Capital expenditure remains elevated, with a CapEx-to-OCF ratio that frequently exceeds 50%, indicating that internal cash generation is insufficient to fully fund the company's strategic transition.
TransAlta Corporation (TAC) cash flow statement — 29-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 |
|---|
| Cash from Operations | 671.12M | 645.47M | 796M | 1.46B | 877M | 1B | 702M | 849M | 820M | 626M | 744M | 432M | 796M | 765M | 520M | 694M | 811M | 580M | 1.04B | 847.2M | 489.6M | 619.4M | 613.4M | 756.5M | 437.7M | 715.6M | 198.7M | 422M | 475.2M | 506.6M |
| Operating CF Growth % | 1578.42% | -18.91% | -45.63% | 66.93% | -12.39% | 42.59% | -17.31% | 3.54% | 30.99% | -15.86% | 72.22% | -45.73% | 4.05% | 47.12% | -25.07% | -14.43% | 39.83% | -44.13% | 22.54% | 73.04% | -20.96% | 0.98% | -18.92% | 72.84% | -38.83% | 260.14% | -52.91% | -11.2% | -6.2% | - |
| Operating CF / Revenue % | 29.6% | 26.85% | 27.98% | 43.64% | 29.47% | 36.79% | 33.41% | 36.17% | 36.46% | 27.13% | 31.04% | 19.06% | 30.35% | 33.38% | 22.99% | 26.06% | 28.77% | 20.94% | 33.39% | 30.53% | 17.51% | 21.82% | 21.61% | 30.16% | 25.39% | 14.52% | 7.09% | 40.99% | 28.7% | 30.05% |
| Net Income | -22.94M | -137.89M | 239M | 796M | 161M | -425M | -253M | 176M | -90M | -118M | 276M | 116M | 232M | -4M | -546M | 343M | 219M | 181M | 235.55M | 308.8M | 44.9M | 198.8M | 170.2M | 257.2M | 210.8M | 227.7M | 292.6M | 191.6M | 211.4M | 182.6M |
| Depreciation & Amortization | 371.3M | 0 | 531M | 621M | 599M | 719M | 798M | 709M | 710M | 708M | 664M | 605M | 595M | 585M | 564M | 532M | 490M | 493M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -4.02M | 0 | -63M | 34M | 127M | -11M | -85M | -18M | -34M | -15M | 15M | 86M | -26M | -47M | 90M | 80M | 28M | 21M | 1.21M | -33.8M | -163.7M | 5.6M | 17.8M | 27.4M | -60.4M | 39.9M | 34.1M | -9M | -10.4M | 0 |
| Other Non-Cash Items | 223.79M | 780.36M | 51M | -111M | 285M | 544M | 153M | -136M | 116M | 156M | -265M | -65M | -49M | 73M | -46M | -188M | -59M | -4M | 591.31M | 506.5M | 797.6M | 447.3M | 400.4M | 276.4M | 336.7M | 356.9M | 290.2M | 294.2M | 280.9M | 172.7M |
| Working Capital Changes | 99.97M | 3M | 38M | 124M | -316M | 174M | 89M | 121M | -44M | -114M | 73M | -242M | 73M | 74M | -52M | -115M | 28M | -149M | 210.05M | 65.7M | -189.2M | -32.3M | 25M | 195.5M | -49.4M | 91.1M | -418.2M | -54.8M | -6.7M | 151.3M |
| Capital Expenditures | -374.22M | -410.67M | -520M | -888M | -949M | -489M | -500M | -431M | -297M | -389M | -379M | -502M | -521M | -593M | -742M | -483M | -790M | -1.6B | -1.01B | -599.1M | -223.7M | -325.5M | -365.8M | -555.7M | -945.8M | -1.25B | -795M | -683M | -320.8M | -336.9M |
| CapEx / Revenue % | 16.68% | 17.08% | 18.28% | 26.08% | 31.89% | 17.64% | 23.13% | 18.36% | 13.21% | 16.86% | 15.81% | 22.14% | 19.86% | 25.87% | 32.8% | 18.14% | 28.02% | 57.69% | 32.37% | 21.59% | 8% | 11.47% | 12.89% | 22.15% | 54.86% | 25.3% | 28.37% | 66.35% | 19.37% | 19.99% |
