TransAlta Renewables Inc. Peters & Co. Limited Energy Conference September 14, 2017 1
Forward Looking Statements This presentation may include forward- looking statements or information (collectively referred to herein as “forward -looking sta tements”) within the meaning of applicable securities legislation. All forward- looking statements are based on TransAlta Renewables Inc.’s (the “Company”) belie fs as well as assumptions based on information available at the time the assumptions were made and on management’s experience and perception of historical tr ends, 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”, “an tic ipate”, “intend”, “plan”, “project”, “foresee”, “potential”, “enable”, “continue”, or other comparable terminology. These statements are not guarantees of the Com pan y’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: guidance on 2017 earnings, before interest, depreciation and amortization (“EBITDA”) and 2017 cash available for distribution; the Kent Hills expansion, including the costs and timing of completion; the ability for Kent Hills wind farm to support $240 million to $275 million in project financing; the continued support and commitment of TransAlta Corporation; realizing drivers of future growth, including as it pertains to government policies and regulations, customer requirements and diversified system; the Compa ny’s strategic focus and sources of capital, including the amount of internally generated cash flow; development of potential wind and solar projects; and the Brazeau pumped hydro opportunity, including the size, cost and timing 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. 2
TransAlta Renewables at a Glance Significant Scale Highly Diversified Enterprise Value 1,2 $4.6 Billion Percent of # of Net Generation Market Cap. 2 $3.6 Billion Assets MW Cash Flow 2017 EBITDA (guidance) $425 - 450 Million Wind 18 1,248 46% 2017 CAFD (guidance) $235 - $260 Million Natural Gas 8 1,081 50% Dividend Yield 6.6% Hydro 13 112 4% TransAlta’s Ownership 64% Total 40 2,441 100% 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 June 30, 2017 3 2 Based on closing price on the Toronto Stock Exchange as of August 15, 2017
Investment Highlights Highly Diversified 40 facilities across multiple regions and spanning various technologies Highly Contracted Portfolio 12 year weighted average contract life Strong Balance Sheet and 2.4x Debt/EBITDA access to competitive capital Raised $646 million of low cost project debt, with additional capacity Proven track record of growth $2.4 billion of acquisitions since IPO and valuation creation 80% Total Shareholder Return since IPO Strong sponsorship from Excellent source of drop-down and third TransAlta Corporation party growth opportunities 4
Highly Contracted Facilities Pingston, BC Southern Cross, WA McBride Lake, AB Average contract Sarnia, ON Upper Mamquam, BC life of ~12 years, Parkeston, WA Misema, ON based on weighted Melancthon, ON Castle River, AB capacity Wyoming Wind, WY Solomon, WA Ragged Chute, ON Wolfe Island, ON Moose Rapids, ON Appleton, ON Galetta, ON Bone Creek, BC Sinnott, AB Cowley North, AB St. Mary, AB Waterton, AB Belly River, AB Taylor, AB New Richmond, QC Le Nordais, QC Macleod Flats, AB Soderglen, AB Blue Trail, AB Ardenville, AB Summerview 2, AB Summerview 1, AB Kent Hills, NB South Hedland, WA Akolkolex, BC 0 5 10 15 20 25 30 Remaining Contracted Years 5
Significant Increase in Cash Available For Distribution $300 $260 $245 $250 $200 $177 Millions $150 $100 $82 $50 $0 2014 2015 2016 2017 Outlook 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. 6
Strong Performance Since IPO Share Price Performance Since Aug, 2013 60% • ~$2.4 billion in new assets 50% • Significantly increased dividend 40% and public float • Added to the S&P/TSX 30% Composite Index in 2016 20% • Completed ~$600 million of project level financing 10% 0% -10% Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 RNW S&P TSX 7
Strong Dividend Growth Annual Dividend Per Share $1.00 $0.94 $0.88 $0.80 $0.84 $0.77 $0.75 ~7% South ~5% $0.60 Hedland Three ~9% Canadian ~3% Australian Projects Wyoming Assets $0.40 Wind $0.20 $0.00 At IPO 2014 2015 2016 2017 (Aug 2013) 8
Attractive Dividend Yield Dividend Yield RNW Peers² Average (~5.1%) 0% 2% 4% 6% 8% 1 Based on the closing price as of August 15, 2017. 2 Other companies include Algonquin Power, Brookfield Renewables, Enbridge Income Fund, Innergex, Northland Power, NRG Yield, NextEra Energy Partners, Pattern Energy. 3 Assumes reinvestment of all dividends Source: FactSet 9
Proven Growth Track Record 2014 144 MW Wyoming wind acquisition 575 MW Australian Assets investment 2015 506 MW Sarnia gas investment 98 MW Le Nordais wind investment 7 MW Ragged Cute hydro investment 2017 150 MW South Hedland gas 17 MW Kent Hills 3 wind expansion $2.4 billion in investments 10 10
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