TRANSALTA CORPORATION Management's Discussion and Analysis Second Quarter Report for 2022 Management's Discussion and Analysis 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. See the Forward-Looking Statements section of this MD&A for additional information. Table of Contents This MD&A should be read in conjunction with the unaudit ...

TransAlta Corporation (NYSE:TAC) Q1 2022 Earnings Conference Call May 6, 2022 11:00 AM ET Company Participants Chiara Valentini - VP, Strategic Finance & IR John Kousinioris - President and CEO Todd Stack - EVP, Finance and CFO Kerry O'Reilly Wilks - EVP, Legal Commercial and External Affairs Conference Call Participants Dariusz Lozny - Bank of America Rob Hope - Scotiabank Mark Jarvi - CIBC John Mould - TD Securities Andrew Kuske - Credit Suisse Maurice Choy - RBC Naji Baydoun - iA Capital Markets Operator ...

TransAlta Q1 2022 Results MAY 6, 2022 TransAlta 1 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 assumptions ...

[Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section details the company's forward-looking statements, associated assumptions, and material risk factors - This section outlines the forward-looking statements within the MD&A, which are based on management's current estimates and assumptions, and cautions that actual results may differ materially[3](index=3&type=chunk) - Key forward-looking topics include the Clean Electricity Growth Plan, projects under construction, remediation of Kent Hills facilities, carbon compliance costs, and the **2022 financial outlook**[4](index=4&type=chunk) - The statements are based on assumptions such as Alberta spot prices of **$90-$100/MWh** and Mid-Columbia spot prices of **US$55-$65/MWh** for 2022[5](index=5&type=chunk) - Significant risks include the COVID-19 pandemic, market price fluctuations, operational risks like unplanned outages, and equipment failure, such as the issues at the **Kent Hills wind facilities**[6](index=6&type=chunk) [Description of the Business](index=4&type=section&id=Description%20of%20the%20Business) The company operates a diversified power generation portfolio across multiple regions and fuel types - TransAlta is a major Canadian power generator with a diversified portfolio of assets using **water, wind, solar, and natural gas**[9](index=9&type=chunk) Consolidated Facility Ownership as of March 31, 2022 | Region | Fuel Type | Gross Installed Capacity (MW) | Number of Facilities | Weighted Average Contract Life (Years) | | :--- | :--- | :--- | :--- | :--- | | **Alberta** | Hydro, Wind, Solar | 1,470 | 30 | 2 (primarily merchant) | | | Gas & Energy Transition | 2,073 | 8 | | | **Canada (Excl. Alberta)** | Hydro, Wind, Solar, Gas | 1,487 | 21 | 7 | | **US** | Wind, Solar, Gas, Energy Transition | 1,219 | 10 | 7 | | **Australia** | Gas | 450 | 6 | 17 | | **Total** | **All** | **6,699** | **75** | **5** | [Highlights](index=5&type=section&id=Highlights) The company's Q1 2022 performance shows a significant increase in net earnings despite lower adjusted EBITDA and FCF Q1 2022 vs Q1 2021 Financial Highlights | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Revenues | $735M | $642M | | Adjusted EBITDA | $266M | $310M | | Net earnings attributable to common shareholders | $186M | ($30M) | | Cash flow from operating activities | $451M | $257M | | Free cash flow (FCF) | $115M | $129M | | Net earnings per share, basic and diluted | $0.69 | ($0.11) | - **Adjusted EBITDA decreased by $44 million** to $266 million, largely due to lower performance in the Gas, Energy Transition, Hydro, and Energy Marketing segments[26](index=26&type=chunk) - **Net earnings attributable to common shareholders increased significantly to $186 million** from a loss of $30 million, driven by higher revenues and lower carbon compliance costs[27](index=27&type=chunk) - **Free Cash Flow (FCF) decreased by $14 million** to $115 million, primarily due to lower adjusted EBITDA and higher distributions to non-controlling interests[29](index=29&type=chunk) [Significant and Subsequent