Transalta Corporation · TSX:TA
Transalta — Shareholder Meeting (April 2005)
53 slides from Transalta's shareholder meeting presentation, Apr 29, 2005
Slide 1: TransAlta's Annual Meeting of Shareholders
TransAlta’s Annual Meeting of Shareholders April 29, 2005
Slide 2: Board of Directors
Board of Directors William D. Anderson
Slide 3: Board of Directors
Board of Directors Stanley J. Bright
Slide 4: Board of Directors
Board of Directors Timothy W. Faithfull
Slide 5: Board of Directors
Board of Directors Gordon D. Giffin
Slide 6: Board of Directors
Board of Directors Louis D. Hyndman
Slide 7: Board of Directors
Board of Directors C. Kent Jespersen
Slide 8: Board of Directors
Board of Directors Michael M. Kanovsky
Slide 9: Board of Directors
Board of Directors Donna Soble Kaufman
Slide 10: Board of Directors
Board of Directors Luis Vazquez Senties
Slide 11: Board of Directors
Board of Directors Stephen G. Snyder
Slide 12: TransAlta's Annual Meeting of Shareholders
TransAlta’s Annual Meeting of Shareholders April 29, 2005
Slide 13: John Lane 1935 - 2004
John Lane 1935 - 2004 TransAlta
Slide 14: Jack Donald and John T. Ferguson
Jack Donald John T. Ferguson Board tenure 1993 - 2005 Board tenure 1981 - 2005
Slide 15: TransAlta
TransAlta
Slide 16: Chief Financial Officer's Report
Chief Financial Officer’s Report Ian Bourne
Slide 17: 2004 Financial Results
2004 FINANCIAL RESULTS % change ($ millions) vs. 2003 Revenues $ 2,838 +13% Gross margin $ 1,409 +4% Operating expenses $ 971 +5% Interest expense $ 222 0% Non-recurring items $ 40 -69% Net earnings $ 170 -27% Earnings per share $ 0.88 -30%
Slide 18: 2004 Financial Results
2004 FINANCIAL RESULTS % change ($ millions) vs. 2003 Cash flow from operations $ 613.4 +16% Long-term debt $ 3,058 -11% Other liabilities $ 1,095 -7% Shareholder’s equity $ 2,473 0%
Slide 19: Financial Ratios
FINANCIAL RATIOS 2003 2004 Target Cash flow to interest (times) 3.3 4.1 4.2 Cash flow to total debt (%) 17.2 18.5 28 Debt to total capital (%) 47.7 47.4 45
Slide 20: Q1 2005 Synopsis
Q1 2005 Synopsis • Good operational quarter • Earnings $0.27 per share • Cash flow $160 million
Slide 21: Chief Financial Officer's Report
Chief Financial Officer’s Report Ian Bourne
Slide 22: Chief Executive Officer's Report
Chief Executive Officer’s Report Steve Snyder
Slide 23: 2003: A year of clutter
2003: A year of clutter sustainability reduced unplanned dividend outages increased availability
Slide 24: Cutting through the clutter: a robust business model
CUTTING THROUGH THE CLUTTER A robust business model Long-term earnings sustainability Asset gathering Æ Earnings gathering
Slide 25: Excellent cash sustains dividend
CUTTING THROUGH THE CLUTTER • Paying down debt • Reducing costs and interest expenses • Reinvesting in our assets Excellent cash sustains dividend
Slide 26: Give me ten minutes … 2004 Annual Report
Give me ten minutes … 2004 Annual Report
Slide 27: Generating cash and earnings
GENERATING CASH AND EARNINGS Key Factors Contracted capacity Over 80% Availability Top quartile Cost reductions Offsetting inflation Alberta PPAs Secure revenues Cash flow Dividend security
Slide 28: New rules for building capacity
New rules for building capacity
Slide 29: Sustainable Development & Kyoto
Sustainable Development & Kyoto
Slide 30: Sustainable Development & Kyoto
Sustainable Development & Kyoto SO2 emissions Greenhouse gas emissions Environmental performance Dow Jones Sustainability Index Top 10 % of sustainable corporations
Slide 31: Transmission and Natural Gas
Transmission and Natural Gas ? Transmission capacity ? Access to natural gas
Slide 32: Controlling our destiny
CONTROLLING OUR DESTINY CAPACITY IN OPERATION BY CONTRACTED CAPACITY BY FUEL SOURCE CAPACITY GEOGRAPHY (%) (%) (%) 4 <q 29 Coal 4,885 MW @ Alberta PPAs @ Canada Gas 2,444 MW Long Range US. m Hydro 802 MW Contracts ™@ Mexico and Renewable 313 MW @ Merchant Australia TransAlta
Slide 33: How did we perform?
HOW DID WE PERFORM? Sweat the assets Drive down excess costs Invest with discipline Maintain a strong balance sheet Focus on people
Slide 34: Generate cash from operations
GENERATE CASH FROM OPERATIONS • $100 million reinvested • $375 million plus of debt paid down • $135 million in dividends
Slide 35: Improve key financial ratios
IMPROVE KEY FINANCIAL RATIOS
Slide 36: Reduce our costs
REDUCE OUR COSTS • Operating, maintenance and administration costs reduced
Slide 37: Operational excellence
OPERATIONAL EXCELLENCE AVAILABI! MARGIN DOLLARS PER MWH (%) wo ($/MWh) & q 8 + nO oe) N (ee) ite} + 02 03 02 03 «04 TransAlta
Slide 38: Discipline in energy trading and marketing
DISCIPLINE IN ENERGY TRADING AND MARKETING
Slide 39: Progress on Sarnia and Centralia gas plants
PROGRESS ON SARNIA AND CENTRALIA GAS PLANTS Progress on discussions with Ontario government Continued market challenge for Centralia gas plant
Slide 40: Breaking through the clutter
Breaking through the clutter
Slide 41: Breaking through the clutter
Breaking through the clutter Optimize our existing assets Cash generation Long-term view
Slide 42: Breaking through the clutter
Breaking through the clutter Internal processes Local asset teams Engineering assessments 20-year business plans for every asset Five-year company financial plan Rolling life-cycle maintenance plan Strategic supplier relationships
Slide 43: What will change in the next two to three years?
WHAT WILL CHANGE IN THE NEXT TWO TO THREE YEARS? Major maintenance will drop to $150 - $170 million Interest costs will continue to decline We’ll drive down OM&A costs We’ll leverage our coal advantage Sarnia to contribute to earnings Markets and pricing will improve modestly
Slide 44: What will change in the next two to three years?
WHAT WILL CHANGE IN THE NEXT TWO TO THREE YEARS? Dividend and assets are secure Increase in earnings Many options to improve shareholder value
Slide 45: Our people
Our people TransAlta
Slide 46: Cash flow strong and sustainable
Cash flow strong and sustainable
Slide 47: Strong balance sheet
Cash flow strong and sustainable Strong balance sheet
Slide 48: Assets operating well
Cash flow strong and sustainable Assets operating Strong balance sheet well
Slide 49: Low risk profile
Cash flow strong andLow sustainable risk profile Strong balance sheet Assets operating well
Slide 50: Discipline to succeed
Cash flow Low Discipline to strong and sustainable risk profile Strong succeed balance sheet Assets operating well
Slide 51: Plan is sound
Cash flow Low strong and sustainable Plan risk profile Strongis soundDiscipline to balance sheet succeed Assets operating well
Slide 52: Our dedicated employees are on the job for you
Our dedicated employees are on the job for you
Slide 53: TransAlta's Annual Meeting of Shareholders
TransAlta’s Annual Meeting of Shareholders April 29, 2005