Transalta Corporation · TSX:TA
Transalta — Shareholder Meeting (April 2014)
40 slides from Transalta's shareholder meeting presentation, Apr 29, 2014
Slide 1: Annual and Special Meeting of Shareholders
TransAlta Corporation Annual and Special Meeting of Shareholders Tuesday, April 29, 2014 Trans{l ta
Slide 2: Welcome Remarks
Welcome Remarks Ambassador Gordon D. Giffin Chair of the Board 2
Slide 3: Call To Order
TransAlta Call To Order
Slide 4: Annual Audited Financial Statements and Auditors' Report
Board of Directors Annual Audited Financial Statements and Auditors’ Report Copies Available in the Lobby 4
Slide 5: Election of Directors
Board of Directors Election of Directors 5
Slide 6: Board of Directors
Board of Directors William D. Anderson Toronto, Ontario Director since 2003 6
Slide 7: Board of Directors
Board of Directors Timothy W. Faithfull Oxford, UK Director since 2003 7
Slide 8: Board of Directors
Board of Directors Dawn L. Farrell Calgary, Alberta Director since 2012 President and CEO 8
Slide 9: Board of Directors
Board of Directors Alan J. Fohrer Arcadia, California Director since 2013 9
Slide 10: Board of Directors
Board of Directors C. Kent Jespersen Calgary, Alberta Director since 2004 10
Slide 11: Board of Directors
Board of Directors Michael M. Kanovsky Calgary, Alberta Director since 2004 11
Slide 12: Board of Directors
Board of Directors Karen E. Maidment Cambridge, Ontario Director since 2010 12
Slide 13: Board of Directors
Board of Directors Yakout Mansour El Dorado Hills, California Director since 2011 13
Slide 14: Board of Directors
Board of Directors Georgia R. Nelson Chicago, Illinois Nominee 14
Slide 15: Board of Directors
Board of Directors Dr. Martha C. Piper Vancouver, British Columbia Director since 2006 15
Slide 16: Board of Directors
Board of Directors Ambassador Gordon D. Giffin Atlanta, Georgia Director since 2002 Chair of the Board 16
Slide 17: Board of Directors
Board of Directors 17
Slide 18: Appointment of Auditors
Board of Directors Appointment of Auditors 18
Slide 19: Confirming Amendments and Restatement of By-law No. 1
Confirming Amendments and Restatement of By-law No. 1 19
Slide 20: Confirming Adoption of Advance Notice By-law No. 2
Confirming Adoption of Advance Notice By-law No. 2 20
Slide 21: Advisory Resolution on Say on Pay
Advisory Resolution on Say on Pay 21
Slide 22: Remarks from the Chair of the Board
TransAlta Remarks from the Chair of the Board Ambassador Gordon D. Giffin 22
Slide 23: President and Chief Executive Officer's Report
TransAlta President Chief Executive Officer’s Report Dawn L. Farrell 23
Slide 24: Forward Looking Statements
Forward Looking Statements This presentation may contain forward looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation in 2014, 2015 and subsequent years. All forward looking statements are based on our beliefs and assumptions
Slide 25: Dawn Farrell, President & CEO, and Leadership Team
Dawn Farrell President & CEO Donald Tremblay Brett Gellner Dawn de Lima John Kousinioris Chief Financial Chief Investment Chief Human Resources Chief Legal & Officer Officer & Communications Compliance Officer Officer Robert (Bob) Emmott Cynthia Johnston Rob Schaefer Gary Woods Chief Engineer Execut
Slide 26: Key Investor Themes
Key Investor Themes Financial Performance Canadian Coal Growth Operations Opportunities Funding Growth & Dividend Credit Rating Alberta Market 26
Slide 27: Growth Track Record
Growth Track Record Disciplined growth with a focus on contracted assets 2008 2009 2010 2010 2011 80 MW 694 MW 123 MW 132 MW 19 MW Kent Hills Canadian Hydro Ardenville / Kent Hills 2 Summerview 2 / Blue Trail Bone Creek 2011 2012 2013 2013 225 MW 125 MW 68 MW 144 MW 150 MW Keephills 3 Solomon New Ri
