TransAlta Corporation · TSX:TA
TransAlta — CIBC World Markets Institutional Investor's Conference 2006
15 slides from TransAlta's conference presentation, February 2006
Slide 1: CIBC World Markets Institutional Investor's Conference February 2006
CIBC World Markets Institutional Investor’s Conference February 2006
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: Financial highlights
Financial highlights TransAlta (millions $Cdn) 2005 2004 2003 Comparable earnings 174 128 129 per share 0.88 0.66 0.69 Net Earnings 199 170 234 per share 1.01 0.88 1.26 Cash flow from operations 619 591 474
Slide 4: Free cash flow
Free cash flow TransAlta millions $Cdn 2005 2004 2003 Cash flow from operating activities 619 591 474 Less: maintenance and other capex 285 204 137 Less: scheduled debt repayment 40 28 2 Less: distribution to NCI 54 46 39 Comparable free cash flow 240 313 296
Slide 5: Operating performance…solid with major maintenance
Operating performance…solid with major maintenance 2005 2004 2003 Availability (%) 89.4 89.2 90.5 Production (GWhs) 51,810 51,396 51,519 Major maintenance (millions $Cdn) Capital $ 119 88 35 Operating $ 68 73 76 Total $ 187 161 111 Lost production (GWhs) 2,818 2,507 2,198
Slide 6: Financial ratios
Financial ratios Debt to Capital Non-Recourse Debt Recourse Debt 60.0% BBB - Baa3 55.0% BBB low Forecast 50.0% BBB + BBB high 45.0% Baa1 40.0% 35.0% 30.0% 25.0% 20.0% 2003 2004 2005 2006 2007 2008 2009 Forecast based on assumed share buy-back
Slide 7: Improving credit ratios
Improving credit ratios C a s h F lo w to In te r e s t 7 x F o re c a s t 6 x 5 x BBB + B B B h ig h 4 x B aa1 3 x BBB - B aa3 2 x B B B lo w 1 x 0 x 2003 2004 2005 2006 2007 2008 2009 C a s h F lo w to T o ta l A v e ra g e D e b t 3 5 .0 % F o re c a s t BBB + 3 0 .0 % B B B h ig h B aa1 2 5 .0 %
Slide 8: What lies ahead?
What lies ahead?
Slide 9: Contracting remains high … for stability
Contracting remains high … for stability TransAlta contracting levels 1) Current contracting levels: 9000 8000 ~ 88 % in 2006 - 2007 Capability in MWs 7000 6000 ~ 75 % in 2008 - 2010 5000 2) Recontracting plans have 4000 3000 specific regional and asset 2000 targets to achieve balance 1000 0 between
Slide 10: Sarnia contract
Sarnia contract • Average 400 MW Portfolio capacity capacity contract • 5 year term to Dec. 2010 • Backed by Ontario Sarnia 7% government (AA credit rating) • $0.10 to $0.12 EPS impact
Slide 11: Centralia Coal contracting upside
Centralia Coal contracting upside Portfolio capacity Centralia Coal (16%) Potential to add 5 -10 cents EPS in 2006. Additional upside 2007 - 2010 • Heritage contracts roll off at an excellent time; expect recontracting to capture higher prices as plant re-contracted. led by high oil and gas prices •
Slide 12: Centralia Coal
Centralia Coal • Centralia permit delays have caused longer haul distances and increased strip ratios • Diesel fuel prices budgeted to be higher in 2006 • Rain in December/January impacted mine operations • Train shortage compounded relief efforts 12
Slide 13: Our focus looking forward
Our focus looking forward 2006 – 2007 2008 – 2010 Increase earnings ¾ Increase earnings Increase productivity/ ¾ Improve ROE strengthen margins and ¾ Achieve improved credit decrease OM&A per rating MWh ¾ Grow assets selectively Meet contracting ¾ Achieve environmental targets compliance at le
Slide 14: Appendix
Appendix TransAlta
Slide 15: Debt maturity schedule
Debt maturity TransAlta Debt Maturity Schedule 400 350 300 Repayment (C$ Millions) 250 250 50 200 346 346 100 150 225 100 200 205 175 141 115 110 50 100 0 05 06 07 08 09 10 11 12 13 14 28 29 30 31 32 33 50 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
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