TransAlta Corporation

Transcription

1 TransAlta Corporation Annual and Special Meeting of Shareholders Friday, April 20,

2 Agenda Welcome Remarks Call to Order Annual Audited Financial Statements & Auditors Report Election of Directors Appointment of Auditors Special Resolution on Reduction of Stated Capital Non-Binding Advisory Resolution on Say on Pay 2

3 TransAlta Annual and Special Meeting of Shareholders Welcome Remarks Ambassador Gordon D. Giffin Chair of the Board 3

4 TransAlta Annual and Special Meeting of Shareholders Call to Order 4

5 TransAlta Annual and Special Meeting of Shareholders Annual Audited Financial Statements and Auditors Report Copies available in the lobby 5

6 TransAlta Annual and Special Meeting of Shareholders Election of Directors 6

7 Board of Directors The Honourable Rona H. Ambrose Alberta, Canada Director since

8 Board of Directors John P. Dielwart Alberta, Canada Director since

9 Board of Directors Timothy W. Faithfull London, United Kingdom Director since

10 Board of Directors Dawn L. Farrell Alberta, Canada Director since 2012 President and CEO 10

11 Board of Directors Alan J. Fohrer California, U.S.A. Director since

12 Board of Directors Yakout Mansour California, U.S.A. Director since

13 Board of Directors Georgia R. Nelson Illinois, U.S.A. Director since

14 Board of Directors Beverlee F. Park British Columbia, Canada Director since

15 Board of Directors Bryan D. Pinney Alberta, Canada Director Nominee 15

16 Board of Directors Ambassador Gordon D. Giffin Georgia, U.S.A. Director since 2002 Chair of the Board 16

17 Board of Directors 17

18 TransAlta Annual and Special Meeting of Shareholders Appointment of Auditors 18

19 TransAlta Annual and Special Meeting of Shareholders Special Resolution on Reduction of Stated Capital 19

20 TransAlta Annual and Special Meeting of Shareholders Non-Binding Advisory Resolution on Say on Pay 20

21 TransAlta Annual and Special Meeting of Shareholders Remarks from the Chair of the Board Ambassador Gordon D. Giffin 21

22 TransAlta Annual and Special Meeting of Shareholders President & Chief Executive Officer s Report Dawn L. Farrell 22

23 Forward Looking Statements This presentation may include forward-looking statements or information (collectively referred to herein as forward-looking statements ) within the meaning of applicable securities legislation. All forward-looking statements are based on the beliefs of TransAlta Corporation (the "Corporation", TransAlta, "we", "us" or "our") as well as assumptions that are based on information that is available to management at the time the assumptions were made and on management s experience and perception of historical trends, current conditions, and expected future developments, as well as other factors deemed appropriate in the circumstances. Forward-looking statements are not facts, but only predictions and generally can be identified by the use of statements that include phrases such as may, will, believe, expect, anticipate, intend, plan, project, foresee, potential, enable, continue, or other comparable terminology. These statements are not guarantees of our future performance and are subject to risks, uncertainties, and other important factors that could cause our actual performance to be materially different from that projected. You are cautioned not to place undue reliance on forward-looking statements as our actual results may differ materially from those expressed or implied. In particular, this presentation contains forward-looking statements pertaining to: our 2018 goals and priorities, including advancing work on the coal to gas conversions, improving safety and environmental metrics, delivering free cash flow growth between 5% and 10%; expansion of customer base; maintaining ownership in TransAlta Renewables; development and construction of the Brazeau Hydro Pumped Storage project; the anticipated benefits of investing in TransAlta, including any anticipated benefits from our diversified portfolio and upside in Alberta, value creation from the coal-to-gas conversions, realizing carbon credits for existing renewables, unique trading and marketing capabilities, growth opportunities and strong balance sheet. The forward-looking information is intended to provide the Corporation's shareholders and potential investors with information about the Corporation and management s assessment of its future plans and operations, and such information may not be appropriate for other purposes. Factors that may adversely impact our forward-looking statements include risks relating to: fluctuations in market prices and the availability of fuel supplies required to generate electricity; our ability to contract our generation for prices that will provide expected returns; failure to obtain necessary regulatory approvals in a timely fashion; legislative or regulatory developments and their impacts; changes to the regulatory framework, including uncertainty related to the anticipated capacity market in Alberta and our ability to effectively participate in such capacity market; any additional environmental requirements and their impacts; changes in general economic conditions, including interest rates; changes to the market conditions; operational risks involving our facilities, including unplanned outages at such facilities; disruptions in the transmission and distribution of electricity; the effects of weather; disruptions in the source of fuels, including natural gas, coal, water, or wind required to operate our facilities; natural or man-made disasters; the threat of domestic terrorism and cyberattacks; equipment failure and our ability to carry out or have completed the repairs in a cost-effective manner or timely manner; commodity risk management; industry risk and competition; fluctuations in the value of foreign currencies and foreign political risks; the need for additional financing; structural subordination of securities; counterparty credit risk; insurance coverage; our provision for income taxes; legal, regulatory, and contractual proceedings involving the Corporation; reliance on key personnel; labour relations matters; development projects and acquisitions, including the coal-to-gas conversions and Brazeau pumped storage project; inability to secure non-recourse or project-level financing on terms favourable to the Corporation or at all; and the satisfactory receipt of applicable regulatory approvals for existing and proposed operations and growth initiatives. The foregoing risk factors, among others, are described in further detail under the heading Risk Factors in our Annual Information Form and in our Management s Discussion and Analysis for the year-ended December 31, Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this document are made only as of the date hereof and we do not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise, except as required by applicable laws. In light of these risks, uncertainties, and assumptions, the forward-looking events might occur to a different extent or at a different time than we have described, or might not occur. We cannot assure that projected results or events will be achieved. This presentation will make reference to certain financial measures, such as free cash flow (FCF), which are not recognized under GAAP. Reconciliations to the most closely related GAAP measures are included in the Corporation's most recently filed Management Discussion and Analysis that is available on the Corporation's website and under the Corporation's profile on 23

