On Thursday, TransAlta Corporation (NYSE:TAC) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Linda Ezergailis – TD Securities: Just a question on the Centralia recontracting situation, other than gap on pricing with your potential counterparties, is there any other reason, stopping, or any other points of difference precluding you reaching any long-term contracts at this point that you’re aware of?
Dawn Farrell – President and CEO: No.
Brett Gellner – CFO: No. It’s really, obviously each of them have different load needs, and so it’s really understanding that and working with those, but other than that no.
Linda Ezergailis – TD Securities: Okay. Thank you. Just as a follow-up, you mentioned that Centralia in Q2 will be slightly less contracted this year than last year, can you provide us any more color in terms of the contract expiry profile on that facility?
Brett Gellner – CFO: Yeah. We – as you know, we’ve provided for the whole company, and that’s what we’ve provided. Clearly, Q2 typically is a period when we take advantage of low prices, and we can now (quickly) dispatch the units and we’ll continue to do that in this quarter.
Linda Ezergailis – TD Securities: Okay. Do you have any plans at any point of providing details around your current contracting situation in Centralia, that would be very helpful.
Brett Gellner – CFO: Yeah. Not specifically, just given the nature or the competitive nature of that information in that market.
Paul Lechem – CIBC World Markets: Thank you. Continuing on the theme of Centralia, I was just wondering if you can give us any parameters around the right – if a write down were to occur, what are the parameters that we should think about where the write-down would occur, and how you – and what date would you be looking to do that valuation on?
Brett Gellner – CFO: Yeah. Paul, i mean, it’s really dependent on where we get to not only with some of the counterparties on the contract side, but also as Dawn indicated working with our suppliers and around the cost structure and how we basically optimize that plant over the 2020 to 2025, well from now to 2020 for both units, and then 2021 to 2025 for the other. So, too early to give any sense. So all we are just pointing out is when we go do our work which we have to do for all our assets under IFRS just we’ll take all that into consideration our expectations for prices and then report back when we’re ready to.
Paul Lechem – CIBC World Markets: The associated tax asset with Centralia is there any way you can maximize the value of that asset?
Brett Gellner – CFO: Well, we obviously will maximize today because it allows us to obviously minimize cashes paid and so going forward it’s just when we value – the tax is no different than the plant. We value it under IFRS in a similar fashion and so you can assure that we’re going to continue to be able to generate or maximize or minimize our tax situation there, depending on where we get in the contracting.
Paul Lechem – CIBC World Markets: But in the event of a write-down, is there anything you could do to maximize that asset in any other way?
Brett Gellner – CFO: Well, again like the assets under IFRS, if you write something down, you actually can write it back up to the original value. So, it’s similar situation. So if there is other growth opportunities that we bolt on in the U.S. then there may be that opportunity, but I can’t comment on that until we actually have something.
Paul Lechem – CIBC World Markets: If I can sneak one more in just around the write-down of the coal inventory at Centralia, is that – was there anything different – why the write-down this quarter, is anything different now than in previous quarters that would have caused the write-down now and can we expect any further write-downs in future quarters?
Brett Gellner – CFO: Yeah, we evaluated the value of the coal every quarter and have been; and so in this situation just given further de-designation of hedges, the way you have to value that coal then is not against our hedges, but against what the spot prices are and given that coal as you can appreciate, you burn over kind of — a pile is over kind of a 30 to 60 day period, you have to look over that period to do the valuation, and when we look at prices in these next 30 to 60 days, that’s why we’re in that situation. We weren’t in that in previous periods, but it’s a non-cash item, and we go through it every quarter.