Events](index=7&type=section&id=Significant%20and%20Subsequent%20Events) Key strategic developments include new project PPAs, contract extensions, and an ESG rating upgrade - Key developments include the **Mount Keith Transmission Expansion**, **Sarnia Contract Extensions**, a new **PPA for the Garden Plain Wind** project, a long-term **PPA with Meta for the Horizon Hill Wind Project**, an **MSCI ESG Rating Upgrade to 'A'**, and the repurchase of **1.4 million common shares**[31](index=31&type=chunk)[32](index=32&type=chunk)[37](index=37&type=chunk) [Performance by Segment](index=8&type=section&id=Performance%20by%20Segment%20with%20Supplemental%20Geographical%20Information) This section analyzes the financial and operational performance across the company's realigned business segments [Alberta Electricity Portfolio](index=9&type=section&id=Alberta%20Electricity%20Portfolio) The Alberta portfolio's gross margin declined due to weaker market conditions and higher natural gas costs Alberta Electricity Portfolio Performance (Q1 2022 vs Q1 2021) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Total Production (GWh) | 2,576 | 2,914 | | Revenues | $275M | $301M | | Gross Margin | $161M | $180M | Key Alberta Market Metrics (Q1 2022 vs Q1 2021) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Spot power price average ($/MWh) | $90 | $95 | | Natural gas price (AECO) ($/GJ) | $4.50 | $2.89 | | Realized merchant power price ($/MWh) | $107 | $103 | | Fuel and purchased power ($/MWh) | $56 | $35 | | Carbon compliance cost ($/MWh) | $9 | $19 | - **Carbon compliance costs per MWh decreased significantly from $19 to $9**, primarily due to the shift from coal to natural gas, despite an increase in the carbon tax price[55](index=55&type=chunk) [Segmented Financial Performance and Operating Results](index=11&type=section&id=Segmented%20Financial%20Performance%20and%20Operating%20Results) Overall adjusted EBITDA declined, driven by lower results in most segments except for Wind and Solar - The company realigned its operating segments in Q4 2021 to reflect its strategic focus on clean energy, creating new **'Gas' and 'Energy Transition' segments**[57](index=57&type=chunk)[58](index=58&type=chunk) Adjusted EBITDA by Segment (Q1 2022 vs Q1 2021) | Segment | Q1 2022 Adjusted EBITDA | Q1 2021 Adjusted EBITDA | | :--- | :--- | :--- | | Hydro | $61M | $77M | | Wind and Solar | $89M | $76M | | Gas | $102M | $106M | | Energy Transition | $5M | $16M | | Energy Marketing | $27M | $43M | | Corporate and Other | ($18M) | ($8M) | | **Total** | **$266M** | **$310M** | [Hydro](index=12&type=section&id=Hydro) Adjusted EBITDA for the Hydro segment decreased due to lower ancillary service pricing in Alberta - **Adjusted EBITDA decreased by $16 million to $61 million**, primarily due to lower ancillary service pricing in the Alberta market and higher OM&A costs[69](index=69&type=chunk) - **Availability increased to 96.7%** from 91.9% in Q1 2021 due to lower planned outages, and production rose slightly by 12 GWh[66](index=66&type=chunk)[67](index=67&type=chunk) [Wind and Solar](index=13&type=section&id=Wind%20and%20Solar) The Wind and Solar segment's adjusted EBITDA grew, driven by new assets and liquidated damages - **Adjusted EBITDA increased by $13 million to $89 million**, driven by incremental revenue from new facilities and liquidated damages from turbine performance[75](index=75&type=chunk) - **Availability decreased significantly to 78.7%** from 95.1% due to the unplanned outage at the Kent Hills facilities and operational issues at the new Windrise facility[73](index=73&type=chunk) [Gas](index=14&type=section&id=Gas) The Gas segment's adjusted EBITDA saw a slight decrease from higher fuel costs despite better merchant pricing - **Adjusted EBITDA decreased slightly by $4 million to $102 million**, mainly due to higher natural gas prices, partially offset by higher realized merchant pricing[83](index=83&type=chunk) - **Availability improved to 93.8%** from 85.0% due to fewer planned outages following the completion of coal-to-gas conversions[81](index=81&type=chunk) [Energy