Slide 1: Investor update February 2003
Investor update February 2003. NYSE : TAC TSX : TA
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
Agenda Financial Results: Q4 and 2002 Financial Strategy Growth Initiatives Plant Operations Guidance / Transparency
Slide 4: 2002 net income
2002 net income Q4 2002 Year 2002 Reported Earnings per Share $(0.38) $1.12 One-time Items Transmission sale - (0.71) Wabamun decommissioning 0.42 0.42 Turbine cancellation 0.16 0.16 Wabamun arbitration decision - 0.14 Earnings from Operations 0.20 1.13 Transmission Operation Earnings - (0.07) Earni
Slide 5: Cash flow
Cash flow Q4 Year $ millions 2002 2001 2002 2001 Cash from Operations 190 132 438 716 Capital Expenditures 235 419 986 1,256 Dispositions 2 - 820 202
Slide 6: Financial Strategy
Financial Strategy Strong credit rating Grow earnings and hold dividend Grow at affordable pace 2002 2001 Target Debt to Invested Capital 50.8% 52.3% 50.0% Interest Coverage 1.3x 3.2x 4x to 6x
Slide 7: Debt rating agencies
Debt rating agencies Sector issues CE Gen acquisition Medium-term growth plan Marketing & Trading collateral requirements Differentiate TA from sector Growth based on accretion / cash flow Constrain trading; minimize contract collateral support
Slide 8: CE Generation LLC
CE Generation LLC 50 / 50 partnership with MidAmerican – 840 MW US$205 million + working capital $0.05 EPS in 2003; growth beyond 2003 Annual US$20-25 million cash distribution to TA Fits with strategy – financial, risk mitigation, partnership
Slide 9: Genesee III
Genesee III 50 / 50 partnership with EPCOR – 450 MW $395 million (2003 – 2005) Merchant capacity – low cost fuel Supercritical combustion technology EPCOR / Fording coal reserves Offsets Wabamun Partnership includes Keephills and Sarnia
Slide 10: Availability & maintenance
Availability & maintenance Q4 Year 2002 2001 2002 2001 Availability % 87.2 89.9 88.4 86.9 Reduced forced outages at Centralia Initiated Alberta thermal program in Q4 Gas plants continued to hit targets Increase availability Maintenance Plan Become market responsive Reduce $/MW (operating + capex)
Slide 11: Guidance/ Transparency
Guidance/ Transparency Responding to market requests Provide business model components Provide market views Do not speculate on quarterly/annual EPS Q1 -- Meetings with buy and sell side Q2 -- Present Q1 results; refine for Q2 results
Slide 12: Appendix
Appendix
Slide 13: Operating results: Generation
Operating results GENERATION. Q4 Q4 Year Year 2002 2001 2002 2001 Production 12,545 11,579 46,877 44,136 (GWh) Contracted 91 94 90 92 Sales (%) Average Contracted 34.53 33.96 33.26 33.23 Price ($) Average Merchant 62.78 46.47 51.64 142.91 Sales ($)
Slide 14: Operating results: Energy Marketing
Operating results ENERGY MARKETING. Q4 Q4 Year Year 2002 2001 2002 2001 Electricity Trading 31,786 15,121 103,076 27,619 Volumes (GWh) Gas Trading Volumes 45.9 36.5 159.8 99.3 (million GJ) Average V@R 2.6 1.6 2.7 1.3 ($ millions)
Slide 15: CE Generation LLC Quick Facts
CE Generation LLC QUICK FACTS. Generation Location Capacity Contracted Type Geothermal California 330 MW 82% Natural Gas- New York 240 MW 100% fired Natural Gas- Texas 200 MW 100% fired Natural Gas- Arizona 50 MW 100% fired Total 820 MW 93%
Slide 16: NYSE: TAC TSX: TA
NYSE : TAC TSX : TA