Slide 1: TransAlta Corporation Second Quarter 2020 Results
TransAlta Corporation Second Quarter 2020 Results July 31, 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: 2020 Q2 Highlights and Advancements
2020 Q2 Highlights and Advancements Solid Q2 Results • Solid second quarter financial results • Free cash flow of $91 million or $0.33 per share, up 94% to prior year quarter • Fleet availability of 90.7% • Total Injury Frequency (TIF) of 1.40 • Excellent operations and business continuity under con
Slide 4: Key Strategic Priorities - 2020
Key Strategic Priorities - 2020 Successfully execute conversion strategy Deliver on announced renewables growth Advance and expand our on-site generation business Increase our presence in the US renewables market Maintain a strong financial position Keeping TransAlta People protected and resilient u
Slide 5: Growth Projects Underway
Growth Projects Underway Capital Expected Expected Projects Owned MW Investment5 Returns COD (CAD$ millions) Skookumchuck Wind1 67 $150 - $160 High single digit H2 2020 Windrise Wind 207 $270 - $285 High single digit H2 2021 WindCharger Battery2 10 $7 - $8 Low/Mid teens H2 2020 Kaybob Cogen3 40 $105
Slide 6: Second Quarter 2020 Financial Highlights
Second Quarter 2020 Financial Highlights • Strength of our operations, contractedness and diverse portfolio • Strong cash flow generation despite weaker merchant markets • Free cash flow per share increased 94% compared to 2019 6
Slide 7: Alberta Electricity Prices
Alberta Electricity Prices ALBERTA POOL PRICE AND FORWARD CURVE ($/MWH) • Price decline in Q2 and balance of year due to impact of COVID-19 and reduced oil activity in Alberta • Weaker prices also impacted by higher wind and water resources in quarter • Anticipate moderated recovery as economies reo
Slide 8: Segmented Cash Flow
Segmented Cash Flow SECOND QTR SEGMENTED CASH FLOWS ($MILLIONS) Q2 2020 Q2 2019 Canadian Coal 21 19 US Coal 20 11 NA Gas 25 24 Australian Gas 29 29 Wind and Solar 57 39 Hydro 27 32 Generation segmented cash flow 179 154 Energy Marketing 30 20 Corporate (21) (26) Total return swap 3 (4) Total segment
Slide 9: Liquidity and Capital Allocation
Liquidity and Capital Allocation LIQUIDITY POSITION ($BILLIONS) • Access to $1.6 billion in liquidity including ~$250 million in cash • Significant liquidity and unencumbered assets to support growth strategy • Dividend remains sustainable with opportunistic allocation of capital to share buybacks 9
Slide 10: Capital Structure – Recourse Debt
Capital Structure – Recourse Debt TRANSALTA SENIOR RECOURSE DEBT (1) ($BILLIONS) $3.5 $3.0 $2.5 $2.0 $1.5 $1.2 billion recourse debt $1.0 target $0.5 $0.0 2015 2016 2017 2018 2019 2020E • Repositioned balance sheet to the size for operating in a merchant environment • Consistent reduction in corpora
Slide 11: Highly Diversified Asset Base
Highly Diversified Asset Base 2020 CONTRACTED/MERCHANT EBITDA ALBERTA HEDGE POSITION (BOY 2020) AB Thermal Baseload Merchant Generation 75% Hedged(1) Hedged Price $53 ($/MWh)(1) $1/MWh EBITDA sensitivity +/- $2 ($ Millions) Balance of Year Forward Price $51 ($/MWh)(1) • Approximately 90 to 95% of 20
Slide 12: Questions and Answers
TransAlta Powering Economies and Communities