Transalta Corporation · TSX:TA
Transalta — Q2 2009 Earnings Presentation
20 slides from Transalta's earnings presentation, 2009
Slide 1: TransAlta 2009 Second Quarter Results
TransAlta 2009 Second Quarter Results 2009 Second Quarter Results powering on 1
Slide 2: 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. All forward-looking statements are based on our beliefs and assumptions based on information available at t
Slide 3: Outline
Outline Second Quarter Results Performance Against Key Measures 2009 Outlook 3
Slide 4: Q2 2009 – Higher planned maintenance at Alberta Thermal and reduced water levels at hydro lower results
Q2 2009 – Higher planned maintenance at Alberta Thermal and reduced water levels at hydro lower results Comparable loss per share of $0.03 versus comparable earnings of $0.25 in Q2 2008 Affected by accelerated major maintenance, Centralia boiler modifications, increased related major maintenance
Slide 5: Alberta Thermal: Majority of major maintenance work completed; lower unplanned outage rate evident
Alberta Thermal: Accelerated major maintenance plans expected to greatly improve second half of 2009 and 2010 availability Majority of major maintenance work completed; lower unplanned outage rate already evident 2009 Availability 2008 Maintenance in 2nd half 2008 improved 90% Est. 87 - 89% perfor
Slide 6: Q2 2009 - Results
Q2 2009 - Results Results (MM) Q2 2009 Q2 2008 YTD YTD Q2’09 Q2’08 Revenue $585 $708 $1,341 $1,511 Gross margin $346 $376 $727 $809 Operating income $14 $93 $99 $282 Comparable (loss) earnings $(6) $49 $31 $148 Net Earnings $(6) $47 $36 $80 Comparable (loss) earnings per share $(0.03) $0.25 $0.16 $0
Slide 7: Q2 2009 - Comparable earnings
Q2 2009 - Comparable earnings Results (MM) Q2 2009 Q2 2008 YTD YTD Q2’09 Q2’08 Net (loss) earnings $(6) $47 $36 $80 Sale of assets at Centralia, net of tax - - - (4) Change in life of Centralia parts, net of tax - 2 1 7 Settlement of commercial issue, net of tax - - (6) - Writedown of Mexican invest
Slide 8: Q2 2009 – Net earnings
Q2 2009 – Net earnings Q2 2009 YTD Q2’09 Net earnings, 2008 $47 $80 Decrease in Generation gross margins (23) (73) Mark-to-market movements - Generation 23 21 Decrease in COD gross margins (30) (30) Increase in operations, maintenance, and admin (29) (68) costs Increase in depreciation expense (18)
Slide 9: Q2 2009 – Significant events
Q2 2009 – Significant events Ardenville Wind Power Project April 28, announced plans to design, build, and operate Ardenville, a 69 MW wind project with a capital cost of $135 million Chief Operating Officer April 28, appointment of Dawn Farrell to the position of COO NCIB May 6, renewal of NC
Slide 10: Q2 2009 – Balance sheet ratios remain strong
Q2 2009 – Balance sheet ratios remain strong Credit Ratios Threshold Q2’09 2008 Cash flow to interest* Min 4x 5.9x 7.2x Cash flow to total debt* Min 25% 24.7% 31.1% Debt to total capital Max 55% 49.4% 48.1% 1. Debt = short term + long-term debt – cash and interest –earning investments 2. Invested ca
Slide 11: Sustaining capex spend
Sustaining capex spend Focus of 2009 capital: improving AB Thermal availability, increasing productivity and completing the Centralia transition (MM) 2008 2009e 2010e Sustaining $465 $360 - 410 $270 - 315 Routine $135 $115 – 135 $100 - 115 Productivity $32 $40 – 45 Mine $100 $35 - 45 $40 - 50 Centra
Slide 12: Growth capex spend
Growth capex spend Growth capex highest in 2009 as Keephills 3 labour peaks, Sun 5 and Blue Trail are commissioned, and the addition of Ardenville (MM) Total 2008 2009e 2010e 2011e Growth $ 1,404 $5412 $485 - 550 TBD TBD Keephills 31 $888 $336 $235 - 255 Blue Trail $115 $26 $85 - 90 Sun Unit 5 $75 $
Slide 13: Performance goals
Performance goals Financial Measures 2009 Goals Q2 2009 Q2 2008 Review ratios Increased due to lower unplanned outages at AB Thermal plants, Achieve top decile Availability 90 - 92% 88.8% 79.3% lower planned and unplanned operations outages at Centralia and no planned maintenance at Genesee 3. Impro
Slide 14: 2009 Outlook
2009 Outlook Well positioned to deliver strong second half of 2009: 9 Over 95% of portfolio contracted for 2009 9 Accelerated major maintenance program substantially complete; operations on track to return to historical availability levels in the second half of 2009 9 New production expected from
Slide 15: Appendix
Appendix 15
Slide 16: Income Statement
Income Statement (MM) Q2 '09 Q2 '08 YTD Q2 '09 YTD Q2 '08 Revenue $ 585 $ 708 $ 1,341 $ 1,511 Fuel & purchased power (239) (332) (614) (702) Gross margin 346 376 727 809 OM&A 207 178 381 313 Depreciation & amortization 118 100 235 204 Taxes, other than income taxes 7 5 12 10 Operating expenses 332 2
Slide 17: Cash Flow
Cash Flow (MM) Q2 '09 Q2 '08 YTD Q2 '09 YTD Q2 '08 Operating Activities $ 94 $ 171 $ 285 $ 404 Change in non-cash working capital (37) - (145) 4 57 171 140 408 Investing Activities Additions to property, plant, and equipment (281) (239) (412) (389) Proceeds on sale of property, plant, and equipment
Slide 18: Free Cash Flow
Free Cash Flow Q2 2009 Q2 2008 YTD YTD (MM) Q2’09 Q2’08 Cash flow from operating activities $57 $171 $140 $408 Add (Deduct): Sustaining capital expenditures (109) (109) (178) (186) Dividends on common shares (57) (54) (111) (105) Distribution to subsidiaries’ non-controlling (17) (27) (33) (44) inte
Slide 19: Average spot electricity prices
Average spot electricity prices $ per MWh $120 $108 $100 $92 $80 $62 $60 $54 $48 $47 $48 $40 $32 $33 $28 $21 $23 $20 $0 Alberta Pac NW Ontario Q2 2009 Q2 2008 YTD 2009 YTD 2008 19
Slide 20: Average spark spreads
Average spark spreads $ per MWh $50 $38 $40 $30 $30 $18 $20 $8 $9 $10 $2 $0 $0 -$10 ($4) ($5) -$20 ($19) -$30 ($25) -$40 ($36) Alberta Pac NW Ontario Q2 2009 Q2 2008 YTD 2009 YTD 2008 20