TransAlta Corporation (NYSE:TAC) Q2 2023 Earnings Conference Call August 4, 2023 11:00 AM ET Company Participants Chiara Valentini - Investor Relations John Kousinioris - President and Chief Executive Officer Todd Stack - EVP, Finance and Chief Financial Officer Conference Call Participants Dariusz Lozny - Bank of America Mark Jarvi - CIBC Ben Pham - BMO Capital Markets Rob Hope - Scotiabank Andrew Kuske - Credit Suisse Naji Baydoun - iA Capital Markets Patrick Kenny - National Bank Financial Chris Varcoe - ...

MANAGEMENT'S DISCUSSION AND ANALYSIS TRANSALTA CORPORATION Management's Discussion and Analysis Second Quarter Report for 2023 This Management's Discussion and Analysis ("MD&A") contains forward-looking statements. These statements are based on certain estimates and assumptions and involve risks and uncertainties. Actual results may differ materially. Refer to the Forward-Looking Statements section of this MD&A for additional information. Table of Contents | M2 Forward-Looking Statements | M29 Financial Ins ...

Financial Data and Key Metrics Changes - TransAlta reported adjusted EBITDA of CAD 503 million, a 94% increase compared to Q1 2022, and free cash flow of CAD 263 million, or CAD 0.98 per share, representing a 145% increase on a per share basis [9][27][28] - The Alberta spot price for power settled at CAD 142 per megawatt hour, significantly higher than last year's CAD 90 [32] - The company expects adjusted EBITDA for 2023 to be in the range of CAD 1.45 billion to CAD 1.55 billion, an increase of 19% at the midpoint compared to prior guidance [27] Business Line Data and Key Metrics Changes - The gas segment generated adjusted EBITDA of CAD 240 million, a 129% improvement over the previous year, driven by stronger production and realized prices [36] - Hydro segment adjusted EBITDA was CAD 106 million, a 74% increase, despite lower production due to outages, offset by higher realized prices [37] - Energy marketing delivered CAD 53 million in gross margin and CAD 39 million in adjusted EBITDA, a 129% increase year-over-year [39] Market Data and Key Metrics Changes - Alberta's market saw stronger power prices due to reduced net imports and increased exports, leading to a 40% increase in production from the Alberta gas fleet compared to the same quarter last year [11] - Forward power prices in Alberta are expected to settle CAD 15 per megawatt hour higher than initial guidance, reflecting strong market conditions [27][26] Company Strategy and Development Direction - The company aims to reach final investment decisions on 500 megawatts of additional clean energy projects in 2023, contributing CAD 75 million to CAD 100 million in incremental EBITDA [48] - TransAlta is focused on expanding its development pipeline by adding 1,500 megawatts of new sites, with a strong emphasis on renewables and storage [24][48] - The company has adopted a more ambitious CO2 emissions reduction target of 75% by 2026 from 2015 levels, with a commitment to net-zero by 2045 [50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance in Q1 and the improved market expectations for the rest of the year, leading to increased financial guidance [27][49] - The company acknowledged challenges in the development environment, including permitting delays and rising costs, but remains disciplined in capital allocation [71][72] Other Important Information - TransAlta returned CAD 36 million to shareholders through share buybacks in Q1 and continued to buy back shares in April, with plans to renew its normal course issuer bid [15][16] - The company has secured 800 megawatts of growth projects across Canada, the US, and Australia, representing 40% of its 2 gigawatt target by 2025 [17] Q&A Session Summary Question: On the updated guidance regarding Alberta spot prices and EBITDA - Management confirmed that there is asymmetry to the upside in capturing margins when pricing is strong, which was evident in Q1 results [55][56] Question: Regarding capital allocation priorities - The company maintains a framework where 40% to 50% of deconsolidated funds from operations are focused on growth capital, debt reductions, and share buybacks [61] Question: On hydro hedging strategy - Management indicated that while hydro is typically left more open, opportunistic hedging was employed this quarter due to favorable market conditions [65][66] Question: Challenges in progressing towards the 500 megawatt target - Management acknowledged challenges such as permitting delays and increased costs but emphasized a disciplined approach to project development [70][72] Question: On the Tent Mountain project and federal budget impacts - The Tent Mountain project is still in early stages, with expectations for it to be a 2026 project, and the federal budget is seen as supportive for financing [86][87] Question: Alberta gas performance and export sales - Elevated output was attributed to both export sales into the Mid-C area and reduced capacity on imports, with expectations for this trend to continue [81][82] Question: On M&A opportunities and gas assets - The company remains active in exploring M&A opportunities, focusing on contracted renewables and existing operating assets, including gas if they fit the portfolio [105][108]

MANAGEMENT'S DISCUSSION AND ANALYSIS TRANSALTA CORPORATION Management's Discussion and Analysis First Quarter Report for 2023 This Management's Discussion and Analysis ("MD&A") contains forward-looking statements. These statements are based on certain estimates and assumptions and involve risks and uncertainties. Actual results may differ materially. Refer to the Forward-Looking Statements section of this MD&A for additional information. Table of Contents M2 Forward-Looking Statements M26 Financial Instrume ...

