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Investor Presentation January 2018 - TransAlta Renewables ... Renewable energy production from wind/hydro

Jul 15, 2020

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  • 11

    TransAlta Renewables Inc.

    Investor Presentation

    January 2018

  • 22

    This presentation may include 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 TransAlta Renewables Inc.’s (the “Company”) beliefs as well as assumptions based

    on information available at the time the assumptions were made and on management’s experience and perception of historical trends, current conditions, and

    expected future developments, as well as other factors deemed appropriate in the circumstances. Forward-looking statements are not facts, but only predictions

    and generally can be identified by the use of statements that include phrases such as “may”, “will”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “project”,

    “foresee”, “potential”, “enable”, “continue”, or other comparable terminology. These statements are not guarantees of the Company’s future performance and are

    subject to risks, uncertainties, and other important factors that could cause our actual performance to be materially different from that projected. In particular, this

    presentation contains forward-looking statements pertaining to, without limitation, the following: ability to realize drop-downs and third party growth opportunities;

    the continued support and sponsorship of TransAlta Corporation; the cash outlook for 2017; the Kent Hills expansion, including the costs and timing of

    completion; the forecasted government policies and regulations, competitiveness, customer requirements and diversified system expected to contribute to future

    growth and the Company’s ability to benefit from such factors; the Company’s strategic focus and potential sources of capital; the Company’s ability to develop

    and construct the identified Canadian wind and Australian solar projects and the capital costs associated with such projects, including Garden Plains Wind,

    Cowley Ridge Wind Repower, Antelope Coulee Wind and Goonumbla Solar Farm; and the development and construction of Brazeau Energy Storage, including

    the size, timing and costs thereof.

    These forward-looking statements are not historical facts but reflect current expectations concerning future plans, actions and results. These statements are

    subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not

    limited to: changes in tax, environmental, and other laws and regulations; the regulatory and political environments in the jurisdictions in which we operate;

    adverse regulatory developments, including unanticipated impacts on existing generation; environmental requirements and changes in, or liabilities under, these

    requirements; changes in general economic conditions including interest rates; operational risks involving our facilities, including unplanned outages at such

    facilities; disruptions in the transmission and distribution of electricity; disputes with counterparties, including as it pertains to the commercial operation at South

    Hedland; the effects of weather; disruptions in the source of fuels, water, or wind required to operate our facilities; risks pertaining to our relationship with

    TransAlta Corporation; competitive factors in the power industry; operational breakdowns, failures, or other disruptions; changes in economic and market

    conditions; potential delay in construction and commissioning of the Kent Hills expansion; and other risks and uncertainties discussed in the Company's

    materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and the Annual Information

    Form for the year ended December 31, 2016. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the

    Company's expectations only as of the date of this presentation. The purpose of the financial outlooks contained herein is to give the reader information about

    management's current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. The Company

    disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise,

    except as required by law.

    The Company evaluates its performance and the performance of our business segments using a variety of measures. Certain of the financial measures

    discussed in this presentation are not defined under International Financial Reporting Standards (IFRS) and, therefore, should not be considered in isolation or

    as an alternative to IFRS measures when assessing the financial performance or liquidity of the Company. These non-IFRS measures may not be comparable to

    similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Refer

    to the Company’s MD&A, which is available on the Company’s website or under the Company’s profile on www.sedar.com for further discussion of these Items,

    including, where applicable, reconciliations to measures calculated in accordance with IFRS.

    Unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

    Forward Looking Statements

    http://www.sedar.com/

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    TransAlta Renewables at a Glance

    Note: EBITDA and CAFD are not defined under IFRS. For further information on non-IFRS financial measures we use, see the section entitled “Non-IFRS Measures” contained in our Management

    Discussion and Analysis 1 Enterprise value calculated as: market capitalization + total debt (book value) + non-controlling interests (book value) - cash and cash equivalents. Balance sheet data as at September 30, 2017

    and includes Solomon proceeds 2 Based on closing price on the Toronto Stock Exchange as of January 4, 2018

    Enterprise Value1,2 $4.1 Billion

    Market Cap.2 $3.3 Billion

    2017 EBITDA (guidance) $425 - 450 Million

    2017 CAFD (guidance) $235 - $260 Million

    Dividend Yield 7.1%

    TransAlta’s Ownership 64%

    # of

    Assets

    Net

    MW

    Percent of

    Generation

    Cash Flow

    Wind 18 1,248 49%

    Natural Gas 7 956 47%

    Hydro 13 112 4%

    Total 38 2,316 100%

    Significant Scale Highly Diversified

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    Investment Highlights

     38 facilities across multiple regions and spanning

    various technologies Highly Diversified

     12 year weighted average contract life Highly Contracted

    Portfolio

     1.7x Net Debt/EBITDA

     Raised over $0.9 billion of low cost project debt, with

    additional capacity

    Strong Balance Sheet

    and Access to

    Competitive Capital

     $2.4 billion of acquisitions since IPO

     ~80% Total Shareholder return since IPO

    Proven Track Record of

    Growth and Value

    Creation

     Excellent source of drop-down and third party growth

    opportunities

    Strong Sponsorship

    from TransAlta

    Corporation

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    Highly Contracted Facilities

    Akolkolex, BC South Hedland, WA

    Kent Hills, NB Summerview 1, AB Summerview 2, AB

    Ardenville, AB Blue Trail, AB

    Soderglen, AB Macleod Flats, AB

    Le Nordais, QC New Richmond, QC

    Taylor, AB Belly River, AB

    Waterton, AB St. Mary, AB

    Cowley North, AB Sinnott, AB

    Bone Creek, BC Galetta, ON

    Appleton, ON Moose Rapids, ON

    Wolfe Island, ON Ragged Chute, ON

    Wyoming Wind, WY Castle River, AB Melancthon, ON

    Misema, ON Parkeston, WA

    Upper Mamquam, BC Sarnia, ON

    McBride Lake, AB Southern Cross, WA

    Pingston, BC

    0 5 10 15 20 25 30

    Remaining Contracted Years

    Average capacity

    weighted contract life of

    ~12 years

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    Significant Increase in Cash Available For Distribution

    Cash Available for Distribution refers to the amount of cash generated from operations after deducting sustaining capital and distributions to non-controlling interests, excluding the effects of timing and working capital on distributions from subsidiaries of TransAlta in which

    the Company holds an economic interest and less principal repayments of amortizing debt. Outlook based on expected revenues from PPAs and the sale of green attributes. Renewable energy production from wind/hydro assets expected to range from 3,500 to 3,900

    GWh including economic interests. Gas-fired generation provides compensation for capacity and production is not a significant indicator of this business.

    $82

    $177

    $245

    $235 - $260

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    2014 2015 2016 2017 Outlook

    M il

    li o

    n s

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    Strong Performance Since IPO

    • ~$2.4 billion in new assets

    • Significantly increased dividend and public float

    • Added to the S&P/TSX Composite Index in 2016

    • Completed over $0.9 billion of project level financing

    -10%

    0%

    10%

    20%

    30%