TAC TransAlta Corporation

TransAlta Corporation ("TransAlta") (TSX: TA) (NYSE: TAC) today reported fourth quarter 2009 comparable earnings(1) of $84 million ($0.40 per share) versus $79 million ($0.40 per share) in 2008. Reported net earnings for the fourth quarter were $79 million ($0.37 per share) compared to $94 million ($0.47 per share) in 2008.

Comparable results for the quarter were primarily driven by lower planned and unplanned outages at the Alberta Thermal plants and lower unplanned outages at Genesee 3. These results were offset by lower hydro volumes and pricing in Alberta, and lower Energy Trading gross margins. Fourth quarter 2008 comparable earnings also benefited from an increase in interest income as a result of a favourable tax assessment. Net earnings in the quarter were lower due to the writedown of mining development costs at Centralia, Washington, and due to a $15 million tax recovery in 2008.

Cash flow from operations for the quarter was $246 million versus $428 million in the fourth quarter of 2008. Higher cash earnings in the quarter were offset by less favourable changes in working capital.

Fleet availability for the fourth quarter increased to 87.0 per cent compared to 86.2 per cent in the fourth quarter of 2008 due to lower planned and unplanned outages at Alberta Thermal and lower unplanned outages at Genesee 3, partially offset by higher unplanned outages at Centralia Thermal.

"We are confident in our ability to deliver better performance from our coal plants and achieve our fleet availability target in 2010," said Steve Snyder, TransAlta's President and CEO. "The major maintenance work we did in 2009 resulted in improved and more consistent performance from our Alberta Keephills and Sundance units. In addition to improving operating performance, we successfully implemented several other key initiatives in 2009 that will help drive the Company's success in the years ahead. These included the long-term recontracting of our Sarnia plant, the acquisition and successful integration of Canadian Hydro Developers, and securing government funding for Project Pioneer, one of the world's first and largest scale retrofit carbon capture and storage demonstration facilities," Snyder added.

(1) Comparable earnings and comparable earnings per share are not defined under Canadian Generally Accepted Accounting Principles ("Canadian GAAP"). Presenting these measures from period to period help management and shareholders evaluate earnings trends more readily in comparison with prior periods' results. Refer to the Non-GAAP Measures section of the extended news release for further discussion of these items, including a reconciliation to net earnings.

Results for the 12 months ended December 31, 2009

For the 12 months ended Dec. 31, 2009, comparable earnings were $181 million ($0.90 per share) compared to $290 million ($1.46 per share) for the 12 months ended Dec. 31, 2008. Net earnings were $181 million ($0.90 per share) compared to $235 million ($1.18 per share) in 2008. Earnings decreased in 2009 primarily due to higher planned and unplanned outages at Alberta Thermal, lower hydro volumes and pricing, and lower Energy Trading gross margins.

Cash flow from operations for the 12 months ended Dec. 31, 2009 was $580 million, compared to $1,038 million for the 12 months ended Dec. 31, 2008. The decrease in cash flow from operations in 2009 was driven by lower cash earnings and unfavourable movements in working capital compared to last year. In addition, in 2008 TransAlta received an additional Power Purchase Agreement ("PPA") payment of $116 million.

Fleet availability for the year was 85.1 per cent compared to 85.8 per cent in 2008. The decrease in availability is attributed to the higher planned and unplanned outages at Alberta Thermal and higher unplanned outages at Centralia Thermal, partially offset by lower planned outages at Centralia Thermal and lower planned and unplanned outages at Genesee 3.

Subsequent Events

Summerview 2 Wind Farm begins commercial operation

TransAlta announced today its 66-megawatt ("MW"), $123 million Summerview 2 Wind Farm began commercial operation on February 23, 2010; on budget and ahead of schedule. The Summerview expansion is located adjacent to the original site and includes 22, three-MW, V90 Vestas wind turbines. The Summerview site now has a total installed capacity of 136 MW and will provide on average a total of 395,000 megawatt hours per year - enough electricity to meet the annual needs of approximately 55,000 homes, while offsetting 257,000 tonnes of CO2.

