Net earnings attributable to common shareholders for the three months ended March 31, 2025 decreased to $176 million, or 79 per cent, compared to the same period in 2024, primarily due to: The factors causing lower adjusted earnings before income taxes noted above;Higher unrealized mark-to-market losses recorded in the Wind and Solar segment primarily related to long-term wind energy sales related to the Oklahoma facilities;Lower unrealized mark-to-market gains recorded in the Gas segment primarily related to lower volumes hedged in the current period;Higher asset impairment charges on the Planned Divestiture assets classified as Assets Held for Sale, offset by a fair value gain on the contingent consideration payable in the first quarter of 2025 driven by updated expectations of the fair value less costs to sell on the Planned Divestitures;Higher asset impairment charges due to an increase in decommissioning and restoration provisions on retired assets driven by a decrease in discount rates and revisions in estimated decommissioning costs; impairment charges related to development projects that are no longer proceeding, partially offset by an impairment reversal related to certain energy transition assets reclassified to assets held for sale; andHigher spending relating to planning and design work on a planned upgrade to our ERP system; partially offset byHigher unrealized mark-to-market gains recorded in the Hydro segment primarily related to the favourable changes in forward prices;Lower current income tax expense due to lower earnings before income taxes in 2025 compared to the same period in 2024; andNet loss attributable to non-controlling interests compared to net earnings in the same period in 2024, primarily due to lower net earnings for TA Cogen resulting from lower merchant pricing in the Alberta market.
The following table reflects adjusted EBITDA and adjusted earnings (loss) before income taxes by segment and provides reconciliation to earnings (loss) before income taxes for the three months ended March 31, 2024: HydroWind &Solar(1)GasEnergyTransitionEnergyMarketingCorporateTotalEquity-accountedinvestments(1)ReclassadjustmentsIFRSfinancialsRevenues112 139 433 217 52 — 953 (6)— 947 Reclassifications and adjustments: Unrealized mark-to-market (gain) loss(5)(21)(91)(6)(3)— (126)— 126 — Decrease in finance lease receivable— 1 4 — — — 5 — (5)— Finance lease income— 1 1 — — — 2 — (2)— Unrealized foreign exchange gain on commodity— — (1)— — — (1)— 1 — Adjusted revenue107 120 346 211 49 — 833 (6)120 947 Fuel and purchased power6 9 142 166 — — 323 — — 323 Carbon compliance— — 40 — — — 40 — — 40 Adjusted gross margin101 111 164 45 49 — 470 (6)120 584 OM&A13 20 46 18 10 28 135 (1)— 134 Reclassifications and adjustments: Acquisition-related transaction and restructuring costs— — — — — (3)(3)— 3 — Adjusted OM&A13 20 46 18 10 25 132 (1)3 134 Taxes, other than income taxes1 4 3 — — — 8 — — 8 Net other operating income— (2)(10)— — — (12)— — (12)Adjusted EBITDA(2)(3)87 89 125 27 39 (25)342 Depreciation and amortization(7)(43)(55)(16)(1)(4)(126)2 — (124)Equity income— — — — — (2)(2)— 3 1 Interest income— — — — — 7 7 — — 7 Interest expense— — — — — (69)(69)— — (69)Realized foreign exchange gain (loss)(4)— — — — — (8)(8)— — (8)Adjusted earnings (loss) before income taxes(2)80 46 70 11 38 (101)144 Reclassifications and adjustments above5 19 87 6 3 (3)117 Finance lease income— 1 1 — — — 2 — — 2 Skookumchuk earnings reclass to Equity income(1)— (3)— — — 3 — — — — Asset impairment charges— (4)— 3 — — (1)— — (1)Gain on sale of assets and other(4)— — — — — 2 2 — — 2 Unrealized foreign exchange gain(4)— — — — — 3 3 — — 3 Earnings (loss) before income taxes85 59 158 20 41 (96)267 — — 267 (1) The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.(2) Adjusted EBITDA, adjusted earnings (loss) before income taxes are non-IFRS measures, are not defined, have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers.(3) During the first quarter of 2025, our Adjusted EBITDA composition was amended to exclude the impact of realized gain (loss) on closed exchange positions and Australian interest income.
Cash flow from operating activities totalled $7 million for the three months ended March 31, 2025, compared to $244 million in the same period in 2024, a decrease of $237 million, or 97 per cent, primarily due to: Unfavourable change in non-cash operating working capital balances due to lower accounts payable and accrued liabilities, higher accounts receivable, higher income taxes receivable and higher collateral provided;Lower gross margin due to lower revenues, excluding the effect of unrealized losses from risk management activities, partially offset by lower fuel and purchased power;Higher OM&A due to increased spending on strategic and growth initiatives, the addition of the Heartland facilities and associated corporate costs, the addition of the White Rock and Horizon Hill wind facilities in the first and second quarters of 2024 and higher spending related to the planning and design of an upgrade to our ERP system; andHigher interest expense primarily due to lower capitalized interest resulting from lower construction activity in the first quarter of 2025 compared to 2024; partially offset byLower current income tax expense due to lower earnings before income taxes in the first quarter of 2025 compared to 2024.
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