Slide 1: Fourth Quarter and Full Year 2017 Results
TransAlta Corporation Fourth Quarter and Full Year 2017 Results Friday, March 2, 2018 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 2017 Highlights and Priorities Segmented Results Liquidity Capital Structure Capital Allocation Growth in FCF Portfolio Management Priorities for 2018 Questions and Answers 3
Slide 4: 2017 Highlights and Priorities
2017 Highlights and Priorities 3 Months Ended Year Ended December 31 December 31 (in $CAD millions) 2017 2016 2017 2016 Comparable EBITDA $275 $294(1,2) $1,062 $1,064(1,2) FFO $219 $200(2) $804 $734(2) FCF $101 $62(2) $328 $257(2) Adjusted Availability(3) 88.4% 88.9% 86.8% 89.2% Advance the framewor
Slide 5: Segmented Results
Segmented Results Full Year 2017 Segmented EBITDA - Generation $1,200 $1,000 Hydro Wind and Solar $800 Millions Australian Gas $600 Canadian Gas $400 U.S. Coal $200 Canadian Coal (1) $0 2015 2016 2017 Full Year 2017 - Segmented Cash Flow From the Full Year 2017 - FCF Business $350 $800 Hydro $300 Wi
Slide 6: Liquidity
Liquidity Areas of Focus Execution • Liquidity of $1.6B at December 31, 2017 including cash of $314 million • Repayment of US$400 million senior note using existing cash on the balance sheet Liquidity • Early redemption 2018 senior notes (US$500 million) in March 2018 using liquidity • Next maturing
Slide 7: Capital Structure – On Solid Ground
Capital Structure – On Solid Ground Adjusted FFO/Net Debt expected to be at the high end of our 25 – 30% range in 2021 ADJUSTED FFO TO NET DEBT 30.0% Post 2020 Target (25 – 30%) 25.0% 2018 to 2020 Target (20 – 25%) 20.4% 20.0% 16.3% 15.0% 14.3% 10.0% 5.0% 0.0% 2015 2016 2017 Flexibility to fund ad
Slide 8: Capital Allocation - 2018 to 2020
Capital Allocation - 2018 to 2020 SOURCES & USES ($ BILLION) $0.4 Existing Liquidity $0.2 Drop down to RNW Bond Repayment $1.4 $0.3 Off-Coal Monetization FCF including payment for Amortizing Debt $0.3 $1.2 Alberta PPA termination Dividend $0.1 Growth $0.3 Uses Sources Prudent allocation of capital –
Slide 9: Free Cash Flow Outlook
Free Cash Flow Outlook FREE CASH FLOW BUILD-UP ($ MILLION) $600 $500 Int. Exp. Reduction Sundance B/C Solomon Termination Payment Alberta Market $400 Optimization Sundance A Greenlight & Other Sundance B/C $328 South Hedland Coal Cost $275 - $350 $300 $200 $100 $0 2017 2018E More upside through addi
Slide 10: Portfolio Management Strategy - Alberta
Portfolio Management Strategy - Alberta POSITION (MW) Q1 Q2-Q4 2018 2018 2019 2020 3,500 Percentage 91% 61% 55% 45% Contracted (1) Potential 3,000 open positions Forward Price 38 62 57 47 ($/MWh) Hedges Hedged Price 2,500 47 49 51 49 Long-term ($/MWh) contracts 2,000 Sundance 1,500 PPA Strategic shi
Slide 11: 2018 Priorities and Goals
2018 Priorities and Goals 1 Support the development of an effective and investable capacity market 2 Construct the Tidewater pipeline 3 Complete engineering and announce the first two plants for conversion 4 Close and develop the two US wind projects at TransAlta Renewables 5 Deliver on fi
Slide 12: Question and Answer
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