Financial Performance & Outlook - TransAlta achieved an Adjusted EBITDA of $1634 million in 2022 [31], and projects an Adjusted EBITDA of $1200 to $1320 million for 2023 [3, 20] - The company aims to deliver Free Cash Flow (FCF) between $560 to $660 million in 2023 [51] - 54% of TransAlta's generation EBITDA came from renewable sources [27] - TransAlta Renewables projects an Adjusted EBITDA of $230 to $270 million and CAFD of $495 to $535 million for 2023 [38] Development & Growth - TransAlta plans to expand its development pipeline by adding 1,500 MW of development sites [3] - The company has projects under construction totaling approximately $14 billion [18] - TransAlta is targeting 40% female employees by 2030 [3, 43] - The company is targeting $315 million EBITDA from projects under construction [48] Emissions Reduction - TransAlta aims to accelerate CO2 emissions reduction to 75% from 2015 levels by 2026 [10, 51] and achieve net-zero emissions by 2045 [10]

TransAlta Corporation (NYSE:TAC) Q4 2022 Earnings Conference Call February 23, 2023 11:00 AM ET Company Participants Chiara Valentini - Vice President, Strategic Finance and IR John Kousinioris - President and CEO Todd Stack - Executive Vice President, Finance and CFO Kerry O'Reilly Wilks - Executive Vice President, Legal, Commercial and External Affairs Conference Call Participants Mark Darby - CIBC Capital Markets Maurice Choy - RBC Capital Markets Rob Hope - Scotiabank Patrick Kenny - National Bank John ...

[Introductory Messages](index=4&type=section&id=Introductory%20Messages) The introductory messages highlight the company's exceptional 2022 performance, strategic transition to renewables, and commitment to long-term value creation [President's Message](index=4&type=section&id=President%27s%20Message) President and CEO John Kousinioris highlights 2022 as a year of exceptional performance, driven by the successful execution of the Clean Electricity Growth Plan - The company's strategy focuses on capitalizing on cash flow from its legacy fleet to fund the expansion and diversification of its contracted renewables fleet[7](index=7&type=chunk) - TransAlta has accelerated its decarbonization goal, adopting a net-zero by 2045 target, having already reduced GHG emissions by **68%** since 2015, contributing to approximately **10%** of Canada's Paris Agreement target[9](index=9&type=chunk) - The Clean Electricity Growth Plan's capital target was increased from **$3 billion** to **$3.6 billion** due to inflation, with the corresponding EBITDA target also raised from **$250 million** to **$315 million**, reflecting higher PPA prices[17](index=17&type=chunk) - The company increased its annual dividend by **10%** to **$0.22 per share**, starting in January 2023, and returned **$54 million** to shareholders through share buybacks in 2022[14](index=14&type=chunk) 2022 Key Performance Highlights | Metric | 2022 Value | Change vs 2021 | | :--- | :--- | :--- | | Free Cash Flow per Share | $3.55 | 64% Increase | | Fleet-wide Availability | 90.0% | 3.4 percentage points increase | | Total Recordable Injury Frequency (TRIF) | 0.39 | Best ever result | [Message from the Chair](index=7&type=section&id=Message%20from%20the%20Chair) Chair of the Board John P Dielwart commends the management team for delivering the best year in the company's operating history in 2022 - 2022 was reported as the best year in the company's operating history, with unprecedented performance and exceptional free cash flow[30](index=30&type=chunk) - The company has materially reduced corporate-level debt, expanded its renewable portfolio, and retired or converted all Canadian coal assets to natural gas, eight years ahead of the government mandate[30](index=30&type=chunk) - The capital allocation strategy involves deploying cash flows from the legacy merchant thermal and hydro fleet toward contracted renewables to pivot the company and create long-term value[31](index=31&type=chunk) [Company Profile](index=8&type=section&id=Company%20Profile) This section details TransAlta's identity as a major power generator, its strategic direction for renewable growth, and its execution approach [Who We Are](index=8&type=section&id=Who%20We%20Are) TransAlta is a major Canadian power generator with a diversified portfolio of hydro, wind, solar, and