Forward looking statements

2

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 expectations

related to the demand for electricity in both the short-term and long term, timing and

completion of projects under development including uprates and upgrades, ability to

acquire assets which are accretive, ability to source materials and parts in a timely manner,

cost of fuels to produce electricity, legislative or regulatory developments, competition,

global capital markets activity, changes in currency exchange and interest rates, inflation

levels, unanticipated accounting issues with respect to our financial statements, 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 2010 Annual

Report to shareholders and other disclosure documents filed with securities regulators.

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

TransAlta at a glance

Canada’s largest publicly traded wholesale power

generator & marketer with over 100 years of operating

experience

Over 8,000 MW strategically positioned in Canada,

Western U.S. and Australia

2,100 MW of renewable energy

1,600 MW added since 2005

Revenues of ~$3 billion generated from an asset base

of over $9 billion

Enterprise value of ~ $10 billion with a market cap of

~$5 billion

Investment grade credit ratings

Listed on Toronto and New York stock exchanges

Coal:

4,386 MW

Gas:

1,788 MW

Hydro:

912 MW

Wind:

1,127 MW

Geothermal:

164 MW

TransAlta today

3

Why TransAlta

Diversified generation portfolio located in growing markets Over 75 facilities spanning multiple fuels and geographies

Well positioned in markets with strong market fundamentals

Attractive yield supported by significant cash flow 5.4% dividend yield

$400 million per year in free cash starting in 2013

Highly contracted with upside potential to rising power prices

Significant incremental EBITDA post 2020

Proven track record for growth with significant upside potential

1,600 MW added since 2005

Significant growth pipeline

Financial strength to deliver Investment grade ratings

$2 billion of committed credit facilities

Significant cash flow and favourable access to capital

Delivering shareholder value through yield and growth

Why TransAlta

4

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

2011e

Gas Coal Renewables

8,250 MW 7,387 MW

Generation gross

margin per MWh

produced

67%

19%

14%

52%

22%

26%

$21.55

$32.42

Proven track record of improvements

Solid gross margin improvements while diversifying fuel mix

5

Low-to-moderate risk profile

Diversification Advantages

Fuel

Geographic

Contracting

Asset Age

Broad platform for growth

Downside protection, upside potential

Reduces risk and cash flow volatility

Supports investment grade ratings

6

Number of assets

$-

$250

$500

$750

$1,000

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1e

Proven track record of improvements

7

$M

Funds From Operations (FFO) FFO trend line

Solid gross margin and a diversified fleet has delivered steadily increasing

cash flow

$660

$804

Q3 2010 YTD Q3 2011 YTD

$571

$620

Q3 2010 YTD Q3 2011 YTD

Funds from

Operations

Comparable

EBITDA

Solid operations and growth driving enhanced results for investors

Strong financial performance year-over-year

M

M

M

M

8

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2008 2009 2010 2011e 2012e

Executing on our strategy

Delivering significant growth

$4 Billion invested in 1,600 MW of growth since 2005

9

MW

Coal Renewables

Western U.S.

Strategically well positioned for growth

Alberta

Rest of Canada Australia

$250 billion investment in oil sands in the next 25

years is driving significant load growth

Growing at 3% - 4% per year

Tight reserve margins driving higher power prices

TransAlta is the incumbent generator with over 30% of the provinces generation

Significant growth opportunities in multiple fuels

Long-term investment opportunities of $20 billion

Well positioned with more than 1,500 MW of coal

and geothermal

High quality geothermal resource supporting significant development opportunities

Opportunities to grow renewable and gas-fired generation through development and acquisitions

Recent Washington State bill allows for long-term contracting

Renewable and gas-fired assets located in B.C.,

Ontario, Quebec and New Brunswick

Well positioned for additional development and acquisitions

Highly reliable supplier of electricity to the mining

industry

Significant growth potential as mining industry and general economy expands

10

10,000

15,000

20,000

25,000

201

2

201

3

201

4

201

5

201

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201

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201

8

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202

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202

1

202

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202

9

Alberta: Market Overview

Oil sands growth is driving significant demand for new power generation

Alberta: Oil sands growth

11

$253 billion to be

invested in the oil

sands between

2010 and 20352

Further demand

growth driven by

related industries

Forecasted Energy Demand

from Oil Sands1

GWh

1 Source: AESO Draft 2011 Long-term Transmission Plan 2 Canadian Energy Research Institute, Economic Impacts of New Oils Sands Projects in Alberta (2010-2035), May 2011