Transition](index=15&type=section&id=Energy%20Transition) The Energy Transition segment's EBITDA declined significantly following the retirement of coal units - **Adjusted EBITDA decreased by $11 million to $5 million**, primarily due to lower production from the retirement of Keephills Unit 1 and higher coal costs[90](index=90&type=chunk) - **Gross installed capacity decreased significantly** from 1,879 MW to 784 MW year-over-year due to the retirement of coal units[86](index=86&type=chunk) [Energy Marketing](index=16&type=section&id=Energy%20Marketing) Energy Marketing's adjusted EBITDA normalized after an exceptionally strong performance in the prior year - **Adjusted EBITDA decreased by $16 million to $27 million**, as Q1 2021 results benefited from exceptional short-term market volatility[94](index=94&type=chunk) [Corporate](index=16&type=section&id=Corporate) Corporate costs increased due to the absence of a prior-year wage subsidy and swap valuation changes - Corporate overhead costs, represented as a negative adjusted EBITDA, **increased by $10 million to ($18) million**, primarily due to the receipt of the Canada Emergency Wage Subsidy (CEWS) in 2021[95](index=95&type=chunk) [Strategy and Capability to Deliver Results](index=17&type=section&id=Strategy%20and%20Capability%20to%20Deliver%20Results) The company outlines its Clean Electricity Growth Plan and the robust project pipeline supporting its strategic goals [Clean Electricity Growth Plan](index=17&type=section&id=Clean%20Electricity%20Growth%20Plan) The company is executing its five-year growth plan to add 2 GW of renewables and is ahead of schedule - The company's goal is to be a leading customer-centered electricity company focused on growing its portfolio of **high-quality generation facilities with stable cash flows**[100](index=100&type=chunk) Progress on Strategic Targets | Goal | Target | Status | Progress Summary | | :--- | :--- | :--- | :--- | | **Accelerate Growth** | Deliver 2 GW of renewable capacity by 2025 | Ahead of Plan | 800 MW cumulative progress towards target | | | Deliver $250M incremental annual EBITDA | Ahead of Plan | ~$135M cumulative progress towards target | | **Expand Pipeline** | Expand development pipeline to 5 GW by 2025 | On track | Evaluating opportunities to add new development sites | | **Financial Strength** | Maintain strong cash flow and capital allocation | On track | Liquidity of $2.4B as of March 31, 2022; returned $18M via share buybacks in Q1 | [Growth Pipeline](index=19&type=section&id=Growth%20Pipeline) The growth pipeline includes over 678 MW under construction and a multi-gigawatt development portfolio Projects Under Construction | Project | Type | Region | MW | Target Completion | Average Annual EBITDA | | :--- | :--- | :--- | :--- | :--- | :--- | | Garden Plain | Wind | AB, Canada | 130 | H2 2022 | $14M - $18M | | White Rock Wind | Wind | OK, US | 300 | H2 2023 | US$42M - US$46M | | Horizon Hill | Wind | OK, US | 200 | H2 2023 | US$27M - US$30M | | Northern Goldfields Solar | Hybrid Solar | WA, Australia | 48 | H2 2022 | AU$9M - AU$10M | | Mount Keith 132kV Expansion | Transmission | WA, Australia | n/a | H2 2023 | AU$6M - AU$7M | - The company has **140 MW of projects in advanced-stage development**, including the Tempest Wind project in Alberta[113](index=113&type=chunk) - The early-stage development pipeline totals between **2,205 MW and 2,805 MW**, with projects spanning wind, solar, battery storage, and pumped hydro[114](index=114&type=chunk) [2022 Financial Outlook](index=21&type=section&id=2022%20Financial%20Outlook) The company reaffirms its 2022 financial targets, supported by strong merchant pricing and updated assumptions 2022 Financial Targets | Measure | 2022 Target | 2021 Actual | | :--- | :--- | :--- | | Adjusted EBITDA | $1,065M - $1,185M | $1,263M | | Free Cash Flow (FCF) | $455M - $555M | $562M | Updated 2022 Power and Gas Price Assumptions | Market | Original Expectations | Updated Expectations | | :--- | :--- | :--- | | Alberta Spot ($/MWh) | $80 - $90 | $90 - $100 | | Mid-C Spot (US$/MWh) | US$45 - US$55 | US$55 - US$65 | | AECO Gas Price ($/GJ) | $3.60 | $4.50 - $5.50 | - The company is tracking against its stated 2022 guidance, with **strong merchant pricing expected to continue** in Alberta and the Pacific Northwest[119](index=119&type=chunk)[121](index=121&type=chunk) - The estimated net capital expenditure for the **Kent Hills foundation rehabilitation has increased to approximately $120 million**, with a return to service expected in H2 2023[124](index=124&type=chunk) [Selected Quarterly Information](index=23&type=section&id=Selected%20Quarterly%20Information) This section presents historical quarterly financial data, highlighting seasonality and key operational impacts - The company's results are seasonal, with higher maintenance costs in the spring and fall, while **hydro generation is highest in the spring and wind resources are stronger in the winter**[130](index=130&type=chunk) Quarterly Financial Data (Q2 2021 - Q1 2022) | Metric | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $619M | $850M | $610M | $735M | | Adjusted EBITDA | $302M | $381M | $270M | $266M | | Net earnings (loss) attributable to common shareholders | ($12M) | ($456M) | ($78M) | $186M | - Quarterly net earnings have been impacted by key events, including the **extended outage at Kent Hills**, the retirement of Keephills Unit 1, and lower carbon costs in Q1 2022[134](index=134&type=chunk) [Financial Position](index=25&type=section&id=Financial%20Position) The company's financial position strengthened with an increase in total assets and equity as of Q1 2022 Consolidated Statement of Financial Position (Changes) | Item | March 31, 2022 | Dec. 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $9,425M | $9,226M | $199M | | Total Liabilities | $6,785M | $6,633M | $152M | | Total Equity | $2,640M | $2,593M | $47M | - **Working capital increased to $311 million** from $266 million, mainly due to higher cash from operations and collateral received[137](index=137&type=chunk) - **Non-current liabilities decreased by $162 million**, primarily due to a $101 million decrease in decommissioning provisions resulting from higher discount rates[141](index=141&type=chunk) [Financial Capital](index=27&type=section&id=Financial%20Capital) This section details the company's capital structure, liquidity position, and returns to capital providers [Capital Structure and Liquidity](index=27&type=section&id=Capital%20Structure%20and%20Liquidity) The company maintains a strong liquidity position of $2.4 billion and a balanced capital structure Capital Structure as of March 31, 2022 | Component | Amount ($M) | % of Total Capital | | :--- | :--- | :--- | | Total consolidated net debt | 2,342 | 43% | | Non-controlling interests | 945 | 18% | | Exchangeable preferred securities | 400 | 7% | | Equity attributable to shareholders | 1,695 | 32% | | **Total Capital** | **5,382** | **100%** | - The company has **$1,067 million of debt maturing between 2022 and 2024** and expects to refinance the senior notes maturing in 2022[147](index=147&type=chunk) - Total available capacity under committed credit facilities was **$1,217 million** as of March 31, 2022[148](index=148&type=chunk) [Returns to Providers of Capital and Non-Controlling Interests](index=29&type=section&id=Returns%20to%20Providers%20of%20Capital%20and%20Non-Controlling%20Interests) Net interest expense remained stable while earnings attributable to non-controlling interests increased - **Net interest expense was $67 million** for Q1 2022, compared to $63 million for Q1 2021[153](index=153&type=chunk) - As of March 31, 2022, the company owns **60.1% of TransAlta Renewables** and **50.01% of TA Cogen**, both of which are consolidated[155](index=155&type=chunk)[156](index=156&type=chunk) - Reported earnings attributable to non-controlling interests **increased by $11 million to $20 million** in Q1 2022 compared to the same period in 2021[158](index=158&type=chunk) [Other Consolidated Analysis](index=30&type=section&id=Other%20Consolidated%20Analysis) This