite impressive and their work will build your confidence that our objectives can be achieved while keeping our people safe and healthy. So with that, I'm going to turn it over to Todd and he'll get into some of the details in our Q1 financial results.