Transalta Corporation · TSX:TA
Transalta — Non-Deal Roadshow (February 2004)
15 slides from Transalta's roadshow presentation, February 2004
Slide 1: European Investor Update
European Investor Update February 2004
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: Transformation (1999 – 2003)
Transformation (1999 – 2003) Integrated regulated Generation & marketing utility company 1999 2000 2001 2002 2003 →Acquired Centralia →Exited New Zealand →Sold D & R →Entered Mexico →Alberta generation deregulated →Centralia gas plant online →Sold Transmission →Acquired Vision Quest →Acquired 50% in
Slide 5: Transformation (1999 – 2003)
Transformation (1999 – 2003) Proceeds from divested assets $ 2.9 billion Acquisitions / investments $ 4.4 billion Reported Earnings $ 1.1 billion Operating Cash Flow $ 2.5 billion Dividends ($1.00/share) $ 0.9 billion
Slide 6: Today
Today • Operating our plants well →Availability of 90%+ • Output is highly contracted- 85% in ’04 →PPA’s, Mexico, CoGens • Investment grade credit rating →BBB-/Baa2 • 5% EPS growth target
Slide 7: Alberta PPA Assets
Alberta PPAAssets POPLAR CREEK [FORT McMURRAY, 1) Wabamun 9 Cc Se MW FORT SASKATCHEWAN (FORT SASKATCHEWAN, AB) 118 MW totat GOR. sures MERIDIAN CENTENNIAL 1 & 2 (LLOYDMINSTER, AB) 20 MW (KEEPHILLS, AB) ‘900’ MW e GENESEE 3 (GENESEE, AB) ° Oo womw ; CALGARY, AB CORPORATE OFFICE MCBRIDE LAKE {FORT MAC
Slide 8: Portfolio strategy
Portfolio strategy (in percent) Capacity by Capacity by Contract geography fuel type cover 9 13 15 25 45 30 57 66 40 Canada Coal AB PPA U.S. Gas Contracted Mexico & Australia Hydro & renewables Spot
Slide 9: 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 10: Consolidation phase
Consolidation phase a i n t ain Be cos mi z e G M Focus effecti t Max ts intel row i stron e g o people n ve asse ligentl l a n c y b a sheet
Slide 11: Maintenance
Maintenance Strategy: Move from unplanned to planned maintenance • Market responsive • Fleet wide approach • Improve spending effectiveness • Reduce outages Planned maintenance $ millions Year ended Dec. 31 2003 2002 Capitalized $ 35 $ 102 Expensed $ 77 $ 46 Total $ 112 $ 148
Slide 12: 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/03 Dec/02 Debt / capital 47.9% 50.4% 3 year 5 year target target Cash flow / interest 3.3x 3.7x B
Slide 13: Cash Flow Analysis 2004
Cash Flow Analysis 2004 Cash flow from operating activities $ 550 - 600 Capital expenditures -Maintenance $ 240 - 260 -Growth $ 160 Cash dividends/distributions $ 200 Exercise of warrants $ 125 Note: $ in millions
Slide 14: Slide 14
Slide 15: Financial results
Financial results 3 months ended YTD Dec. 31, 2003 Dec. 31, 2003 $ millions Change Change Revenues $ 655 +23% $ 2508 +38% Net earnings $ 44 N/A $ 234 +17% Net EPS $ 0.23 N/A $ 1.26 +8% $ 165 -13% $ 756 +73% Cash flow from operating activities