natural gas assets across Canada, the United States, and Australia TransAlta at a Glance (2022) | Metric | Value | | :--- | :--- | | Enterprise Value | $8.9 billion | | Market Capitalization | $3.3 billion | | Diversified Portfolio | ~6,600 MW | | Generating Facilities | 72 | | Generation Experience | 111 years | | Employees | Over 1,200 | | Growth Pipeline | ~4+ GW | Financial Highlights (2018-2022) | Metric ($ millions) | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | 1,634 | 1,286 | 917 | 1,123 | 984 | | Free Cash Flow | 961 | 585 | 348 | 524 | 435 | | Earnings (Loss) Before Income Taxes | 353 | (380) | (303) | 193 | (96) | | Cash Flow from Operating Activities | 877 | 1,001 | 702 | 849 | 820 | 2022 Adjusted EBITDA from Generation by Fuel Type | Fuel Type | Adjusted EBITDA ($ millions) | Percentage of Total | | :--- | :--- | :--- | | Gas | 629 | 39% | | Hydro | 527 | 32% | | Wind and Solar | 311 | 19% | | Energy Marketing | 183 | 11% | | Energy Transition | 86 | 5% | [Where We Are Going](index=16&type=section&id=Where%20We%20Are%20Going) TransAlta is executing its Clean Electricity Growth Plan with clear targets for 2025, including adding **2 GW** of renewable capacity through a **$3.6 billion** investment Clean Electricity Growth Plan Targets (2021-2025) | Metric | 2025 Goal | | :--- | :--- | | Renewables Growth | 2 GW | | Growth Capital | $3.6 Billion | | Incremental Adjusted EBITDA | $315 Million | | Development Pipeline | 5 GW | [How We Are Doing It](index=18&type=section&id=How%20We%20Are%20Doing%20It) The company's strategy is centered on renewable electricity growth and a strong commitment to sustainability, underscored by specific ESG targets - The company has adopted a net-zero by 2045 target and is on track to achieve a **75%** reduction in CO2 emissions by 2026 from 2015 levels[79](index=79&type=chunk) - TransAlta plans to deploy **$3.6 billion** of growth capital by the end of 2025 to add **2 GW** of new renewables capacity[79](index=79&type=chunk) Progress on Key ESG Targets (as of 2022) | Area | Metric | 2030 Goal | 2022 Status | | :--- | :--- | :--- | :--- | | Environment | GHG Emissions Reduction (vs 2015) | 75% (by 2026) | 68% | | Social | Women in Workforce | 40% | 26% | | Governance | Women on Board | 50% | 36% | [Management's Discussion and Analysis (MD&A)](index=20&type=section&id=Management%27s%20Discussion%20and%20Analysis) This section provides a comprehensive analysis of the company's financial performance, strategic initiatives, and future outlook for 2022 [Highlights](index=24&type=section&id=Highlights) In 2022, TransAlta exceeded its financial guidance, driven by exceptional performance across all generation segments and the Energy Marketing segment - Adjusted EBITDA increased by **$348 million** year-over-year, driven by strong performance from the Alberta portfolio, incremental production from new facilities, higher ancillary service revenues, and lower carbon compliance costs[113](index=113&type=chunk) - Free Cash Flow (FCF) increased by **$376 million** to **$961 million**, primarily due to higher adjusted EBITDA and a decrease in sustaining capital spending[117](index=117&type=chunk) Consolidated Financial Highlights | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Adjusted EBITDA ($M) | 1,634 | 1,286 | | Free cash flow ($M) | 961 | 585 | | Net earnings (loss) attributable to common shareholders ($M) | 4 | (576) | | Cash flow from operating activities ($M) | 877 | 1,001 | | Adjusted availability (%) | 90.0 | 86.6 | [Significant and Subsequent Events](index=27&type=section&id=Significant%20and%20Subsequent%20Events) Key strategic developments included the acquisition of a **50%** interest in the Tent Mountain pumped hydro project, the issuance of **US$400 million** in Senior Green Bonds, and a **10%** increase in the common share dividend - The company acquired a **50%** interest in the Tent Mountain Renewable Energy Complex, an early-stage **320 MW** pumped hydro energy storage project in Alberta[123](index=123&type=chunk) - Issued **US$400 million** in Senior Green Bonds with a **7.75%** coupon, maturing in 2029, with proceeds allocated to eligible green projects[127](index=127&type=chunk)[129](index=129&type=chunk) - The Board of Directors approved a **10%** increase in the common share