Powering the Next Generation April 29, 2010 - TransAlta for web.pdf · the reader should not place undue reliance on this forward-looking ... digit earnings and EBITDA growth in

TransAlta AGMPowering the Next Generation

April 29, 2010

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Board of Directors

William D. Anderson

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Board of Directors

Stephen L. Baum

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Board of Directors

Timothy W. Faithfull

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Board of Directors

Gordon D. Giffin

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Board of Directors

C. Kent Jespersen

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Board of Directors

Michael M. Kanovsky

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Board of Directors

Gordon S. Lackenbauer

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Board of Directors

Karen Maidment

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Board of Directors

Dr. Martha C. Piper

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Board of Directors

Stephen G. Snyder

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Board of Directors

Donna Soble Kaufman

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Remarks from the Chair of the BoardDonna Soble Kaufman

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Leading provider of renewable energy in North America

Operational and development expertise

Robust growth portfolio

Strong balance sheet

Progress on strategic initiatives in 2009 well positions TransAlta to deliver value well into the future

Delivering value to our shareholders

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Building a strong, sustainable company


Three key focus areas:

Strategic plan

Sustainable business practices

Corporate governance

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Strategic plan



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Strategic plan



TransAlta was awarded the Conference Board of Canada’s ‘Spencer Stuart’2009 National Award for “best private sector corporate governance”



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Board of Directors

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Chief Financial Officer’s ReportBrian Burden

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This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. These statements are not guarantees of our future performance and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include cost of fuels to produce electricity, legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels, unanticipated accounting or audit issues with respect to our financial statements or our internal control over financial reporting, plant availability, and general economic conditions in geographic areas where TransAlta Corporation operates. Given these uncertainties, the reader should not place undue reliance on this forward-looking information, which is given as of this date. The material assumptions in making these forward-looking statements are disclosed in our 2009 Annual Report to shareholders and other disclosure documents filed with securities regulators.

Unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

Forward looking statements

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Financial strategy

2009 year in review

Q1 2010 results and full year financial outlook

Financial strength

Outline

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Maintain a strong balance sheet and investmentgrade credit ratios

Remain disciplined in our capital allocation plan

Focus on IRR, ROCE and TSR objectives

Financial strategy creates near and long-term shareholder value

Financial strength provides competitive advantages in a long-cycle, capital intensive, cyclical industry

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$1,006$895EBITDA

9.65.8Comparable return on capital employed (ROCE) (%)

(23.9)1.4Total shareholder return (%)

$1.16

$580

$0.90

$0.90

$181

$181

2009

$1.08

$1,038

$1.18

$1.46

$235

$290

2008

Comparable earnings per share

Basic and diluted earnings per share

Comparable earnings

Cash dividends declared per share

Cash flow from operating activities

Net earnings

Results ($M)

2009 Financial results

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2010 Q1 Comparable earnings

12,17312,914Production (GWh)

86.4%91.4%Availability (%)

0.29

0.31

0.31

67

67

Q1 2010

0.29

0.21

0.18

42

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Q1 2009

Comparable earnings per share

Basic and diluted earnings per share

Comparable earnings

Cash dividends declared per share

Net earnings

Results ($M)

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Executing on our strategy

2010 by the numbers

>50% EBITDA from low carbon generation

and growing; should lead to multiple

expansion

92% contracted for 2010, leverage to power price recovery in key markets

Earnings growthReturn to double digit earnings and EBITDA growth in

2010

$850 - $950 millionCash flow from operations

$300 - $400 millionFree cash

*Analyst consensus estimate

$0

$200

$400

$600

$800

$1,000

2010e

Free CashFlow

Dividends

Sustaining Capex

$MEarnings per share Cash flow

Coal48%

Gas23%

2010e

Renewables29%

EBITDA

$1.16$1.31 $1.46

$1.12$0.90

2006

2007

2008

2009

2010

e*

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$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

Credit Lines Utilized Credit Lines Available

35%

40%

45%

50%

55%

60%

2006 2007 2008 2009

0%5%

10%15%20%25%30%35%

2006 2007 2008 2009012345678

2006 2007 2008 2009

Execute our plan while maintaining long-term financial strength and stability

Range:4 - 5x

Cash flow to interest

Range:20 - 25%

Financial strength

Range:55 - 60%

Debt to capital Committed credit lines

Mar. 31, 2009 Mar. 31, 2010

$B

Cash flow to debt

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President & CEO’s ReportSteve Snyder

President & CEO’s ReportSteve Snyder

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2009: Executing on our strategy

Canadian Hydro Developers

Blue Trail, Summerview II and Ardenville

Sarnia

Project Pioneer

Renegotiated and enhanced returns at Sarnia

Brought Blue Trail wind farm online and began construction of Summerview II and Ardenville wind farms

Acquired Canadian Hydro Developers; became Canada’s leading provider of renewable energy

Completed partnership agreements to fund development of Project Pioneer

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2010 Strategy

Low-to-moderate risk strategy provides sustainable and consistent shareholder value creation in all market cycles

Balance sheet strength and investment grade credit ratios

High degree of contracting provides earnings protection; 92% contracted for 2010; 86% contracted for 2011

Low cost structure; driving sustainable productivity improvements

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Drive the base• Drive operational stability• Increase productivity• Optimize portfolio

Green our portfolio• Accelerate renewable investment• Advance natural gas combined cycle development• Secure natural gas supply

Reposition coal• Execute on unit specific maintenance plans• Maintain options around coal sites• Participate in CCS technology development• Centralia transition planning underway to reduce greenhouse gas emissions and

provide replacement capacity by 2025

Strategic imperatives

Executing on our strategic priorities will drive near and long-term value

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Investments in technologies like CCS will reduce our overall environmental footprint and climate change impacts

Project Pioneer

Advancing Canada’s first large-scale project to retrofit a Power plant to capture and

store 1M tonnes of CO2 by 2015

Carbon Capture and Storage

CO2 returned

Energy Input (oil/gas)

Energy Input (coal)

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Achieving a real reduction in CO2:

• Start now to manage timely and economic transition

• Invest more in technology

• Establish consumer price transparency

Addressing climate change

Reducing our environmental footprint will take time and requireseffective policy management that supports economic growth and energy security

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Q&A

Documents

Powering the Next Generation April 29, 2010 - TransAlta for web.pdf · the reader should not place undue reliance on this forward-looking ... digit earnings and EBITDA growth in