section provides an analysis of the company's consolidated cash flows [Cash Flows](index=30&type=section&id=Cash%20Flows) Operating cash flow increased significantly due to favorable working capital changes Consolidated Statement of Cash Flows (Q1 2022 vs Q1 2021) | Cash Flow Activity | Q1 2022 ($M) | Q1 2021 ($M) | | :--- | :--- | :--- | | Operating activities | 451 | 257 | | Investing activities | (72) | (111) | | Financing activities | (106) | (200) | | **Cash and cash equivalents, end of period** | **1,221** | **648** | - **Cash used in financing activities decreased by $94 million**, mainly due to lower drawings under the company's credit facilities, partially offset by higher share repurchases[165](index=165&type=chunk)[172](index=172&type=chunk) [Additional IFRS Measures and Non-IFRS Measures](index=31&type=section&id=Additional%20IFRS%20Measures%20and%20Non-IFRS%20Measures) This section defines and reconciles non-IFRS measures used to evaluate core business performance and leverage [Reconciliation of Non-IFRS Measures](index=31&type=section&id=Reconciliation%20of%20Non-IFRS%20Measures) This section reconciles key non-IFRS measures like Adjusted EBITDA and FCF to their IFRS counterparts - Key non-IFRS financial measures used by the company include **Adjusted EBITDA, Funds from Operations (FFO), and Free Cash Flow (FCF)** to evaluate performance[171](index=171&type=chunk) Reconciliation of Cash Flow from Operating Activities to FFO and FCF (Q1 2022) | Metric | Amount ($M) | | :--- | :--- | | Cash flow from operating activities | 451 | | Change in non-cash operating working capital | (284) | | Adjustments | 19 | | **Funds from Operations (FFO)** | **186** | | Deduct: Sustaining capital, dividends, etc | (71) | | **Free Cash Flow (FCF)** | **115** | Reconciliation of Adjusted EBITDA to FFO and FCF (Q1 2022) | Metric | Amount ($M) | | :--- | :--- | | Adjusted EBITDA | 266 | | Provisions, Interest, Taxes, Other | (80) | | **Funds from Operations (FFO)** | **186** | | Deduct: Sustaining capital, dividends, etc | (71) | | **Free Cash Flow (FCF)** | **115** | [Key Financial Non-IFRS Ratios](index=38&type=section&id=Key%20Financial%20Non-IFRS%20Ratios) The company's leverage ratios, including Adjusted Net Debt to Adjusted EBITDA, improved during the quarter Adjusted Net Debt to Adjusted EBITDA Ratio | Metric | March 31, 2022 | Dec. 31, 2021 | | :--- | :--- | :--- | | Adjusted net debt | $3,013M | $3,307M | | Adjusted EBITDA (LTM) | $1,219M | $1,263M | | **Ratio (times)** | **2.5x** | **2.6x** | Deconsolidated Net Debt to Deconsolidated Adjusted EBITDA Ratio | Metric | March 31, 2022 | Dec. 31, 2021 | | :--- | :--- | :--- | | Deconsolidated net debt | $1,619M | $1,870M | | Deconsolidated adjusted EBITDA (LTM) | $848M | $852M | | **Ratio (times)** | **1.9x** | **2.2x** | - The **deconsolidated net debt to adjusted EBITDA ratio decreased** compared to year-end 2021, due to lower deconsolidated net debt from debt repayments and higher cash balances[211](index=211&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting estimates were impacted by macroeconomic factors, particularly changes in discount rates - Material changes in estimates during Q1 2022 were influenced by global economic recovery, geopolitical events, and resulting **energy price volatility**[212](index=212&type=chunk) - The provision for **decommissioning and restoration obligations decreased** during the quarter as a result of higher discount rates[213](index=213&type=chunk) - The **defined benefit pension obligation decreased from $228 million to $205 million**, also due to increases in discount rates[214](index=214&type=chunk) [Regulatory Updates](index=42&type=section&id=Regulatory%20Updates) This section covers key regulatory developments related to clean energy and carbon pricing across major markets - **Canada:** The federal government released a discussion paper on a new **Clean Electricity Standard (CES)** aiming for a net-zero electricity sector by 2035[221](index=221&type=chunk)[223](index=223&type=chunk) - **Ontario:** The IESO is