| CapEx / D&A | 1.02x | - | 0.98x | 1.41x | 1.58x | 0.67x | 0.61x | 0.61x | 0.42x | 0.55x | 0.57x | 0.83x | 0.88x | 1.01x | 1.32x | 0.91x | 1.61x | 3.24x | - | - | - | - | - | - | - | - | - | - | - | - |
| CapEx Coverage (OCF/CapEx) | 1.77x | 1.57x | 1.53x | 1.67x | 0.92x | 2.09x | 1.44x | 1.97x | 2.76x | 1.61x | 1.96x | 0.86x | 1.53x | 1.29x | 0.70x | 1.44x | 1.03x | 0.36x | 1.03x | 1.41x | 2.19x | 1.90x | 1.68x | 1.36x | 0.46x | 0.57x | 0.25x | 0.62x | 1.48x | 1.50x |
| Cash from Investing | -393.2M | -410.67M | -520M | -814M | -741M | -472M | -687M | -512M | -394M | 87M | -327M | -573M | -292M | -703M | -1.05B | -615M | -720M | -1.6B | -581.59M | -410.1M | -261.3M | -242.1M | -65.4M | -535.1M | -36.2M | -1.08B | -205M | -988.8M | -141.4M | -340.4M |
| Acquisitions | -101.28M | 7.99M | -217M | -13M | -10M | 8M | -32M | -200M | -28M | 478M | 6M | -101M | 224M | -126M | 3M | 33M | 15M | -766M | 0 | 0 | -1.2M | 0 | 116.5M | -136.3M | 777.9M | -9.8M | 486.9M | -257.7M | -249.2M | -2.2M |
| Purchase of Investments | -21M | 0 | -5M | -13M | -10M | -6M | -102M | -1M | 20M | -48M | -6M | -12M | -2M | -17M | -13M | 0 | -29M | -23M | 0 | 0 | 0 | -9.3M | 0 | 76.8M | 0 | 0 | -9.5M | -153.4M | -203.1M | 0 |
| Sale of Investments | 9.02M | 0 | 1M | 18M | 27M | 0 | 2M | 3M | 2M | 6M | 0 | -19M | 224M | 14M | -36M | 0 | 6M | 29M | 0 | 0 | 0 | 0 | 0 | 21.6M | 0 | 0 | 86.8M | 16.3M | 642.5M | 2.4M |
| Other Investing | -57.95M | -158.87M | 12M | 69M | 201M | 6M | -69M | 117M | -91M | 40M | 58M | 61M | -217M | 19M | -260M | -165M | 78M | 66M | 424.96M | 189M | -36.4M | 92.7M | 183.9M | 58.5M | 131.7M | 179.4M | 25.8M | 89M | -10.8M | -3.7M |
| Cash from Financing | -218.79M | -361.7M | -291M | -1.43B | 45M | -282M | 272M | -14M | -651M | -703M | -163M | 149M | -503M | -47M | 504M | -67M | -113M | 1.05B | -467.46M | -443.8M | -243.2M | -396.3M | -558.8M | -201M | -320.9M | 368.7M | -2.7M | 492.5M | -240.5M | -138.7M |
| Dividends Paid | -130.06M | -125.9M | -123M | -109M | -97M | -87M | -86M | -85M | -86M | -86M | -111M | -170M | -181M | -154M | -136M | -206M | -216M | -284M | -212.48M | -204.8M | -133.9M | -99.2M | -135.4M | -193.8M | -150.4M | -173M | -180.5M | -174.7M | -156.9M | 0 |
| Dividend Payout Ratio % | - | - | 31% | 8.35% | 108% | - | - | 54.88% | - | - | 40.83% | 563.64% | 76.92% | - | - | 62.62% | 98.63% | 124.86% | 131.61% | 66.25% | 298.22% | 49.9% | 79.55% | 61.35% | 71.08% | 75.77% | 61.69% | 91.18% | 74.22% | - |
| Debt Issuance (Net) | -2M | -1000K | 1000K | -1000K | 1000K | -1000K | 1000K | 1000K | -1000K | -1000K | -1000K | -1000K | -1000K | -1000K | 1000K | -1000K | -1000K | 1000K | 1000K | 1000K | -1000K | -1000K | -1000K | -1000K | -1000K | 1000K | 1000K | 1000K | -1000K | -1000K |
| Stock Issued | 341M | 3M | 12M | 5M | 3M | 8M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 293M | 2M | 1M | 398M | 15M | 19.5M | 12.9M | 19.6M | 3.4M | 264.16M | 1.8M | 182.99M | 4.6M | 305.6M | 214.3M | 6.5M |