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2010 2020 2029

Alberta: Demand forecast

12

MW

60%

89%

75%

147%

Average Alberta

Peak Demand1

Peak demand in Alberta is expected to grow significantly by 2029

1 Source: AESO Draft 2011 Long-term Transmission Plan

99%

AB Peak Demand Growth by 20291

Northwest

Northeast

Edmonton &

North Central

Calgary &

South Central

South

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

20

11

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20

29

MW

Alberta: Opportunities for growth

13

Oil sands

Related

Industries

$20 Billion1 in investment

opportunities

Retirements

1 Based on 10,000MW at $2M / MW

10,000 MW

of new supply

needed

Investment opportunity AB Peak Demand Installed capacity2

MW

2 Assumes 45 year life for coal assets based on new regulations

$40

$50

$60

$70

$80

2009 2010 2011 2012 2013 2014

Alberta Power Prices1

2010 Investor Day

+$1 / GJ = ~$8 - $10 / MWh

Market fundamentals are driving price strength and providing signals for growth

Alberta: Pricing

$/MWh

1 Figures as of Oct.12, 2011

Actuals Current Market

Cost of new generation

14

Actual Forecast

Alberta Reserve Margins1 2

1% load

growth

2% load

growth

3% load

growth

2 Includes transmission; does not include assumptions around announced facilities, only facilities under construction

0

1,000

2,000

3,000

4,000

5,000

1

Well positioned to recognize the upside price from both generation and trading

Alberta: Merchant position

AB PPAs

Merchant

LT contracts (5 years +)

MW

637 MW

431 MW

3,178 MW

ST contracts (< 5years)

400 MW

15

Energy Trading

Gross Margin

Asset Optimization

and Customer Business

Trading provides

incremental value

Merchant Portfolio

enhanced by

trading

Contracted

Assets

Expect $65 - $85 million in

gross margin for 2012

2012 – 2015

Annual Average

Sun 7

Location Alberta

Fuel type Gas fired

generation

Size 700 MW

Total project cost $1.2 - $1.4 B

Unlevered after

tax IRR

10%+

Commercial

operations date

Q1 2016

Equipment purchase underway for 700 MW combined cycle gas-fired unit

Sundance 7: Executing on growth

Progress Update

Technology and configuration: Complete

Vendor selection: Q4 2011

Construction start date: ~Q1 2014

Commissioning and commercial operations: ~ Q1 2016

Customer contracting program underway

Exploring fuel supply security

16

Sundance 8 & 9: Building our future

TransAlta will bring an additional 1,400 MW into its fleet with the addition of

Sundance 8 and Sundance 9

Sites have been selected after consultation

with the Alberta Electric System Operator

(AESO)

Sundance 8: 700 MW ~ 2018/2019

Sundance 9: 700 MW ~ 2021/2022

Progress Update

17

Western Canada: Growth opportunities

There is more than enough opportunity in Alberta for us to meet

our goal of a 30% market share

18

Combined cycle

gas-fired generation

Coal with CCS

Wind and hydro

Cogeneration

Renewable growth opportunities

Great opportunities for further renewables development across Canada

19

Saskatchewan 180 MW wind RFP

submitted

700 MW of high quality sites across

Canada

Significant acquisition opportunities

Western US: The TransAlta advantage

Our position in the Western U.S. provides us with strong opportunities to build

scale and improve cash flow stability

20

Australia: Growth opportunities

TransAlta has developed significant competitive advantages to grow its gas operations in Western Australia

15 years experience in

Australia

Operated throughout

business cycles

Strong customer relationships

Proven track record of

reliability

Valued partner

Strong stakeholder relations

Demand growing

~9% per year

Options for growth:

50 - 100 MW

increments

Leading

behind-the-fence

generator

Competitive

Advantages

Market

Fundamentals

21

Financial strategy

Objectives

Drive

Shareholder

Value

Maintain

Financial

Strength &

Flexibility

Targets Actions

TSR = 8 – 10% / yr

Consistent growth

Optimize capital

allocation

Continuous

improvements

Diversify risk

Investment Grade

Strong liquidity

Access to capital

22

We will remain disciplined in how we manage our balance sheet and grow

the company

2012 - 2015

Funds from operations

Sustaining capex

Net dividends

Total

$ 0.9

$ (0.5)

$ (0.2)

$ 0.2

2012e

($B)

Excess cash flow

$ 1.0

$ (0.4)

$ (0.2)

$ 0.4

2013-2015e

Average / year

($B)

23

Balance Sheet Growth Dividend

Continued investments in growth over the medium-term will drive TSR target

Medium-term EBITDA growth

$M

2005 - 2008

Incremental EBITDA from growth and optimization

2009 – 2010 2011 – 2013 2014 – 2020

EBITDA

growth &

dividend

yield

delivering

TSR of

8 – 10%

* Growth based on utilizing only free cash flow of $400M per year

24

Historical growth

of $40 - $60M in

EBITDA / YR

$-

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

$60 $70 $80 $90 $100 $110 $120

Long-term upside potential

$M

Estimated Incremental EBITDA in 2021

$750 - $1,250 M 2

$750

$1,000

$1,250

Alberta Power Prices 2021 ($/MWh)

2 Includes Sundance Units 3 – 6, Keephills, Sheerness, and Alberta Hydro facilities

End of PPAs will provide significant EBITDA upside

3 Minimum power prices required for new NGCC facility

3

25

1 Based on range of power prices between $60-$120/MWh and assumes facilities retire at the end of their 45 year life

Cumulative Potential

Upside1

(2021 - 2029)

