Transalta Corporation · TSX:TA
Transalta — National Bank Financial Investor Meetings 2003
16 slides from Transalta's conference presentation, August 2003
Slide 1: National Bank Financial Investor Meetings 2003 Update
National Bank Financial Investor Meetings 2003 Update August 2003
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. These statements are subject to a number of risks and uncertainties that may cause actual results to differ
Slide 3: Agenda – 2003 update
Agenda – 2003 update • Business plan • What we’ve done • Outlook
Slide 4: 2003 business plan
2003 business plan Manag ain Discip lined Run e M aint ts Asset g Growt h Asse tly Stron e n Risk c Efficie Balan t Shee
Slide 5: What we’ve done
What we’ve done
Slide 6: Disciplined growth
Disciplined growth • January: CE Generation • 50 / 50 partnership with MidAmerican – 816 MW • US$205 million + working capital • $0.05 EPS in 2003; growth beyond 2003 • Fits with strategy – financial, risk mitigation, partnership • January: Genesee 3 • 50 / 50 partnership with EPCOR – 450 MW • $395
Slide 7: Disciplined growth (continued)
Disciplined growth (continued) • April: Sarnia Regional Cogeneration Project • 575 MW total – 440 MW new facilities • $490 million • May: Campeche • 252 MW in Mexico under 25-year contracts • US$202 million • June: McBride Lake Wind Farm • 50 / 50 partnership with ENMAX – 114 turbines, 75 MW • $100
Slide 8: Run assets efficiently
Run assets efficiently YTD Year 2003 2002 2002 2001 Availability % 91.0 88.0 88.4 86.9 • Reduced forced outages at Centralia • Alberta thermal program is proving beneficial • Gas plants continue to hit targets Increase production • Up 12% YTD • New plants & better production at Centralia offsetting
Slide 9: Manage asset risk
Manage asset risk Capacity by Capacity by Contract (in percent) geography fuel type cover 11 10 10 21 28 30 61 60 12/31/02 69 10 11 12 06/30/03 24 29 59 52 37 66 Canada Coal AB PPA U.S. Gas Other contract Mexico & Australia Hydro & renewables Spot * Capacity includes plants under construction & assu
Slide 10: Maintain strong balance sheet
Maintain strong balance sheet Strong Credit Strong Share • March equity offering Rating Price • Proceeds of $276 million • 17.25 million shares at $16.00 per share Maintain Dividend • Well received by financial community • Monetized Calgary head office complex for $66 million • Sale of Sheerness to
Slide 11: Maintain strong credit ratings
Maintain strong credit ratings Strong Credit Strong Share Rating Price • May 30: S&P remove TA from credit watch • Down two notches to BBB- / stable Maintain Dividend • Appears to be “formula driven” • August 1: Moody’s remove TA from credit watch • Down one notch to Baa2 (negative outlook) • Recogn
Slide 12: Financial results
Financial results ($ millions) YTD June 30 2003 Change Revenues $ 1157 +53% Operating income $ 223 +43% Earnings from continuing operations $ 72 +23% EPS ($) - Continuing $ 0.40 +18% - Total reported $ 0.40 -62% Highlights • CE Gen & new plants drive revenue & operating income • New assets drive hig
Slide 13: Financial results (continued)
Financial results (continued) ($ millions) YTD June 30 2003 Change Cash flow from operating activities $ 444 +69% CAPEX $ 406 -29% - Growth $ 350 - 7% - Maintenance & productivity $ 56 - 71% Highlights • Tax recoveries in 2003 ($110M) vs. payments ($109M) in 2002 • New plant activity reduced
Slide 14: Increased disclosure
Increased disclosure • Increased detail in quarterly & annual reporting (MD&A) • Production and gross margin split by revenue source • AB PPA • Long-term contracts • Merchant • CE Generation • Production summary by plant and gross margin information available on Web site – updated quarterly
Slide 15: 2003 outlook
2003 outlook Achiev r ate Contin g n Financ e Inte u Albert e a t io ia New Mainte a Inform ology Result l s n Tech ades s Plant nance Upgr
Slide 16: Slide 16
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