| Share Repurchases | 0 | -23.98M | -143M | -87M | -52M | -4M | -57M | -68M | -23M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -129.92M | -250.27M | 0 | -300M | -2.3M | 0 | -49.71M | -44.28M | -23.9M | -18.1M | 0 | -2.9M |
| Other Financing | -30.99M | -21.98M | -43M | -1.06B | -160M | -158M | -118M | -141M | -2M | -72M | 6M | 385M | 80M | 165M | -96M | -51M | -59M | -62M | -236M | -75.48M | -73.6M | -53.8M | -47.6M | -81.38M | -31.98M | -156.06M | -184.8M | -74M | -80.1M | -195.3M |
| Net Change in Cash | 70.4M | -104.35M | -11M | -786M | 187M | 244M | 292M | 322M | -225M | 9M | 251M | 11M | 1M | 15M | -22M | 14M | -24M | 32M | -1.21M | -14.7M | -13.7M | -21.9M | -17.9M | 11.7M | 81.3M | 8.2M | -21.5M | -79.9M | 93.3M | 27.5M |
| Exchange Rate Effect | 11.28M | 22.55M | 4M | -4M | 6M | -3M | 5M | -1M | 0 | -1M | -3M | 3M | 0 | 0 | 2M | 2M | -2M | -3M | 8.5M | -8M | 1.2M | -2.9M | -7.1M | -8.7M | 700.35K | 800.7K | -12.5M | -5.6M | 0 | 0 |
| Cash at Beginning | 274M | 387.12M | 348M | 1.13B | 947M | 703M | 411M | 89M | 314M | 305M | 54M | 43M | 42M | 27M | 49M | 35M | 82M | 50M | 51M | 65.6M | 79.3M | 101.2M | 155M | 143.3M | 62M | 53.8M | 75.3M | 155.2M | 61.9M | 34.4M |
| Cash at End | 302M | 282.77M | 337M | 348M | 1.13B | 947M | 703M | 411M | 89M | 314M | 305M | 54M | 43M | 42M | 27M | 49M | 58M | 82M | 49.78M | 50.9M | 65.6M | 79.3M | 137.1M | 155M | 143.3M | 62M | 53.8M | 75.3M | 155.2M | 61.9M |
| Free Cash Flow | 296.9M | 234.81M | 276M | 576M | -72M | 512M | 202M | 418M | 523M | 237M | 365M | -70M | 275M | 172M | -222M | 211M | 21M | -1.02B | 31.57M | 248.1M | 265.9M | 293.9M | 247.6M | 200.8M | -508.1M | -530.9M | -596.3M | -261M | 154.4M | 169.7M |
| FCF Growth % | 2383.83% | -14.92% | -52.08% | 900% | -114.06% | 153.47% | -51.67% | -20.08% | 120.68% | -35.07% | 621.43% | -125.45% | 59.88% | 177.48% | -205.21% | 904.76% | 102.06% | -3324.71% | -87.28% | -6.69% | -9.53% | 18.7% | 23.31% | 139.52% | 4.29% | 10.97% | -128.47% | -269.04% | -9.02% | - |
| FCF Margin % | 13.1% | 9.77% | 9.7% | 17.17% | -2.42% | 18.82% | 9.61% | 17.81% | 23.25% | 10.27% | 15.23% | -3.09% | 10.48% | 7.5% | -9.81% | 7.92% | 0.74% | -36.75% | 1.02% | 8.94% | 9.51% | 10.35% | 8.72% | 8% | -29.47% | -10.78% | -21.28% | -25.35% | 9.32% | 10.07% |
| FCF / Net Income % | -1294.4% | -170.29% | 120.52% | 82.88% | -144% | -95.34% | -70.38% | 509.76% | -264.14% | -148.13% | 215.98% | -318.18% | 151.1% | -521.21% | 38.08% | 69.18% | 9.59% | -562.43% | 13.4% | 80.34% | 592.21% | 147.84% | 145.48% | 78.07% | -241.03% | -233.16% | -203.79% | -136.22% | 73.04% | 92.94% |
Quick answers to the most common questions about buying TAC stock.
TransAlta Corporation (TAC) generated $645.5M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
TransAlta Corporation (TAC) generated $234.8M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
TransAlta Corporation (TAC) spent $410.7M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, TransAlta Corporation (TAC) returned $125.9M to shareholders via cash dividends and spent $24.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Merchant price and carbon volatility
