Slide 1: 2011 First Quarter Results
2011 First Quarter Results. 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 ] First quarter results ] Performance against key measures ] 2011 Outlook 3
Slide 4: Q1 Results: Strong results driven by operational performance
Q1 Results Strong results driven by strong operational performance across the fleet and improvements in Alberta market conditions ] Comparable earnings per share increased 26% to $0.34 vs. $0.27 in Q1 2010 • Comparable generation gross margin increased by $28 million to $394 million due to: • Favour
Slide 5: Renewable portfolio generates higher margins
Q1 Results Renewable portfolio continues to generate higher margins; contributing 25% of total comparable generation gross margins Comparable Generation Gross Margins* Q1 2010 Q1 2011 25% 50% 21% 25% 54% 25% Coal Gas Renewables *Includes comparable gross margin from finance lease and equity investme
Slide 6: Q1 Highlights
Q1 Highlights Results ($M) Q1 Q1 2011 2010 Revenues $818 $696 Gross margin $608 $379 Operating income $359 $133 Comparable earnings $75 $60 Net earnings attributable to common shareholders $204 $60 Comparable earnings per share $0.34 $0.27 Net earnings per common share, basic and diluted $0.92 $0.27
Slide 7: Q1 Results: Comparable earnings
Q1 Results Comparable earnings Q1 Q1 Results ($M) 2011 2010 Net earnings applicable to common shares $204 $60 Impacts associated with certain de-designated and ineffective (129) - hedges, net of tax Earnings on a comparable basis $75 $60 Weighted average common shares outstanding in the period 221 2
Slide 8: Q1 Results: Net earnings
Q1 Results Net earnings Q1 Net earnings attributable to common shareholders, 2010 $60 Increase in Generation gross margins 28 Mark-to-market movements – Generation 200 Increase in Energy Trading gross margins 1 Decrease in OM&A costs 6 Increase in depreciation expense (8) Increase in net interest ex
Slide 9: Q1 Significant events
Q1 Significant events Significant events ] New Richmond March 28, TransAlta announced the construction of the 66 MW New Richmond wind project located in Quebec. New Richmond is contracted under a 20-year Power Purchase Agreement with Hydro-Quebec Distribution. The cost of the project is estimated to
Slide 10: Performance Metrics
Performance Metrics 2011 Goals Measures Q1 2011 Q1 2010 Review Availability and production decreased due to higher planned and unplanned Availability & Production: Availability 90.3% 91.4% outages. Production was also impacted Achieve 89 – 90% fleet availability and by economic dispatching at Centra
Slide 11: 2011 Outlook
2011 Outlook Well positioned to steadily grow earnings and funds from operations on a trend-line basis over the commodity cycle ] Drive the Base • Sustain strong availability: On track to hit target of 89 – 90% for full year • Energy trading expected to contribute between $45 - $65 million in gross
Slide 12: Appendix
Appendix 12
Slide 13: Income Statement
Income Statement (MM) Q1 '11 Q1 '10 Revenue $ 818 $ 696 Fuel & purchased power 210 317 608 379 OM&A 128 134 Depreciation & amortization 114 106 Taxes, other than income taxes 7 6 249 246 359 133 Finance lease income 2 2 Equity loss - (4) Foreign exchange gain 1 3 Net interest expense (49) (48) Earni
Slide 14: Cash flow statement
Cash flow statement ($M) Q1 '11 Q1 '10 Operating Activities Funds from operations $ 226 $ 194 Change in non-cash working capital (79) (23) Cash flow from operating activities 147 171 Investing Activities Additions to property, plant, and equipment (87) (121) Additions to intangibles (5) (4) Proceeds
Slide 15: Free cash flow
Free cash flow Q1 Q1 ($M) 2011 2010 Cash flow from operating activities $147 $171 Add (Deduct): Changes in working capital 79 23 Sustaining capital expenditures (59) (44) Dividends paid on common shares (47) (59) Dividends paid on preferred shares (4) - Distribution to subsidiaries’ non-controlling
Slide 16: Average spark spreads
Average spark spreads $ per MWh $60 $55 $50 $40 $30 $20 $10 $6 $6 $0 $0 -$10 ($6) ($6) Alberta Pac NW Ontario Q1 2011 Q1 2010 16
Slide 17: Average spot electricity prices
Average spot electricity prices $ per MWh $90 $82 $80 $70 $60 $50 $41 $42 $40 $32 $34 $30 $22 $20 $10 $0 Alberta Pac NW Ontario Q1 2011 Q1 2010 17