TransAlta Corporation

Transcription

1 TransAlta Corporation First Quarter 2018 Results Tuesday May 8,

2 Forward Looking Statements This presentation includes 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 our beliefs as well as assumptions based on available information 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, can, believe, expect, anticipate, intend, plan, project, forecast, 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 actual results or outcomes to be materially different from those set forth in the forward-looking statements. In particular, this presentation contains forward-looking statements pertaining to: our revised 2018 outlook, including comparable EBITDA, funds from operations, free cash flow and adjusted availability; funding additional growth and returning cash to shareholders over the next three years; ability to benefit from potential price volatility; and our 2018 goals and priorities. The foregoing risk factors, among others, are described in further detail in the Governance and Risk Management section of our Management Discussion and Analysis and under the heading Risk Factors in our Annual Information Form. 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. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect the Corporation's expectations only as of the date of this news release. The purpose of the financial outlooks contained in this presentation 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. 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 at all. We cannot assure readers that projected results or events will be achieved. Certain financial information contained in this presentation, including Comparable EBITDA, FFO and FCF, may not be standard measures defined under International Financial Reporting Standards ( IFRS ) and may not be comparable to similar measures presented by other entities. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. For further information on non-ifrs financial measures we use, see our most recently filed Management's Discussion and Analysis, filed with Canadian securities regulators on and the Securities and Exchange Commission on 2

3 Agenda Q1 Highlights and Revised 2018 Outlook Adjustments to the Quarter Segmented Results Liquidity Capital Structure Power Prices in Alberta 2018 Goals and Priorities Questions and Answers 3

4 Q Highlights and Revised 2018 Outlook 3 Months Ended March 31 (in $CAD millions) Previous 2018 Outlook Revised 2018 Outlook Comparable EBITDA (1) $259 $240 $950 - $1,050 $1,000 - $1,050 FFO (1) $161 $168 $725 - $800 $750 - $800 FCF (1) $81 $79 $275 - $350 $300 - $350 Adjusted Availability (2) 93.9% 88.5% Strong performance across all generating segments Permanently shut down Sundance Unit 1 and mothballed Sundance Unit 2 Entered into an arrangement to acquire two construction ready wind projects Completed early redemption of our per cent US$500 million Senior Notes Purchased and cancelled 374,900 common shares under NCIB (1) Adjusted to exclude the $157 million received during the quarter related to the Sundance B and C termination payment and the OEFC settlement payment received in the first quarter of (2) Adjusted for economic dispatching at U.S. Coal. 4

5 Adjustments to the Quarter Segmented Comparable Cash Flow FFO FCF EBITDA from Generation (in $CAD millions) Reported $416 $274 $318 $202 $238 $96 $398 $249 PPA Termination Payment ($157) - ($157) - ($157) - ($157) - OEFC Settlement - ($34) - ($34) - ($17) - ($34) $259 $240 $161 $168 $81 $79 $241 $215 5

6 Millions Millions Millions Segmented Results $300 First Quarter Segmented EBITDA (1) - Generation $250 $200 $150 $100 $50 $0 Hydro Wind and Solar Australian Gas Canadian Gas U.S. Coal Canadian Coal $250 First Quarter - Segmented Cash Flow From the Business (1) Hydro $100 First Quarter FCF (1) $200 Wind and Solar $80 $150 Australian Gas $60 $100 Canadian Gas $40 $50 $0 U.S. Coal Canadian Coal $20 $ (1) Adjusted to exclude the $157 million received during the quarter related to the Sundance B and C termination payment and the OEFC settlement payment received in the first quarter of

7 Billions Liquidity Areas of Focus Liquidity Execution Liquidity of $1.4B at March 31, 2018 including cash of $329 million Completed early redemption of 2018 Senior Notes (US$500 million) in March using cash and available liquidity under the credit facility Next maturing debt in November 2019 (CAD$400 million) $2.0 (1) $1.5 $1.0 $0.5 $1.5 $1.5 $1.4 $1.4 $1.3 $1.3 $1.4 $1.1 $0.0 Jun 30/16 Sep 30/16 Dec 31/16 Mar 31/17 Jun 30/17 Sep 30/17 Dec 31/17 Mar 31/18 Cash Available Credit Facility for Use Committed Credit Facilities (1) Reduction in committed credit facilities due to reduction in US bilateral credit facility from $300 million to $200 million. Excludes $100 million demand facility available to each TransAlta Corporation and TransAlta Renewables. 7

8 Capital Structure Adjusted FFO/Net Debt expected to be at the high end of our 25 30% range in 2021 ADJUSTED FFO TO NET DEBT 30% Post 2020 Target (25 30%) 25% 20% 2018 to 2020 Target (20 25%) 15% 10% 16.5% 17.6% 17.0% 18.2% 18.2% 19.2% 20.4% 20.9% 5% 0% Q Q Q Q Q Q Q Q Flexibility to fund additional growth or to return cash to shareholders over the next three years 8

9 Alberta Power Price ($/MWh) Power Prices in Alberta $70 $60 $ Outlook Range $40 Capacity Market $30 $20 $10 $0 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Avg. Monthly Price Forward Curve Source: AESO, NGX 9

10 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 10

11 Question and Answer 11