Transalta Corporation · TSX:TA
Transalta — Debt Investor Presentation (November 2013)
27 slides from Transalta's debt investor presentation, November 2013
Slide 1: Debt Investor Meetings
A final base shelf prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces of Canada. A copy of the final base shelf prospectus, any amendment to the final base shelf prospect
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements pertaining to the following: the timing and the completion and commissioning of projects under development including major projects and their attendant costs; our estimated spend on matters relating to the recent flo
Slide 3: Agenda
Agenda: • Overview & Strategy • Operations • Growth • Financial Summary • Recap 3
Slide 4: Overview & Strategy
Overview & Strategy 4
Slide 5: TransAlta – Key Messages
TransAlta – Key Messages • ~9,000 MW spanning multiple fuels and Leading Diversified Power markets Generation Company • Over 75 facilities • ~2,200 MW of renewable energy • 100 years of operating history Proven Track Record • Disciplined approach to capital allocation • Highly contracted asset base
Slide 6: Our Business
Our Business Among Canada’s largest publicly traded wholesale power Coal: generator & marketers with over 100 years of operating 4,926 MW 1 experience ~9,000 MWs strategically positioned in Canada, Western U.S. Gas: and Western Australia 1,916 MW 1 2 primary reporting segments Generation
Slide 7: 2013 Business Highlights
2013 Business Highlights Stabilizing cash flows and extending the life of assets through re-contracting Contract extension for 245 MW in Australia (Q4) 20-year contract for 74 MW at Ottawa with Ontario Power Authority (Q3) 24-year contract with Salt River Project in Arizona for 50 MW at Cal En
Slide 8: Track Record of Credit Positive Actions
Track Record of Credit Positive Actions Committed to maintaining investment grade ratings Completed a number of credit positive transactions in the past three years: Common equity and preferred share issuances of ~$1.8 billion Established TransAlta Renewables (Q3 2013) Full proceeds ($220
Slide 9: Operations
Operations 9
Slide 10: Diversified and Highly Contracted Portfolio
Diversified and Highly Contracted Portfolio Diversification supports stable, steady cash flow GEOGRAPHIC DIVERSIFICATION (MW)1 Australia 5% U.S.A. 23% Western Canada Eastern 58% Canada 14% FUEL TYPE DIVERSIFICATION (MW)1 Renewables 24% Coal Gas 55% 21% ¹ Net Capacity Ownership Interest. Includes Tra
Slide 11: Highly Contracted Portfolio with Upside Potential
Highly Contracted Portfolio with Upside Potential Hedge strategy underpins cash flow stability Total Portfolio Contractedness1 MW 90% 83% 78% 77% 2013 Contracted Prices AB ~ $60/ MWh Pac NW ~ $40/ MWh 2014 Contracted Prices AB ~ $55/ MWh Pac NW ~ $45/ MWh ¹ Capacity adjusted volumes. Includes the 14
Slide 12: Environmental Leadership
Environmental Leadership TransAlta is competitively positioned to mitigate emissions costs through early engagement, a portfolio of initiatives and pass through contracts Cost pass through under change-in-law provisions of Alberta PPA’s Pursuit of renewables assets Continuous environmental Emissions
Slide 13: Canadian Federal GHG Emissions Regulations
Canadian Federal GHG Emissions Regulations Canadian Federal regulations were amended to extend the useful life of coal-fired plants to 50 years, from 45 years Weighted average life of TransAlta’s Alberta coal fleet is 19 years under revised regulations, and provide an aggregate additional 43 years o
Slide 14: Historical Power Prices in Alberta
Historical Power Prices in Alberta Since deregulation, AB Pool prices have averaged $65 / MWh Source: AESO 14
Slide 15: Alberta Electricity Market Drivers
Alberta Electricity Market Drivers Steady Load Growth Across Alberta Declining Reserve Margins Alberta continues to see considerable Alberta Interconnected Electric System demand growth due to industrial and mining (AIES) Reserve Margin, 2000-20181 activities and indirect impacts Two decades of
Slide 16: Significant Upside Potential Post Alberta PPA Expiry
Significant Upside Potential Post Alberta PPA Expiry Expiry of the Alberta Coal and Hydro PPAs expected to provide significant EBITDA upside and debt service coverage Indicative EBITDA Estimate for Alberta PPA Assets1,2 Assuming $65/MWh flat historical average Alberta power price $M $1,000 PPA Buyer
Slide 17: Growth
Growth 17
Slide 18: TransAlta's 5-Year Growth Track Record
TransAlta’s 5-Year Growth Track Record Disciplined growth with a focus on contracted assets1 2008 2009 2010 2010 2011 80 MW 694 MW 123 MW 132 MW Kent Hills Canadian Hydro Ardenville / Kent Hills 2 Summerview 2 / Blue Trail 2011 2011 2012 2013 2013 19 MW 450 MW 125 MW 68 MW 144 MW Bone Creek Keephill
Slide 19: Mid-American Strategic Partnerships
Mid-American Strategic Partnerships Strategic partnerships, which build on existing relationship with MidAmerican, the utilities-focused, privately owned subsidiary of Berkshire Hathaway TAMA Power: Partnership will originate and evaluate all Canadian gas fired generation or gas reserve projects,
Slide 20: TransAlta Renewables ("RNW" on the TSX)
TransAlta Renewables (“RNW” on the TSX) 29 6 1,256 $86 renewable power operating megawatts installed million current generation facilities regions generating capacity annual dividend Significant Benefits to TransAlta Corporation Establishes focused and competitive vehicle for pursuing and funding
Slide 21: Funding Growth
Funding Growth TransAlta has access to a number of sources of equity-like capital to fund growth, and will fund in a manner that is consistent with investment grade metrics Internally Generated Cash Flow Increases significantly once the Alberta PPA’s expire Strategic and Financial Partners
Slide 22: Financial Summary
Financial Summary 22
Slide 23: Stable Financial Performance
Stable Financial Performance Results 9 MONTHS 9 MONTHS 2012 2011 2010 (in millions $CAD, except where noted) 2013 2012 Revenues 1,705 1,564 2,262 2,663 2,673 Comparable EBITDA 780 701 1,014 1,045 963 Funds from Operations 550 572 776 809 805 Available Liquidity (billions) 1.0 0.8 0.8 0.9 1.1 Total D
Slide 24: Strong Liquidity & Balance Sheet
Strong Liquidity & Balance Sheet Liquidity at September 30, 2013 $2.1B of Credit Facilities $1.0B Available Liquidity $1.5B $1.0B Available Syndicate $0.3B Letters of Credit $0.6B $0.8B Drawn Bilaterals 2012 & 2013 Capital Markets Transactions Equity: August 2013: $220mm IPO of TransAlta Renewable
Slide 25: Debt Maturity Profile
Debt Maturity Profile Debt Profile1,2,3 $0.9 billion of Canadian debentures $2.0 billion of U.S. Senior Notes $0.4 billion of non-recourse debt Investment grade credit ratings: DBRS: BBB / Stable S&P: BBB- / Stable $800 USD Debt $600 CAD Debt $CAD Millions 520 $400 500 300 $200 400 400 3
Slide 26: Recap
Recap 26
Slide 27: Recap of Investment Highlights
Recap of Investment Highlights Diversified, highly-contracted generation portfolio located in markets with strong fundamentals Extending life and reducing merchant risk of asset base through new contracts Expected significant cash flow upside post-PPA expiry Disciplined growth strategy to fu
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