24 Executive Team Nipa Chakravarti Chief Transformation Officer Dawn Farrell President and Chief Executive Officer Brett Gellner Chief Investment Officer John Kousinioris Chief Legal & Compliance Officer Dawn de Lima Chief Administrative Officer Donald Tremblay Chief Financial Officer Wayne Collins Executive Vice President, Coal & Mining Jennifer Pierce Senior Vice President, Trading & Marketing Aron Willis Senior Vice President, Gas and Renewables 24

25 Deliver 100% Clean Power Generation by 2025 Objectives 2017 Achievements Strengthen our financial position Reduced net debt by $530 million Free cash flow growth of $90 million since 2015 Expand our renewables platform Advance our coal-to-gas strategy Continue to improve our safety and environmental performance Commissioned South Hedland Expanded Kent Hills wind farm Extended Fort Saskatchewan contract Proposed federal regulations to support conversions Entered into an agreement for natural gas pipeline Advanced plant conversion engineering Improved Injury Frequency Rate Reduced annual GHG emission by ~800,000 tonnes 25

26 Millions 2017 Financial Highlights $350 Free Cash Flow 2017 Cash Flow from Generation (1) $300 $250 $200 $239 $257 $328 Wind / Solar 25% Hydro 7% $150 $100 $50 Gas 43% Coal 25% $ Comparable EBITDA less sustaining capital and other adjustments and excludes Energy Marketing and Corporate Segments During the fourth quarter of 2017, we revised our approach to reporting adjustments to arrive at FFO, mainly to better represent FFO as a cash metric. Previously, FFO was adjusted to include, exclude, or to modify the timing of cash impacts related to adjustments made in arriving at comparable EBITDA. As a result, comparable EBITDA, FFO, and FCF for 2016 and 2015 has been revised accordingly. 26

27 2018 Goals and Priorities 1 Support the development of a fair and equitable capacity market 2 Advance ongoing work on coal to gas conversions 3 Continue to improve our safety and environmental metrics 4 Deliver free cash flow growth between 5% and 10% 5 Continue to pursue our Greenlight initiatives and accretive growth projects Meeting Customer Needs With Low Cost, Reliable, Clean and Firm Power 27

28 Competitive Advantage Growing Cash Flow and Expanding our Customer Base Tailored offerings to a broad customer base Diversified asset base with ability to leverage existing sites Financial strength to support growth Market expertise and insight Ownership in TransAlta Renewables Proficient developer with extensive operational experience 28

29 An Industry in Transition Technological advances continue to reduce the costs of renewables Green and expensive is now green and affordable Compelling economics continue to drive growth in renewables generation Two-thirds of electricity in Canada now comes from renewable energy - The Globe and Mail (May 2, 2017) Renewables threaten power grid stability in the US, energy department claims - Engineering and Technology (August 24, 2017) BUT firm, reliable generation is still required to support intermittent renewables Germany s shift to green power stalls, despite huge investment - New York Times (October 7, 2017) 29

30 Brazeau Hydro Pumped Storage Supports Alberta s Evolution to Clean Energy 30

31 Investing in TransAlta 1 Diversified portfolio with upside in Alberta 2 Significant value creation from coal to gas conversions 3 Carbon credits for existing renewables 4 Unique trading and marketing capabilities 5 Growth opportunities unique to TransAlta 6 Strengthened balance sheet Far More Opportunity Than Risk 31

32 Creative And Committed People Are Leading Our Transition 32

33 Question and Answer 33