dividend, raising the annualized dividend to **$0.22 per share** effective January 1, 2023[130](index=130&type=chunk) - The rehabilitation plan for the Kent Hills 1 and 2 wind facilities was announced, with PPAs extended to December 2045, and the project targeted for completion in the second half of 2023[142](index=142&type=chunk)[173](index=173&type=chunk) [Segmented Financial Performance and Operating Results](index=30&type=section&id=Segmented%20Financial%20Performance%20and%20Operating%20Results) In 2022, all generation segments demonstrated strong performance, with Hydro, Gas, and Wind and Solar segments showing significant adjusted EBITDA increases [Hydro](index=30&type=section&id=Hydro) The Hydro segment's adjusted EBITDA surged by **$205 million** due to higher merchant pricing in Alberta, higher production, and increased ancillary service prices - Adjusted EBITDA for 2022 increased by **$205 million** compared to 2021, primarily due to higher merchant prices, higher production, and higher ancillary service prices and volumes in the Alberta market following the expiration of the Alberta PPA[156](index=156&type=chunk)[159](index=159&type=chunk) Hydro Segment Performance | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Production (GWh) | 1,988 | 1,936 | | Revenues ($M) | 607 | 383 | | Adjusted EBITDA ($M) | 527 | 322 | [Wind and Solar](index=31&type=section&id=Wind%20and%20Solar) The Wind and Solar segment saw a **$49 million** increase in adjusted EBITDA from new assets and favorable pricing, despite an extended outage at Kent Hills - Adjusted EBITDA increased by **$49 million** in 2022, driven by higher production from new facilities (Windrise and North Carolina Solar), higher merchant pricing in Alberta, and liquidated damages from the Windrise facility, partially offset by the extended outage at the Kent Hills facilities[166](index=166&type=chunk) - The rehabilitation of the Kent Hills 1 and 2 wind facilities is underway, with an estimated capital cost of **$120 million** and a target completion in the second half of 2023, with the outage resulting in approximately **$3 million** per month of foregone revenue[172](index=172&type=chunk)[173](index=173&type=chunk) Wind and Solar Segment Performance | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Production (GWh) | 4,248 | 3,898 | | Revenues ($M) | 407 | 348 | | Adjusted EBITDA ($M) | 311 | 262 | [Gas](index=33&type=section&id=Gas) The Gas segment's adjusted EBITDA grew by **$141 million**, benefiting from strong Alberta prices and lower carbon costs, partially offset by higher natural gas prices - Adjusted EBITDA increased by **$141 million** in 2022, mainly due to capturing higher realized energy prices in Alberta, higher Ontario merchant pricing, and lower carbon compliance costs, partially offset by higher natural gas prices and consumption[179](index=179&type=chunk) Gas Segment Performance | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Production (GWh) | 11,448 | 10,565 | | Revenues ($M) | 1,521 | 1,126 | | Adjusted EBITDA ($M) | 629 | 488 | [Energy Transition](index=34&type=section&id=Energy%20Transition) The Energy Transition segment's EBITDA declined by **$47 million** due to coal asset retirements, partially offset by higher prices and production at the Centralia facility - Adjusted EBITDA decreased by **$47 million** in 2022, primarily due to the retirement of the Alberta coal assets (Keephills Unit 1 and Sundance Unit 4), partially offset by higher prices and production at the Centralia facility and lower carbon costs in Alberta[191](index=191&type=chunk) Energy Transition Segment Performance | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Production (GWh) | 3,574 | 5,706 | | Revenues ($M) | 724 | 728 | | Adjusted EBITDA ($M) | 86 | 133 | [Energy Marketing](index=35&type=section&id=Energy%20Marketing) The Energy Marketing segment exceeded expectations with a **$17 million** increase in adjusted EBITDA due to successful short-term trading across volatile North American markets - Adjusted EBITDA increased by **$17 million** in 2022, exceeding expectations due to successful short-term trading of physical and financial power and gas products across volatile North American markets[197](index=197&type=chunk) Energy Marketing Segment Performance | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Adjusted EBITDA ($M) | 183 | 166 | [Alberta Electricity Portfolio](index=37&type=section&id=Alberta%20Electricity%20Portfolio) The Alberta portfolio, constituting **52%** of the company's gross installed capacity, significantly benefited from strong market conditions in 2022 - The average Alberta power pool price increased from **$102/MWh** in 2021 to **$162/MWh** in 2022, driven by higher demand, and higher natural gas and carbon prices[216](index=216&type=chunk)[218](index=218&type=chunk) - Gross margin for the Alberta Electricity Portfolio increased by **$319 million** to **$1,177 million** in 2022, as higher realized power prices offset higher fuel costs[222](index=222&type=chunk) Alberta Portfolio Key Metrics | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Realized merchant power price per MWh | $126 | $91 | | Hedged volume (GWh) | 7,228 | 6,992 | | Hedged power price average per MWh | $86 | $72 | | Fuel and purchased power per MWh | $60 | $38 | | Carbon compliance cost per MWh | $9 | $16 | [Financial Position](index=45&type=section&id=Financial%20Position) As of December 31, 2022, TransAlta's total assets increased by **$1.5 billion** to **$10.7 billion**, while total liabilities rose by **$2.1 billion** to **$8.8 billion** - Working capital increased year-over-year mainly due to the reclassification of the Kent Hills Bonds from current to long-term liabilities and the repayment of **US$400 million** of senior notes due in 2022[265](index=265&type=chunk) Consolidated Statement of Financial Position Summary | ($ millions) | Dec. 31, 2022 | Dec. 31, 2021 | | :--- | :--- | :--- | | Total current assets | 3,714 | 2,197 | | Total non-current assets | 7,027 | 7,029 | | **Total assets** | **10,741** | **9,226** | | Total current liabilities | 2,888 | 1,931 | | Total non-current liabilities | 5,864 | 4,702 | | **Total liabilities** | **8,752** | **6,633** | | **Total equity** | **1,989** | **2,593** | [Financial Capital](index=47&type=section&id=Financial%20Capital) The company maintained a strong financial position in 2022, with credit ratings reaffirmed by major agencies, and total consolidated net debt at **$2.85 billion** - Credit ratings were reaffirmed in 2022: Moody's (Ba1, stable), DBRS Morningstar (BBB low, stable), and S&P Global Ratings (BB+, stable)[271](index=271&type=chunk) - The company has **$2.1 billion** in liquidity, including **$1.1 billion** in cash and **$1.2 billion** available under committed credit facilities[429](index=429&type=chunk)[281](index=281&type=chunk) Capital Structure Summary | As at Dec. 31 ($ millions) | 2022 | 2021 | | :--- | :--- | :--- | | Total consolidated net debt | 2,854 | 2,636 | | Equity attributable to shareholders | 1,110 | 1,582 | | Non-controlling interests | 879 | 1,011 | | **Total capital** | **5,243** | **5,629** | [2023 Outlook](index=72&type=section&id=2023%20Outlook) For 2023, TransAlta anticipates strong but moderated financial performance compared to the exceptional results of 2022 - The outlook reflects lower expected pricing in Alberta due to normalized weather and new supply additions, partially offset by contributions from new projects like Garden Plain wind and the full return of the Kent Hills facilities in H2 2023[409](index=409&type=chunk)[416](index=416&type=chunk) 2023 Financial Outlook vs. 2022 Actuals | Measure | 2023 Target | 2022 Actuals | | :--- | :--- | :--- | | Adjusted EBITDA | $1,200M - $1,320M | $1,634M | | Free Cash Flow (FCF) | $560M - $660M | $961M | | Dividend | $0.22/share annualized | $0.20/share annualized | Key 2023 Market Assumptions | Market | 2023 Price Assumption | | :--- | :--- | | Alberta Spot Price | $105 - $135 / MWh | | Mid-C Spot Price | US$75 - US$85 / MWh | | AECO Gas Price | $4.60 / GJ | [Strategy and Capability to Deliver Results](index=76&type=section&id=Strategy%20and%20Capability%20to%20Deliver%20Results) TransAlta's strategy is centered on its Clean Electricity Growth Plan, aiming to add **2 GW** of renewable capacity by 2025 with a **$3.6 billion** investment - Projects currently under construction total **678 MW** and include Garden Plain (Wind, AB), White Rock (Wind, OK), Horizon Hill (Wind, OK), Northern Goldfields (Solar, WA), and Mount Keith (Transmission, WA)[16](index=16&type=chunk)[445](index=445&type=chunk) - The