Slide 1: Investor Update
Investor Update December 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: Who we are
Who we are • Canada’s largest non-regulated electric generation and wholesale marketing company • Close to $9 billion in assets • 10,000 MW generating capacity • 85% of generation capacity currently contracted • Investment grade credit ratings
Slide 4: Recognition
Recognition • Ranked #1 utility in the world in sustainable development by Dow Jones • Ranked #1 in Canada in corporate governance by the Globe & Mail • Ranked #1 in Canada in electricity safety performance by the Canadian Electricity Association (CEA) • Ranked #1 for our annual report for excellenc
Slide 5: Transformation (1999 – 2003)
Transformation (1999 – 2003) Proceeds from divested assets $ 2.9 billion Acquisitions / investments $ 4.4 billion After-tax gains $ 0.6 billion Wabamun decommissioning $ (0.1 billion) Net increase in common equity $ 0.5 billion
Slide 6: Alberta PPA Assets – Wabamun Case
Alberta PPAAssets _ 4 Wabamun 9 Case asi FORT SASKATCHEWAN (FORT SASKATCHEWAN, AB) “18 MW total (3056 owned) MeniCant CENTENNIAL 1 & 2 (LLOYDMINSTER, AB) (KEEPHILLS, AB) 20 MW 900 MW POPLAR CREEK (FORT McMURRAY, 356 MW GENESEE 3 (GENESEE, AB) Oo ssomw CALGARY, AB. CORPORATE OFFICE (OTTAWA. ON) 68 MW
Slide 7: Portfolio strategy
Portfolio strategy (in percent) Capacity by Capacity by Contract geography fuel type cover 10 12 11 24 29 37 52 66 59 Canada Coal AB PPA U.S. Gas Contracted Mexico & Australia Hydro & renewables Spot
Slide 8: Portfolio composition
Portfolio composition Last few years have focused on capacity growth Expected MW ROCE 4000 3500 3000 2500 2000 1500 1000 500 0 0 to 6 to 11 to 16 to 21 to 26 to 31 to 36 to 40+ 5 10 15 20 25 30 35 40 Age of plant
Slide 9: Consolidation phase
Consolidation phase ain tain Be cos im ize Grow M g Focus x stron e o effecti t Ma set s intellig c people n ve as ently b a la n sheet
Slide 10: Maintenance
Maintenance Strategy: Move from unplanned to planned maintenance • Market responsive • Fleet wide approach • Improve spending effectiveness • Reduce outages Planned maintenance $ millions 9 months ended Sept. 30 2003 2002 Capitalized $ 31 $ 92 Expensed $ 65 $ 27 Total $ 96 $ 119
Slide 11: Financial goals / credit targets
Financial goals / credit targets • Maintain strong balance sheet Strong Credit Strong Share Rating Price • Maintain investment grade credit rating Maintain Dividend • Grow earnings and hold dividend Dec/02 Sept/03 Near - Long - Debt / capital 50.4% 48.9% term term target target Cash flow / interest
Slide 12: Financial results
Financial results 3 months ended YTD Sept. 30, 2003 Sept. 30, 2003 $ millions Change Change Revenues $ 630 +40% $ 1,787 +48% Earnings from continuing $ 118 +68% $ 190 +48% operations EPS from continuing $ 0.62 +48% $ 1.04 +37% operations Cash flow from operating $ 147 N/A* $ 591 +138% activities *Ca