Operating Cash Flow Quality Volatility
As reported in quarterly filings, TransAlta’s operating cash flow has demonstrated significant inconsistency, ranging from a low of $7.0 million in 2025Q1 to a peak of $310.0 million in 2023Q4, highlighting the inherent instability of cash generation within a merchant-exposed power generation business model.
The wide variance in operating cash flow suggests that the company’s ability to cover fixed obligations is highly dependent on Alberta pool price cycles rather than stable, regulated rate recovery. Investors should monitor whether the shift toward renewable PPAs can provide a more predictable cash floor to offset the inherent volatility of the remaining merchant gas and hydro assets.
Capital Intensity Outpacing Internal Funding
Based on historical financial data, TransAlta’s capital expenditure reached a high of $322.0 million in 2024Q4, with the CapEx-to-OCF ratio frequently exceeding 50%, indicating that the company is aggressively reinvesting to facilitate its coal-to-gas and renewable transition despite inconsistent internal cash generation.
The high level of capital intensity appears to be a structural necessity for the company's transition strategy, yet it leaves little room for organic debt reduction. This persistent reinvestment cycle suggests that the company remains reliant on external capital markets to fund its growth initiatives while legacy assets continue to face accelerated depreciation.
Leverage Constraints and Financing Capacity
According to recent financial statements, the company’s debt-to-equity ratio of 3.06 underscores a vulnerable balance sheet, which may limit future financing capacity as the firm attempts to navigate the capital-intensive transition away from coal-fired generation in a high-interest-rate environment.
The reliance on external financing to bridge the gap between operating cash flow and capital requirements appears to be a primary risk factor for shareholders. Given the current negative net margins, the company’s ability to secure debt on reasonable terms may be increasingly scrutinized by credit markets, potentially raising the cost of capital for future projects.
Dividend Coverage Amid Cash Fluctuations
As indicated by the provided data, the OCF-to-dividend coverage ratio has fluctuated wildly, dropping to a concerning 0.2x in 2025Q1, which suggests that dividend sustainability is currently tethered to the volatile merchant power market rather than consistent, recurring operational cash flows.
The wide swings in dividend coverage ratios imply that the current payout policy may be at risk during periods of low merchant pricing or high maintenance capital requirements. Investors should interpret these metrics as a signal that the dividend is not currently supported by a stable, defensive cash flow profile typical of traditional regulated utilities.