$2 – 8 Billion

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

Credit Lines Available

Credit Lines Utilized

2.0

3.0

4.0

5.0

6.0

2010 Q3 2011 Proforma w/Keephills 3

Cash Flow to Interest

Committed Credit Lines

Sept. 30, 2011

$B

Financial strength & flexibility

Target:

4 - 5x Target:

20 - 25%

26

10%

15%

20%

25%

30%

2010 Q3 2011 Proforma w/Keephills 3

Cash Flow to Debt

Cash flow to Debt

Cash flow to Interest

TransAlta is committed to maintaining its investment grade credit ratings

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011e

Strong dividend coverage

27

Dividend Payout as a Percentage of Free Cash Flow1

1 Free cash flow is defined as FFO less sustaining capital expenditures

Well positioned to grow

Disciplined in the returns we expect and on maintaining

investment grade credit ratings

Upside potential in the near, medium and long-term

Diversification strategy supports our low-to-moderate risk

profile, creates value for shareholders and reduces risk

Strong internally generated cash flow and access to capital

markets

Summary

28

Additional information

($M) 2012e 2013e 2014e

Sustaining $430 - 475 $305 - 350 $365 - 410

Routine Capital $100 - 115 $85 - 100 $80 - 95

Major Maintenance $290 - 310 $180 - 200 $245 - 265

Mine Capital $40 - 50 $40 - 50 $40 - 50

Other1 $70 - 90 $30 - 50 $30 - 50

30

Setting up for sustained long-term operational excellence

Sustaining capital

1 Includes repowering/life extension and productivity

($M) Coal

Gas and

Renewables Total

Capitalized $215 - 230 $75 - 80 $290 - 310

GWh lost 2,880 - 2,890 420 - 430 3,300 - 3,320

31

2012 Major maintenance plan

Major maintenance

In Progress MW 2011e 2012e Total ($M)

Keephills 1 uprate 23 $5 - 15 $15 - 25 $343

Keephills 2 uprate 23 $10 - 20 $10 - 20 $344

Sun 3 uprate 15 $5 - 10 $15 - 20 $275

New Richmond 68 $20 - 40 $165 - 185 $205

Total 129 $40 - 85 $205 - 250 $300

32

1 Bone Creek capital spend prior to the acquisition was $23M, which does not form part of our total project cost. Spend prior to 2010 was $4M 2 Keephills 3 capital spend prior to 2011 was $929M 3 Keephills 1 uprate spend prior to 2011 was $4M 4 Keephills 2 uprate spend prior to 2011 was $6M 5 Sundance 3 uprate spend prior to 2011 was $3M

Growth capital outlook

All projects tracking on time and on budget

Completed MW 2011e 2012e Total ($M)

Bone Creek 19 $(5) - 0 $521

Keephills 3 225 $70 - 90 $1,010 – 1,0202

Total 244 $65 - 90 $1,062 – 1,072

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2011 2012 2013 2014 2015

Total Portfolio Contractedness

MW

Highly contracted with upside potential

Contracting strategy provides solid downside protection while maintaining

leverage to power price recovery

Adjusted Capacity Upside potential

AB PPA ST Merchant Contracted

LT Contract Open Merchant

2013 2014 2012 2011 2015

95% 86% 77% 70% 65%

2012 Contracted Prices

AB $60 - $65 / MWh

PACNW $50 - $55 / MWh

33

$0

$200

$400

$600

$800

2012 2013 2014 2015 2016 2017 2018 2019 Thereafter PerpetualPrefs

CAD MTN USD Notes

(CDN $M)

1 Based on Sept. 30, 2011 FX rate of $1.03 CAD/US

Debt profile supports balance sheet

Minimal debt refinancing over the short-term provides ample financial flexibility

1

34

Advanced development pipeline

* TransAlta’s ownership

LOCATION PROJECT CAPACITY FUEL TYPE RESOURCE & TURBINE CAPEX RANGE PPA /

MW SITE CONTROL Applied Secured SECURED $ MM LTC

Saskatchewan Mistahay Utin 175 Wind In progress TBD $300 - $350 PPA/LTC

California Black Rock 1-4 117* Geothermal In Progress $500 - $600 PPA/LTC

Alberta Sundance Bridge 1 (Sun 7) 700 Gas-fired TBD $1,200 - $1,400 Merchant

California Black Rock 5-6 117* Geothermal TBD $500 - $600 PPA/LTC

Alberta Sundance Bridge 2 (Sun 8) 700* Gas-fired TBD $1,200 - $1,400 Merchant

Alberta Sundance Bridge 3 (Sun 9) 700* Gas-fired TBD $1,200 - $1,400 Merchant

Alberta Dunvegan 100 Hydro TBD $500 - $600 Merchant

TOTAL MW : 2,609 TOTAL COST: $5.4 B - $6.4 B

2018 - 2019

2021 - 2022

Projects in Advanced Development

TARGET

COMMERCIAL

OPERATION DATE

ENVIRONMENTAL

AND PERMITS

2015

2014 - 2015

TBD

2015 - 2016

2016 - 2017

35