company has **374 MW** of advanced-stage development projects, including wind, gas, and battery storage, and an early-stage pipeline of **3.9 GW** to **5.0 GW**[442](index=442&type=chunk)[450](index=450&type=chunk)[451](index=451&type=chunk) Clean Electricity Growth Plan (2021-2025) | Target | Goal | % Achieved (as of Feb 2023) | | :--- | :--- | :--- | | Renewable Energy Capacity | 2 GW | 40% | | Capital Investment | $3.6 Billion | 41% | | Incremental Average Annual EBITDA | $315 Million | 47% | [Environment, Social and Governance (ESG)](index=89&type=section&id=Environment%2C%20Social%20and%20Governance%20%28ESG%29) TransAlta has formalized its commitment to sustainability by adopting a net-zero by 2045 target and developing a comprehensive Climate Transition Plan - The company has adopted a new, more ambitious target to achieve net-zero for **100%** of its scope 1 and 2 GHG emissions by 2045[537](index=537&type=chunk)[545](index=545&type=chunk) - A formal Climate Transition Plan has been developed, outlining actions to reduce operational and value chain emissions, supported by sustainable finance and an inclusive transition framework[571](index=571&type=chunk) - In 2022, the company achieved its 2026 targets for reducing air emissions (SO2 and NOx) and fleet-wide water consumption, four years ahead of schedule[547](index=547&type=chunk)[551](index=551&type=chunk) Climate-Related Financial Metrics ($ millions) | Year ended Dec. 31 | 2022 | 2021 | | :--- | :--- | :--- | | Capital expenditures for renewable energy generation | 666 | 326 | | Renewable energy adjusted EBITDA | 838 | 584 | | Environmental attribute sales revenue | 53 | 40 | | Renewable energy adjusted revenue | 1,014 | 731 | [Consolidated Financial Statements](index=151&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's audited financial statements, including the auditor's report, core statements, and detailed notes [Auditor's Report and Management's Report](index=151&type=section&id=Auditor%27s%20Report%20and%20Management%27s%20Report) This section includes management's assertion of responsibility for the financial statements and internal controls, followed by the independent auditor's report from Ernst & Young LLP - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the company's internal control over financial reporting[968](index=968&type=chunk)[978](index=978&type=chunk) - Critical Audit Matters identified by the auditor include the valuation of long-lived assets and goodwill for certain renewable energy CGUs, and the valuation of Level III derivative instruments due to significant estimation uncertainty and judgment[984](index=984&type=chunk)[986](index=986&type=chunk) [Core Financial Statements](index=158&type=section&id=Core%20Financial%20Statements) The core financial statements present the company's performance for the years 2020-2022, showing revenues of **$2.98 billion** and net earnings of **$161 million** in 2022 Consolidated Statement of Earnings (Loss) Summary | ($ millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Revenues | 2,976 | 2,721 | 2,101 | | Gross margin | 1,635 | 1,489 | 1,133 | | Operating income (loss) | 531 | (239) | (88) | | Net earnings (loss) | 161 | (425) | (253) | | Net earnings (loss) attributable to common shareholders | 4 | (576) | (336) | Consolidated Statement of Financial Position Summary | As at Dec. 31 ($ millions) | 2022 | 2021 | | :--- | :--- | :--- | | Total assets | 10,741 | 9,226 | | Total liabilities | 8,752 | 6,633 | | Total equity | 1,989 | 2,593 | Consolidated Statement of Cash Flows Summary | ($ millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Cash flow from operating activities | 877 | 1,001 | 702 | | Cash flow used in investing activities | (741) | (472) | (687) | | Cash flow from (used in) financing activities | 45 | (282) | 272 | [Notes to Consolidated Financial Statements](index=163&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures that support the primary financial statements, covering accounting policies, segment performance, and financial instruments - Asset impairment charges were significantly lower in 2022 at **$9 million**, compared to **$648 million** in 2021, which was impacted by decisions to suspend the Sundance Unit 5 repowering and retire other coal