TransAlta announces strong second quarter results; on-track to deliver annual objectives

CALGARY, ALBERTA, Jul 31 (MARKET WIRE) --
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) today reported
comparable earnings for the second quarter 2008 of $49 million ($0.25 per
share) versus $42 million ($0.20 per share) for the same period in 2007.
Net earnings for the second quarter 2008 were $47 million ($0.24)
compared to $57 million ($0.28 per share) in the second quarter 2007.

Improved comparable quarterly results were driven by higher electricity
pricing in Alberta and the Pacific Northwest as well as by an increase in
energy trading gross margins. These gains were partially offset by lower
generation gross margins due to the planned outage at Centralia Thermal
and by higher unplanned outages at Alberta Thermal. Year-over-year, net
earnings were lower primarily due to the lowering of Canadian corporate
tax rates and gains from Centralia asset sales in the second quarter of
2007.

"TransAlta's second quarter results put us on-track to meet our annual
objectives and deliver low double digit comparable earnings per share
growth for the year," said Steve Snyder, President and CEO. "Excellent
performance from our energy trading group and higher pricing in our core
markets helped to offset the higher than normal outages at our Alberta
Thermal units. With the completion of the boiler modification at our
Centralia Thermal unit 2, our outlook for the remainder of the year
remains strong."

In the quarter TransAlta successfully completed a US $500 million
offering of 6.65 per cent senior notes due in 2018. Proceeds from the
issuance are being used for debt repayment, financing of long-term
investments, and general corporate purposes. TransAlta also announced its
$75 million, 53 MW Sundance 5 uprate and the $123 million, 66 MW
expansion of its Summerview wind farm. Both projects will provide
incremental capacity to the Alberta market in 2009 and 2010,
respectively. Including these new projects, TransAlta currently has over
500 MW of new capacity under construction scheduled for completion
between the fourth quarter of 2008 and 2011.

For the six months ended June 30, 2008, comparable earnings increased 51
per cent to $148 million ($0.74 per share) versus $98 million ($0.48 per
share) in the first half of 2007. Net earnings were $80 million ($0.41
per share) versus $113 million ($0.56 per share) in the first half of
2007. Year-to-date net earnings are lower due to the after-tax equity
loss of $65 million related to the write-down of TransAlta's Mexico
business.

Cash flow from operations for the three months ended June 30, 2008 was
$171 million compared to $168 million for the second quarter of 2007. For
the six months ended June 30, 2008, cash flow from operations was $408
million compared to $499 million in the same period of 2007. Cash flow
year-to-date was lower than the previous year due to higher contractually
scheduled PPA revenues from 2006 being carried into the first quarter of
2007.

Fleet availability for the three months ended June 30, 2008 decreased to
79.3 per cent compared to 83.6 per cent in the same period last year
primarily due to the planned outages at Centralia Thermal and Genesee 3,
and the higher than expected unplanned outages at Alberta Thermal.
Year-to-date fleet availability is in line with 2007.

Subsequent Events

On July 18, TransAlta received a non-binding letter from LS Power Equity
Partners and Global Infrastructure Partners regarding engaging in a
dialogue about a possible acquisition of TransAlta for $39 per share in
cash. The Board of Directors issued a press release on July 21 concerning
the letter in which it indicated TransAlta's special committee of
independent directors will carefully consider the letter and will respond
in due course. That process is on-going. The Board is working with
Greenhill & Co. and Goodmans LLP. Once the Board is in a position to
respond to the letter, it will do so through a press release.

On July 23, TransAlta announced the appointment of Mr. Stephen L. Baum to
its Board of Directors. Mr. Baum is the retired Chairman and CEO of
Sempra Energy, a San Diego-based Fortune 500 energy services holding
company formerly known as Enova Corporation. Mr. Baum is a member of the
Board of Directors of Computer Science Corporation and is Chairman of its
Audit Committee. He also is a Senior Advisor to SkyFuel, Inc., a solar
company. Mr. Baum is a graduate of Harvard University and the University
of Virginia Law School. He has also served as a Captain in the U.S.
Marine Corps. A full profile of Mr. Baum is available on TransAlta's
website.

(i) Presenting comparable earnings and gross margin from period to period
is provided to help management and shareholders evaluate earnings trends
more readily in comparison with prior periods' results. An explanation
and reconciliation of these non-GAAP financial measures can be found
beginning on page 22 of the MD&A.

Second Quarter 2008 Highlights:

----------------------------------------------------------------------------
3 months 3 months 6 months 6 months
ended ended ended ended
June 30, June 30, June 30, June 30,
In millions, unless otherwise stated 2008 2007 2008 2007
----------------------------------------------------------------------------
Availability (%) 79.3 83.6 85.5 85.9
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Production (GWh) 10,652 11,497 23,878 24,194
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Revenue ($MM) 708 612 1,511 1,281
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Gross margin ($MM)(1) 376 356 809 734
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Operating income ($MM) (1) 93 91 282 229
----------------------------------------------------------------------------
Net earnings ($MM) 47 57 80 113
----------------------------------------------------------------------------
Comparable earnings ($MM) (1) 49 42 148 98
----------------------------------------------------------------------------
Basic and diluted earnings per share ($) 0.24 0.28 0.41 0.56
----------------------------------------------------------------------------
Comparable earnings per share ($) 0.25 0.20 0.74 0.48
----------------------------------------------------------------------------
Cash flow from operations ($MM) 171 168 408 499
----------------------------------------------------------------------------

(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 22 of the MD&A.

The complete second quarter report for 2008, including Management's
Discussion and Analysis and unaudited financial statements, is available
on the Investors section of our website: www.transalta.com.

TransAlta will hold a conference call and webcast at 9 a.m. Mountain (11
a.m. Eastern) today to discuss second quarter 2008 results. The call will
begin with a short address by Steve Snyder, President and CEO and Brian
Burden, Executive Vice-President and CFO, 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 Calgary participants - (403) 269-4703
For local Toronto participants - (416) 883-7132

Toll-free North American participants - 1-888-205-4499
Participant pass code - 26326#

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 1-877-245-4531 with TransAlta pass code 664306#. 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. We maintain a low-risk profile
by operating a highly contracted portfolio of assets in Canada, the
United States, Mexico and Australia. Our focus is to efficiently operate
our coal-fired, gas-fired, hydro and renewable facilities in order to
provide our customers with a reliable, low-cost source of power. For
nearly 100 years, we've been a responsible operator and a proud
contributor to the communities where we work and live.

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. Note: All financial figures are in
Canadian dollars unless noted otherwise.

Contacts:
TransAlta Corporation - Media inquiries
Michael Lawrence
Senior Advisor, Media Relations
Phone: (403) 267-7330
Email: michael_lawrence@transalta.com

TransAlta Corporation - Investor inquiries
Jennifer Pierce
Vice President, Communications and Investor Relations
Phone: (403) 267-7622 or 1-800-387-3598 in Canada and U.S.
Email: investor_relations@transalta.com

TransAlta Corporation - Investor inquiries
Jess Nieukerk
Manager, Investor Relations
Phone: (403) 267-3607
Email: investor_relations@transalta.com
Website: www.transalta.com

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