Slide 28: Metrics Relative to Comparable Companies
Metrics Relative to Comparable Companies TEV/2014E EBITDA 16.0x TA Corp 14.0x TA Renewables Other Companies Attractive Valuation 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x Balance Sheet Strength Competitive Dividend Yield Debt¹/2014E EBITDA Dividend Yield² 10.0x 9% TA Corp TA Corp Previous 9.0x TA Renewab
Slide 29: 2013 Operations in Review
2013 Operations in Review Solid availability, but CDN Coal underperforms 2013 Objectives Results Availability: 89-90% Adjusted availability: Sundance 1&2: deliver 89.7% rebuild Re-started Sun 1 & 2 Safety: IFR < 1.0 Strong safety record; IFR Cost reduction: OM&A, < 1.0 shared service m
Slide 30: 2013 Financial Performance
2013 Financial Performance Consistent financial performance Comparable EBITDA Comparable FFO $M $M $1,100 $1,044 $1,015 $1,023 $900 $812 $788 $1,000 $800 $729 $900 $700 $800 $700 $600 $600 $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $0 $0 2011 2012 2013 2011 2012 2013 30
Slide 31: Canadian Coal Improvements
Canadian Coal Improvements Raising the bar at CDN Coal New leadership with proven experience in similar vintage and type of assets: Substantial cost reductions Management of structural change across entire portfolios in response to very challenging power market conditions Implementation of C
Slide 32: 2014 Q1 Performance Highlights
2014 Q1 Performance Highlights Strong start to 2014 Comparable EBITDA Comparable FFO $M $M $250 $238 $200 $193 $150 $100 $50 $0 Q1 2013 Q1 2014 32
Slide 33: TransAlta Renewables
TransAlta Renewables Brings significant benefits to TransAlta Corporation Establishes focused and competitive vehicle for pursuing and funding growth opportunities in renewable power Provides additional financial flexibility for TransAlta TransAlta retains majority ownership and operator Con
Slide 34: Markets Where We are Positioned to Grow
Markets Where We are Positioned to Grow Alberta Western U.S. GDP growth of 2 – 3% per year ~1.4% annual load growth over next ten years 6,000 MW of new generation by 20221 California: 15,000 MW by 2020 Cogen and combined cycle WECC: 25,000-30,000 MW by 2020 Opportunity for gas-fired ge
Slide 35: Funding Growth
Funding Growth Access to multiple sources of capital to fund growth Internally generated cash Public and Private partnerships / Structures Asset Vend-ins to TransAlta Renewables Asset divestitures Equity Preferred Shares Debt 35
Slide 36: Long-term Upside Potential
Long-term Upside Potential Significant increase in cash flows once Alberta legislated PPAs expire ¹Illustrative representation of estimated average EBITDA over period. Actual EBITDA could vary from those shown due to a number of factors 36
Slide 37: Alberta Market
Alberta Market Alberta remains a great place to invest Since deregulation pool prices have averaged $65/MW Continue to work with the Alberta Government to align provincial and federal environmental regulations Managing formal complaint filed against the MSA Advocating for clarity in rules an
Slide 38: Business Values
Business Values Safety Environmentally Conscious Reliable Operators Culture of Excellence Committed 38
Slide 39: Key Priorities for 2014
Key Priorities for 2014 • Comparable EBITDA of $1,015 - • Complete Coal $1,065 million Action Plan • FFO of $743 - $793 • Deliver consistent million results • Protect investment • Availability of 88 – grade rating 90% • Grow EBITDA by • Sustaining capital of FINANCIAL OPERATIONAL $40 - $60 million $
Slide 40: Questions & Answers
TransAlta Questions & Answers 40