units[1162](index=1162&type=chunk)[1169](index=1169&type=chunk) - The company adjusted the useful lives of certain Gas segment assets in 2022, resulting in a **$132 million** increase in depreciation expense for the year[1354](index=1354&type=chunk) - As of Dec 31, 2022, the company had total contractual commitments of approximately **$8.3 billion**, including long-term debt, interest, operating leases, and purchase obligations[1515](index=1515&type=chunk)[1318](index=1318&type=chunk) [Supplementary Information and Appendices](index=252&type=section&id=Supplementary%20Information%20and%20Appendices) This section provides additional financial and operational data, sustainability performance indicators, and corporate information for stakeholders [Eleven-Year Financial and Statistical Summary](index=252&type=section&id=Eleven-Year%20Financial%20and%20Statistical%20Summary) This section provides a high-level summary of key financial and operational data spanning from 2012 to 2022, highlighting major trends in revenues, earnings, and assets Key Metrics (2020-2022) | ($ millions, except where noted) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Revenues | 2,976 | 2,721 | 2,101 | | Net earnings (loss) attributable to common shareholders | 4 | (576) | (336) | | Total assets | 10,741 | 9,226 | 9,747 | | Cash flow from operating activities | 877 | 1,001 | 702 | | Adjusted EBITDA | 1,634 | 1,286 | 917 | | Total generating capacity (MW) | 6,650 | 7,387 | 8,265 | [Plant Summary](index=255&type=section&id=Plant%20Summary) This provides a detailed inventory of TransAlta's generating assets as of December 31, 2022, listing each facility by type, location, capacity, and ownership Gross Installed Capacity by Fuel Type (MW) | Fuel Type | Gross Installed Capacity (MW) | | :--- | :--- | | Gas | 3,084 | | Wind & Battery Storage | 1,906 | | Hydro | 922 | | Energy Transition (Coal) | 671 | | Solar | 143 | | **Total** | **6,726** | [Sustainability Performance Indicators](index=257&type=section&id=Sustainability%20Performance%20Indicators) This section presents a detailed breakdown of the company's ESG performance data for 2020-2022, covering environmental, social, and governance metrics Key Sustainability Metrics | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total GHG emissions (tonnes CO2e) | 10,248,000 | 12,505,000 | 16,361,000 | | Water consumption (million m³) | 20 | 30 | 40 | | Total Recordable Injury Frequency (TRIF) | 0.39 | 0.82 | 0.81 | | Women in workforce (%) | 26 | 24 | 21 | | Women on Board of Directors (%) | 36 | 42 | 45 | [Shareholder and Corporate Information](index=269&type=section&id=Shareholder%20and%20Corporate%20Information) This section provides essential information for shareholders, including details on dividend declarations, stock performance charts, and contact information - Common share dividends were declared at **$0.050 per share** for the first three quarters of 2022 and increased to **$0.055 per share** for the dividend payable January 1, 2023[1610](index=1610&type=chunk) - A chart comparing a **$100** investment in TransAlta versus the S&P/TSX Composite Index over ten years shows TransAlta's value at **$120** and the index at **$186** at the end of 2022, assuming dividend reinvestment[1621](index=1621&type=chunk)

Financial Data and Key Metrics Changes - TransAlta Corporation reported adjusted EBITDA of CAD 555 million for Q3 2022, a 38% increase compared to the prior period, driven by strong performance in the Alberta Electricity portfolio [7] - Free cash flow for the quarter was CAD 393 million, or CAD 1.45 per share, representing an 87% increase quarter-over-quarter [8] - Year-to-date adjusted EBITDA reached CAD 1.1 billion, a 5% increase over 2021, with free cash flow per share of CAD 2.38, a 28% increase year-over-year [8][27] - The company revised its 2022 financial guidance upwards, increasing adjusted EBITDA and free cash flow guidance by CAD 295 million and CAD 245 million respectively [8][30] Business Line Data and Key Metrics Changes - The hydro segment delivered adjusted EBITDA of CAD 245 million in Q3 2022, nearly tripling from CAD 82 million in Q3 2021, driven by stronger realized pricing and higher volumes [23] - Adjusted EBITDA from the gas segment increased by 26% due to high availability and stronger merchant pricing in Alberta [24] - The Energy Transition segment saw a decrease in adjusted EBITDA by CAD 4 million year-over-year, attributed to the retirement of certain units, partially offset by improved performance from the Centralia facility [24] Market Data and Key Metrics Changes - The average pool price for electricity in Alberta for Q3 2022 was CAD 221 per megawatt hour, compared to CAD 100 per megawatt hour in Q3 2021, influenced by high electricity demand and natural gas prices [19] - The hydro fleet realized merchant prices of CAD 246 per megawatt hour, an 11% premium over the average spot price [21] - The gas fleet generated CAD 290 million in revenue, with a blended realized price of CAD 146 per megawatt hour [20] Company Strategy and Development Direction - The company aims to continue delivering clean electricity solutions and is focused on securing 400 megawatts of clean electricity projects across Canada, the U.S., and Australia [36] - TransAlta is actively expanding its development pipeline, with a focus on renewables and storage, and is progressing on various projects including the rehabilitation of Kent Hills wind facilities [37] - The company is committed to achieving a 75% reduction in CO2 emissions by 2026 from 2015 levels and is focused on equity, diversity, and inclusion initiatives [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, expecting a constructive year with average prices in the Alberta power market projected around CAD 119, with Q1 showing particularly strong pricing [48] - The company is not overly concerned about political interference in the market, emphasizing the importance of a long-term view on pricing [49] - Management highlighted the need for a balanced approach to decarbonization, including carbon capture and storage (CCS) as part of the long-term strategy [66] Other Important Information - The Board of Directors approved a common share dividend increase of 10%, marking the fourth consecutive annual increase [9] - The company returned CAD 16 million to shareholders through share buybacks during the quarter, with a total of CAD 34 million in buybacks for 2022 [12] - TransAlta Renewables delivered CAD 88 million of adjusted EBITDA, below expectations due to low wind resources and extended outages [32] Q&A Session Summary Question: Capital Allocation Strategy - Management indicated that higher cash flow will be allocated towards dividends, share buybacks, and ongoing growth projects, with a focus on maintaining a strong balance sheet [44][45] Question: 2023 Pricing Outlook - Management expressed optimism for 2023, with expected strong pricing in Q1 and a constructive overall market outlook [48] Question: Growth Pipeline and M&A - The internal development pipeline is expected to meet growth targets, with M&A considered to supplement growth rather than as a primary strategy [56] Question: Carbon Capture and Storage Opportunities - Management acknowledged the importance of CCS in achieving decarbonization goals and is monitoring developments in government policy [66] Question: Kent Hills Rehabilitation Update - The priority is to rehabilitate Kent Hills wind facilities, with expectations for turbines to return to service by mid-2023 [69] Question: Hydro Plant Ownership and Performance - Management provided details on the Brookfield deal, indicating that the hydro fleet's performance this year may affect ownership stakes [92][94]

TransAlta Corporation (NYSE:TAC) Q2 2022 Earnings Conference Call August 6, 2022 11:00 AM ET Company Representatives John Kousinioris - President, Chief Executive Officer Todd Stack - EVP Finance, Chief Financial Officer Kerry OÂ'Reilly Wilks - EVP, Legal, Commercial, External Affairs Chiara Valentini - VP, Strategic Finance & IR Conference Call Participants Mark Jarvi - CIBC Capital Markets John Mould - TD Securities Maurice Choy - RBC Capital Markets Dariusz Lozny - Bank of America Ben Pham - BMO Andrew K ...

transalta® Q2 2022 Results August 5, 2022 2 Disclaimer and Forward-Looking Statements This presentation includes "forward-looking information" within the meaning of applicable Canadian securities laws, and "forward-looking statements" within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as "forward-looking statements"). All forward-looking statements are based on the beliefs as well as as ...