TransAlta Renewables. Annual Meeting of Shareholders Thursday, May 10, 2018

Transcription

1 TransAlta Renewables Annual Meeting of Shareholders Thursday, May 10,

2 TransAlta Renewables Annual Meeting of Shareholders Welcome Remarks Financial Statements & Auditors report Election of Directors Appointment of the Auditors Update on the Business Questions and Answers 2

3 TransAlta Renewables Annual Meeting of Shareholders Welcome Remarks Allen R. Hagerman Chair of the Board 3

4 TransAlta Renewables Annual Meeting of Shareholders Call to Order 4

5 TransAlta Renewables Annual Meeting of Shareholders Annual Audited Financial Statements and Auditors Report Copies available at the back of the room 5

6 TransAlta Renewables Annual Meeting of Shareholders Election of Directors 6

7 Board of Directors David W. Drinkwater Ontario, Canada Independent Director since

8 Board of Directors Brett M. Gellner Alberta, Canada Non-Independent Director since

9 Board of Directors John H. Kousinioris Alberta, Canada Non-Independent Director since

10 Board of Directors Kathryn B. McQuade Nevada, USA Independent Director since

11 Board of Directors Paul H.E. Taylor British Columbia, Canada Non-Independent Director since

12 Board of Directors Allen R. Hagerman Alberta, Canada Independent Director since 2013 Chair of the Board 12

13 Board of Directors 13

14 TransAlta Renewables Annual Meeting of Shareholders Appointment of Auditors 14

15 TransAlta Renewables Annual Meeting of Shareholders Company Update John Kousinioris President 15

16 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 TransAlta Renewables the ( Corporation ) beliefs as well as assumptions based on information available 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. In particular, this presentation contains forward-looking statements pertaining to, without limitation, the following: the Corporation being able to realize growth through drop-down and third party growth opportunities; the 2018 EBITDA and cash available for distribution outlook for the Corporation; the satisfaction of the closing conditions relative to the acquisition of the 29 MW New Hampshire project; the expected timing for construction and capital cost of the U.S. wind development projects; identified growth opportunities, including potential drop downs from TransAlta Corporation; and strong cost of capital to compete for third party acquisitions. These forward-looking statements are not historical facts but reflect current expectations concerning future plans, actions and results. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to: competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; changes in tax, environmental, and other laws and regulations; and other risks and uncertainties discussed in the Corporation's materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Corporation s MD&A for the year ended December 31, 2017 and 2018 Annual Information Form. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Corporation s expectations only as of the date of this presentation. The purpose of the financial outlooks contained herein is to give the reader information about management's current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. The Corporation disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law This presentation also makes reference to certain financial measures, such as comparable EBITDA, which are not recognized under GAAP. Reconciliations to the most closely related GAAP measures are included in the Corporation's MD&A, which is available on the Corporation's website and under the Corporation's profile on 16

17 Investment Highlights Highly Diversified 38 facilities across multiple regions and spanning various technologies Highly Contracted Portfolio 12 year weighted average contract life Strong Balance Sheet and Access to Competitive Capital Proven Track Record of Growth and Value Creation 2.3x Net Debt/EBITDA Raised over $0.9 billion of low cost project debt, with additional capacity $500 million syndicated credit facility $2.7 billion of acquisitions since IPO 58% Total Shareholder return since IPO Strong Sponsorship from TransAlta Corporation Excellent source of drop-down and third party growth opportunities 17

18 TransAlta Renewables at a Glance Significant Scale Highly Diversified Enterprise Value 1,2 Market Cap. 2 $3.9 Billion $2.9 Billion # of Assets Net MW Percent of Generation Cash Flow 2018 EBITDA (guidance) $400 - $420 Million 2018 CAFD (guidance) $260 - $290 Million Dividend Yield 8.2% TransAlta s Ownership 64% Wind 18 1,248 49% Natural Gas % Hydro % Total 38 2, % Note: EBITDA and CAFD are not defined under IFRS. For further information on non-ifrs financial measures we use, see the section entitled Non-IFRS Measures contained in our Management Discussion andanalysis 1 Enterprise value calculated as: market capitalization + total debt (book value) + non-controlling interests (book value) - cash and cash equivalents. Balance sheet data as at March 31, Based on closing price on the Toronto Stock Exchange as of April 30,

19 Millions Significant Increase in Cash Available For Distribution $300 $284 $260 - $290 $250 $245 $200 $177 $150 $100 $82 $50 $ Outlook Cash Available for Distribution refers to the amount of cash generated from operations after deducting sustaining capital and distributions to non-controlling interests, excluding the effects of timing and working capital on distributions from subsidiaries of TransAlta in which the Company holds an economic interest and less principal repayments of amortizing debt. Outlook based on expected revenues from PPAs and the sale of green attributes. Renewable energy production from wind/hydro assets expected to range from 3,400 to 3,800 GWh including economic interests. Gas-fired generation provides compensation for capacity and production is not a significant indicator of this business. 19

20 Strong Dividend Growth Annualized Dividend Per Share $1.00 $0.80 $0.60 $0.40 $0.75 ~3% Wyoming Wind $0.77 ~9% Australian Assets $0.84 ~5% Three Canadian Projects $0.88 ~7% South Hedland $0.94 $0.20 $0.00 At IPO (Aug 2013) 20

21 Strong Performance Since IPO 60% Share Price Performance Since August 2013 IPO 50% 40% 30% 20% 10% 0% -10% Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 RNW S&P TSX ~$2.7 billion in new assets Significantly increased dividend and public float Added to the S&P/TSX Composite Index in 2016 Completed over $0.9 billion of project level financing 21

22 Proven Growth Track Record MW Wyoming wind acquisition 575 MW Australian Assets investments MW Sarnia gas investment 98 MW Le Nordais wind investment 7 MW Ragged Chute hydro investment MW South Hedland gas 17 MW Kent Hills 3 wind expansion MW Pennsylvania wind acquisition 29 MW New Hampshire wind acquisition $2.7 billion in investments 22

23 US Wind Development Projects 90 MW Pennsylvania project One 15-year PPA Early stage construction underway Capital cost of ~US$160 million 29 MW New Hampshire project Two 20-year PPAs Pending outcome of environmental permit appeal, construction could start in August Capital cost of ~US$80 million All three counterparties have S&P credit ratings of A+ or better Commercial operation date in H2/19 for both projects 23

24 Significant Growth Opportunities Actively Evaluating with TransAlta over $5 billion in Opportunities Greenfield Third-party Acquisitions Near-term: Renewable calls in Alberta and Saskatchewan, and opportunities in Australia and Pacific Northwest Long-term: Over 5,000 MW of additional renewables potential in Western Canada Attractive opportunities in North America Strong cost of capital and balance sheet to compete Proceeds from Solomon can be used to fund growth 800 MW of hydro in Alberta Potential Drop-downs from TransAlta 400 MW of gas in Alberta & Ontario 90 MW wind and solar in Eastern Canada and the U.S. $2.5 billion Alberta Brazeau pumped hydro project 24

25 Question and Answer 25