Slide 1: TransAlta Corporation First Quarter 2020 Results
TransAlta Corporation First Quarter 2020 Results May 12, 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 Q1 Highlights and Advancements
2020 Q1 Highlights and Advancements Solid Q1 Results • Solid first quarter financial results and reaffirming 2020 FCF outlook • Free cash flow of $109 million or $0.39 per share, up 18% to prior year quarter • Fleet availability of 92.8% • Total Injury Frequency (TIF) of 1.18 for the quarter (1.94 f
Slide 4: Key Strategic Priorities - 2020
Key Strategic Priorities - 2020 Successfully execute conversion strategy Deliver on announced renewables growth Advance and expand our on-site generation business Increase our presence in the US renewables market Maintain a strong financial position Keeping TransAlta People protected and resilient u
Slide 5: First Quarter 2020 Financial Highlights
First Quarter 2020 Financial Highlights Comparable EBITDA FFO FCF ($ millions) ($ millions) ($ millions) $221 $220 $109 $169 $172 $95 2019 2020 2019 2020 2019 2020 • Strength of our operations, contractedness and diverse portfolio • Strong cash flow generation • Free cash flow per share increased 18
Slide 6: Alberta Electricity Prices
Alberta Electricity Prices ALBERTA POOL PRICE AND FORWARD CURVE ($/MWH) $80 $70 $69 $67 $60 $52 $49 $50 $/MWh $40 $30 $20 $10 $- Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Bal 2021 2020 • Cold weather in January positively impacted Q1 power prices • Q2 and balance of year are likely to be
Slide 7: Segmented Cash Flow
Segmented Cash Flow FIRST QUARTER SEGMENTED CASH FLOWS ($MILLIONS) Q1 2020 Q1 2019 Canadian Coal 22 41 US Coal 28 (12) Canadian Gas 29 24 Australian Gas 28 30 Wind and Solar 72 66 Hydro 23 24 Generation segmented cash flow 202 173 Energy Marketing 18 24 Corporate (22) (24) Total return swap (11) 13
Slide 8: Liquidity and Capital Allocation
Liquidity and Capital Allocation LIQUIDITY POSITION ($BILLIONS) $1.75 $0.3 $0.3 $1.50 $0.4 $0.2 $1.25 $0.3 $0.1 $0.1 $1.00 $0.1 $0.1 $0.75 $1.4 $1.3 $1.4 $1.3 $1.2 $0.50 $1.1 $1.1 $0.9 $0.9 $0.25 $0.00 Mar 31/18 Jun 30/18 Sep 30/18 Dec 31/18 Mar 31/19 Jun 30/19 Sep 30/19 Dec 31/19 Mar 31/20 Cash Ava
Slide 9: Capital Structure – Recourse Debt
Capital Structure – Recourse Debt TRANSALTA SENIOR RECOURSE DEBT (1) ($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 10: Highly Diversified Asset Base
Highly Diversified Asset Base 2020 CONTRACTED/MERCHANT EBITDA ALBERTA HEDGE POSITION (BOY 2020) Bal 2020 AB Thermal Baseload Merchant 5-10% Merchant Generation 74% Hedged(1) Hedged Price $52 ($/MWh)(1) Long-term contracts, $1/MWh EBITDA sensitivity +/-$3.5 hedges and first quarter ($ Millions) resul
Slide 11: COVID-19 Response
COVID-19 Response ⚫ Initiated business continuity plan in early March ▪ Remote working arrangements ▪ Travel bans Employees and ▪ Health screening ▪ Revised schedules Contractors ▪ Enhanced cleaning arrangements ▪ Contingent work teams ⚫ Implemented virtual healthcare program ⚫ Ensured facilities re
Slide 12: Growth Projects Underway
Growth Projects Underway Capital Invested5 Expected Expected Projects Owned MW (CAD$ millions) Returns COD 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 13: Progress on 2020 Objectives
Progress on 2020 Objectives Cash flow & • Guidance FCF range of $325 - $375 million • Repay the $400 million bond maturing in November 2020 Capital • $400 million Brookfield financing to be received in Q4 Allocation • Share buyback opportunities continue through 2020 and 2021 Advanced • Complete Sun
Slide 14: Questions and Answers
TransAlta Powering Economies and Communities