Slide 1: Impact of Adopting IFRS
Impact of Adopting IFRS March 24, 2011
Slide 2: Forward looking statements
Forward looking statements This presentation contains forward-looking information related to the impact of adopting International Financial Reporting Standards (IFRS). This information is provided to illustrate the anticipated impact of adopting IFRS on TransAlta’s financial statements based on the
Slide 3: Agenda
Agenda ] Introduction ] Bottom line impacts ] IFRS impact assessment ] Review of financial statement impacts ] Key takeaways ] Q&A 3
Slide 4: Adoption of IFRS - Introduction
Adoption of IFRS - Introduction ] Financial information contained in this presentation is based on TransAlta’s Dec. 31, 2010 CGAAP results adjusted to reflect IFRS in effect as of Jan. 1, 2011 ] This information is subject to audit and possible further changes up to the release of TransAlta’s first
Slide 5: Bottom line impacts – Dec. 31, 2010
Bottom line impacts – Dec. 31, 2010 ] 2010 comparable earnings under IFRS within $0.01 of CGAAP • Reported earnings lower by $0.19 due primarily to timing of impairment charges ] Impact to assets are modest ~ 2% decrease • Primarily due to CE Gen and Wailuku being equity accounted and retrospective
Slide 6: IFRS impact assessment
IFRS impact assessment 38 standards 9 have measureable impacts to TransAlta (summary below), of which 6 are significant 9 require process changes and have disclosure impacts or potential future measurement impacts 20 require no changes as they are converged or not applicable to TransAlta Standard Pr
Slide 7: IFRS Statement of Financial Position As at Dec. 31, 2010
IFRS Statement of Financial Position As at Dec. 31, 2010 ($ millions) CGAAP Adj IFRS* Explanation of Differences (decrease) Cash 58 (23) 35 Equity acounting for our joint ventures (CE Gen and Wailuku) Accounts receivable 428 (16) 412 Equity acounting for our joint ventures Other current assets 374 6
Slide 8: IFRS Statement of Earnings Year ended Dec. 31, 2010
IFRS Statement of Earnings Year ended Dec. 31, 2010 ($ millions, except where noted) CGAAP Adj IFRS* Explanation of Differences (decrease) Revenue 2,819 (146) 2,673 Equity accounting for our joint ventures ($136) and Ft Sask now accounted for as finance lease ($10) Fuel & purchased power 1,202 (17)
Slide 9: IFRS Statement of Cash Flows Year ended Dec. 31, 2010
Statement of comprehensive income IFRS Statement of Cash Flows Year ended Dec. 31, 2010 ($ millions) CGAAP Adj IFRS* Explanation of Differences (decrease) Net earnings (loss) 219 41 260 Asset impairment $49 and financial instruments $4 partially offset by capitalization of MIC ($11) Depreciation 490
Slide 10: Key takeaways
Key takeaways ] IFRS impact on key performance measures and metrics is modest ] IFRS based financial statements will look largely the same but will contain additional disclosure ] Ongoing changes to IFRS and interpretations are inevitable ] The adoption of IFRS does not impact: • our cash flow gener
Slide 11: Appendix
JV os /| =f SS = : ” Tra nsAl ta Appendix Multiple Fuel Sources Singular Value ~™
Slide 12: Presentation differences
Presentation differences ] Differences related to significant changes in the underlying accounting: • Equity accounting re certain JV’s – CE Gen and Wailuku previously proportionately consolidated now equity accounted • Finance lease accounting – Fort Sask removed from PP&E and replaced with a finan
Slide 13: Jan. 1, 2010 IFRS 1 elections
Jan. 1, 2010 IFRS 1 elections ] IFRS 1 is applicable to the first-time adoption of IFRS, with all adjustments impacting the opening balance sheet ] IFRS must be applied retrospectively with restatement of 2010 results ] IFRS 1 provides relief in certain areas through mandatory exemptions and electio
Slide 14: IFRS Statement of Financial Position As at Jan. 1, 2010
IFRS Statement of Financial Position As at Jan. 1, 2010 Joint Asset Financial Employee Bus. ($ millions) CGAAP MIC Leases Ventures Impairm't ARO Instr. Benefits Comb. Other IFRS* Cash 82 (29) 53 Accounts receivable 421 (16) 405 Finance lease receivable - 2 2 Asset held for sale - 4 4 Other current a
Slide 15: IFRS Statement of Financial Position As at Dec. 31, 2010
IFRS Statement of Financial Position As at Dec. 31, 2010 Joint Asset Financial Employee ($ millions) CGAAP MIC Leases Ventures Impairm't ARO Instr. Benefits Other IFRS* Cash 58 (23) 35 Accounts receivable 428 (16) 412 Finance lease receivable - 2 2 Asset held for sale - 60 60 Other current assets 37
Slide 16: IFRS Statement of Earnings Year ended Dec. 31, 2010
IFRS Statement of Earnings Year ended Dec. 31, 2010 CGAAP Joint Asset Financial Employee Bus. IFRS* ($ millions, except where noted) 2010 MIC Leases Ventures Impairm't ARO Instr. Benefits Comb. Other 2010 Revenue 2,819 (10) (136) 2,673 Fuel & purchased power 1,202 (11) (3) (3) 1,185 Gross margin 1,6
Slide 17: IFRS Statement of Cash Flows Year ended Dec. 31, 2010
IFRS Statement of Cash Flows Year ended Dec. 31, 2010 CGAAP Joint Asset Fin. Emp Bus. IFRS* ($ millions) 2010 MIC Leases Ventures Impairm't ARO Instr. Benefits Comb. Other 2010 Net earnings (loss) 219 (11) - 3 46 1 4 (2) (1) 1 260 Depreciation and amortization 490 81 (3) (49) (11) 2 1 511 Gain loss