TransAlta's renewable generation portfolio now totals 2,032 MW in operation and includes 950 MW of wind energy, 893 MW of hydroelectric, 164 MW of geothermal energy in California through a 50 per cent interest in CE Generation LLC and 25 MW of biomass. The Company also has another 123 MW of wind generation and 18 MW of hydro under construction which are scheduled to come on line in 2010 and 2011.

TransAlta files year end disclosure documents

TransAlta announced it will file today its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the Management Discussion and Analysis (MD&A). These documents will be available through TransAlta's website at www.transalta.com or through Sedar at www.sedar.com.

TransAlta will also file today its 40-F with the U.S. Securities and Exchange Commission. The form will be available through their website at www.sec.gov/edgar.shtml. Paper copies of all documents are available to shareholders free of charge upon request.

Fourth Quarter and 12 Months Ended Dec. 31 2009 Highlights:

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In millions, unless otherwise      3 months  3 months  12 months  12 months
 stated                               ended     ended      ended      ended
                                    Dec. 31,  Dec. 31,   Dec. 31,   Dec. 31,
                                       2009      2008       2009       2008
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Availability (%)                         87      86.2       85.1       85.8
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Production (GWh)                     12,297    12,656     45,736     48,891
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Revenue ($MM)                       $   763   $   808    $ 2,770    $ 3,110
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Gross margin ($MM)(1)               $   435   $   410    $ 1,542    $ 1,617
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Operating income (loss) ($MM) (1)   $   159   $   127    $   378    $   533
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Net earnings ($MM)                  $    79   $    94    $   181    $   235
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Comparable earnings ($MM) (1)       $    84   $    79    $   181    $   290
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Basic and diluted earnings per
 share                              $  0.37   $  0.47    $  0.90    $  1.18
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Comparable earnings per share(1)    $  0.40   $  0.40    $  0.90    $  1.46
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Cash flow from operations ($MM)     $   246   $   428    $   580    $ 1,038
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(1) Gross margin, operating income, and comparable earnings are not defined
    under Canadian GAAP. Refer to the non-GAAP financial measures section
    beginning on page 23 of the extended news release for an explanation and
    reconciliation.

A complete copy of TransAlta's fourth quarter extended news release is available on the Investors section of our website: www.transalta.com.

TransAlta will hold a conference call and web cast at 9 a.m. MT (11 a.m. ET) today to discuss results. The call will begin with a short address by Steve Snyder, President and CEO, and Brian Burden, Chief Financial Officer, followed by a question and answer period for investment analysts, investors, and other interested parties. A question and answer period for the media will immediately follow.

Please contact the conference operator five minutes prior to the call, noting "TransAlta Corporation" as the company and "Jennifer Pierce" as moderator.

Dial-in numbers:

For local Toronto participants - 1-416-340-8061

Toll-free North American participants - 1-866-225-0198

A link to the live webcast will be available via TransAlta's website, www.transalta.com, under Web Casts in the Investor Relations section. If you are unable to participate in the call, the instant replay is accessible at 1-800-408-3053 with TransAlta pass code 8782314. A transcript of the broadcast will be posted on TransAlta's website once it becomes available. Note: If using a hands-free phone, lift the handset and press one to ask a question.

TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate our biomass, geothermal, wind, hydro, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power. For 100 years, TransAlta has been a responsible operator and a proud contributor to the communities where we work and live. TransAlta is recognized for its leadership on sustainability by the Dow Jones Sustainability North America Index, the FTSE4Good Index and the Jantzi Social Index.

This news release may contain forward looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. These statements are based on TransAlta Corporation's belief and assumptions based on information available at the time the assumption was made. These statements 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 legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions in geographic areas where TransAlta Corporation operates.

Contacts: TransAlta Corporation - Media inquiries Michael Lawrence Manager, External Relations (403) 267-7330 michael_lawrence@transalta.com TransAlta Corporation - Investor inquiries Jennifer Pierce Vice President, Communications & Investor Relations (403) 267-7622 TransAlta Corporation - Investor inquiries Jess Nieukerk Manager, Investor Relations (403) 267-3607 investor_relations@transalta.com www.transalta.com