Slide 1: TransAlta Corporation Fourth Quarter and Full Year 2019 Results
TransAlta Corporation Fourth Quarter and Full Year 2019 Results March 4, 2020 1
Slide 2: Forward Looking Statements
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 ba
Slide 3: Agenda
Agenda CEO Update 2019 Key Accomplishments Financial Results and Updates 2020 Objectives Questions and Answers 3
Slide 4: 2019 Key Accomplishments & Advancements
2019 Key Accomplishments & Advancements Strong Financial Results ✓ Record Free Cash Flow of $379 million(1) or $1.34 per share(1) ✓ Awarded $56 million of additional PPA payments from Balancing Pool ✓ High fleet availability of 90.0% ✓ Reduced OM&A by $40 million or 8% compared to 2018 Prudent Capit
Slide 5: 2019 Key Accomplishments & Advancements
2019 Key Accomplishments & Advancements Renewables & On-site Growth ✓ Commissioned 119 MW of contracted wind generation ✓ Entered into a contract to build 40 MW of cogeneration ✓ Received AUC approval for Windrise ahead of schedule ✓ Final stages of developing WindCharger ✓ Agreement to acquire 49%
Slide 6: Alberta Electricity Prices
Alberta Electricity Prices ALBERTA POOL PRICE AND FORWARD CURVE ($/MWH) $80 $70 $60 $56 2019 Avg. $54 2018 Avg. $50 $/MWh $40 $30 $20 $10 $- Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Bal 2020 2021 Notes: Forward curve as at March 3, 2020. 6
Slide 7: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights Comparable EBITDA FFO FCF ($ millions) ($ millions) ($ millions) $265 $243 $217 $189 $121 $98 2018 2019 2018 2019 2018 2019 FOURTH QUARTER 2019 EBITDA ($MILLIONS) 7
Slide 8: Full Year 2019 Highlights
Full Year 2019 Highlights PPA Termination Payment Comparable EBITDA FFO FCF ($ millions) ($ millions) ($ millions) $1,161 $984 $927 $1,004 $928 $757 $770 $701 $524 $435 $367 $379 2018 2019 2018 2019 2018 2019 FULL YEAR 2019 ADJUSTED EBITDA ($MILLIONS) 8
Slide 9: EBITDA Generated by Canadian Coal
EBITDA Generated by Canadian Coal ⚫ Comparable EBITDA increased due to: ⚫ Efficient and economic operations of facilities ⚫ Increased co-firing with natural gas resulting in lower fuel costs ⚫ Cost reductions implemented over the past few years resulting in lower OM&A FULL YEAR 2019 CANADIAN COAL EB
Slide 10: Financial Focus and Capital Allocation
Financial Focus and Capital Allocation Deconsolidated FFO 25 – 35% 6 – 8% 8 – 10% 10 – 15% 30 – 50% Sustaining & • Clean energy Preferred Share Common Share investments Productivity Amortizing Debt • Debt Reduction Dividends Dividends Capital² • Share Buyback New dividend policy • Capital allocation
Slide 11: 2020 Objectives
2020 Objectives Cash flow & • Guidance FCF range of $325 - $375 million Capital • Repay the $400 million bond maturing in November 2020 Allocation • Continue share buyback program in an amount of $80 million Advanced • Complete Sundance Unit 6 conversion in 2020 Conversion to • Advance the Sundance
Slide 12: Questions and Answers
TransAlta Powering Economies and Communities