TransAlta Corporation

Ladies and gentlemen, thank you for standing by and welcome to the TransAlta Corporation fourth quarter and full year 2019 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this time, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Chiara Valentini, Manager of Investor Relations. Please go ahead.

Thank you, Amy. Good morning, everyone, and welcome to TransAlto's fourth quarter and year-end conference call. With me today are Don Farrell, President and Chief Executive Officer, Todd Stack, Chief Financial Officer, John Kousinioris, Chief Operating Officer, Brett Gellner, Chief Development Officer, and Carrie O'Reilly Wilkes, Chief Officer, Legal, Regulatory, and External Affairs. Today's call is webcast, and I invite those listening on the phones to view the supporting slides that are also posted on our website. A replay of the call will be available later today, and the transcript will be posted to our site shortly thereafter. As usual, all of the information provided during this conference call is subject to the forward-looking statement qualification set out on slide 2 here, detailed in our MD&A and also incorporated in full for the purposes of today's call. All amounts referenced during the call are in Canadian currency, unless otherwise stated. The non-IFRS terminology used, including comparable EBITDA, funds from operations, free cash flow, and deconsolidated FFO, are also reconciled in the MD&A for your reference. On today's call, Dawn and Todd will provide an overview of the past year and expectations for 2020. After these prepared remarks, we will open the call for questions. With that, let me now turn the call over to Dawn.

Thanks, Kiera, and welcome everyone to the call. Today, as Kiera said, I'm going to make a few comments on our key accomplishments in 2019, and then I'll turn it over to Todd, who will take you through the details of our financial results. We are off to a great start on our objectives for 2020. and we're going to leave plenty of room at the end of the call for questions on both 2019 and our expectations for 2020 and beyond. So in 2019, financially we did deliver $379 million of free cash flow, which is above our expectations coming into the year and above our results in 2018. We also recovered an additional $56 million in cash from the Sundance PPAs that were terminated in 2018. So when you take those two numbers together, we delivered 435 million of total free cash flow in 2019, which was a great result for this company. The operations in our company delivered strong availability, averaging over 90% for the year, so congratulations to them for a great year. And importantly, we delivered significant reductions in our OM&A, which now has a run rate that is 8% below our 2018 levels. and of course this work came as a result of all the hard work by the TransAlta teams across the company. We did return 68 million of capital to our shareholders through our share buyback program and we ended the year with liquidity of 1.7 billion. And then finally in January we decided to increase the dividend by 6.25%. So a very strong operational and financial year which the company is very proud of. On strategy, we advanced our Clean Energy Investment Plan that we announced last September. We are on track to deliver our first coal-to-gas conversion at the Sundance Unit 6 this year. And we are on course to complete our conversions for Keep Hills Units 2 and 3 by the first half of 2021. We've advanced our Sundance 5 repowering project. The two Siemens turbines acquired in Q4 will be used at the site. Permitting is underway and we now have Shell Energy North American as a key customer at that project. We are continuing to permit a hybrid combined cycle plant at QPLC Unit 1. As many of you know, Pioneer Pipeline was commissioned early thanks to the hard work of the Tidewater team and contributed to cost reductions and margin increases in our coal fleet in 2019. Big Level and Antrium were finished in December, and we welcomed them into our fleet, and they're now fully producing cash flows for all of 2020. And we're pleased to welcome Microsoft, Partners Healthcare, and New Hampshire Electric as new customers to TransAlta. We executed an agreement with SEMCAMS Midstream to construct and operate their new cogeneration facility at KBOB. and detailed construction activities have now commenced and COD is targeted for mid-2021. We significantly advanced our windrise project and we were excited to receive AUC approval ahead of schedule and we continue to target a 2021 COD date for that project. And we are in the final stages of building a world-class battery at our Summerview wind site that will be completed later this year. The Skookumchuck wind site is under construction and will be completed later this year. And of course, we have an option to buy 49% of that project at COD once it's completed. And finally, at the very end of the year, we acquired a development portfolio of seven wind sites across the U.S. that our team is working on for the corporate PPA market that is expanding in the U.S. Turning to our goals on ESG, I'm proud to say that this was our fifth year of voluntary integrated reporting. We continue to drive industry-leading sustainability practices, and I'm proud of the work that we advanced in 2019, especially the work that we did at the end of the year to set new goals for our ESG targets. We reduced our carbon emissions in 2019 by over 200,000 tons compared to 2018, thanks in part to our early integration of the Pioneer pipeline. And of course, safety is a key corporate value. and it's critical to all of us here that our employees go home safe and to their families every day. 2019 was a tremendous result by all the teams across TransAlta. Our total injury frequency declined to 1.12 which was a 40% improvement relative to 2018 and our third straight year of improved performance. So it was a very, very strong year on many fronts. And with that, I will turn it over to Todd so he can go into details on the financial results.