conducting a medium-term RFP to procure capacity, and policy development is underway for the province's **carbon pricing system**[225](index=225&type=chunk)[227](index=227&type=chunk) - **United States:** The SEC has proposed rules to **standardize climate-related disclosures** for investors, and Congress continues to consider support for renewable energy[228](index=228&type=chunk)[229](index=229&type=chunk) - **Australia:** A national election is scheduled for May 21, 2022, but no policy proposals are expected to present **significant adverse risks** to TransAlta's performance[230](index=230&type=chunk) [Disclosure Controls and Procedures](index=43&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management, including the CEO and CFO, evaluated the effectiveness of the company's **Internal Control over Financial Reporting (ICFR)** and **Disclosure Controls and Procedures (DC&P)**[237](index=237&type=chunk) - Based on their evaluation, the CEO and CFO concluded that as of March 31, 2022, the company's **ICFR and DC&P were effective**[237](index=237&type=chunk) - The evaluation scope **excluded the recently acquired North Carolina Solar facility**, consistent with regulatory guidance for recent acquisitions[235](index=235&type=chunk)[236](index=236&type=chunk)

Financial Highlights - Adjusted EBITDA increased by 36% from $927 million in 2020 to $1,263 million in 2021[8] - Free Cash Flow increased by 57% from $358 million in 2020 to $562 million in 2021[8] - Free Cash Flow per share increased by 59% from $130 in 2020 to $207 in 2021[8,9] Growth and Strategic Initiatives - 600 MW of growth was announced in 2021, expanding across all 3 operating regions[10] - Renewables and storage accounted for 43% of generation EBITDA in 2021, compared to 35% in 2020[10] - The company has secured 30% of its 5-year Clean Electricity Growth Plan target[13] - The company expects to deliver EBITDA of $1065 - $1185 billion and FCF of $455 - $555 million in 2022[38] Alberta Portfolio and Hedging - The company has hedged 6278 GWh of energy at an average hedge price of $75/MWh for the full year 2022, representing approximately 75% of expected Alberta Gas and Energy Transition production[29] - The company has hedged 50 million GJ of natural gas at $275/GJ, representing approximately 55% of expected Alberta Gas and Energy Transition requirements[29] TransAlta Renewables - TransAlta Renewables reported Adjusted EBITDA of $463 million in 2021, consistent with $462 million in 2020[35] - CAFD was $275 million in 2021, a 10% decrease from $304 million in 2020[35] - The payout ratio was 91% in 2021, compared to 82% in 2020[35]

Financial Data and Key Metrics Changes - TransAlta reported a record adjusted EBITDA of CAD 1.26 billion for 2021, a 36% increase from 2020 [5][21] - Free cash flow reached CAD 562 million or CAD 2.07 per share, marking a 59% increase on a per share basis compared to 2020 [5][21] - The company ended the year with CAD 2.2 billion in liquidity, including CAD 947 million in cash [22] Business Line Data and Key Metrics Changes - The Alberta hydro fleet delivered a threefold increase in adjusted EBITDA from CAD 105 million in 2020 to CAD 322 million in 2021 [20] - Adjusted EBITDA from the new gas segment increased by 35% year-over-year from CAD 367 million in 2020 to CAD 494 million in 2021 [20] - Energy marketing delivered CAD 137 million in adjusted EBITDA, a 21% increase from 2020 [20] Market Data and Key Metrics Changes - The average pool price for Q4 2021 settled at CAD 107 per megawatt hour, significantly higher than the average price of CAD 47 [17] - The hydro fleet captured peak pricing with average realized prices of CAD 122 per megawatt hour, representing a 19% premium over the average spot price [18] Company Strategy and Development Direction - The company aims to achieve a 75% reduction in CO2 emissions by 2026 from 2015 levels, having already reduced annual CO2 emissions by 3.9 million tons in 2021 [8][27] - TransAlta secured 600 megawatts of renewable growth in 2021, representing 30% of its five-year growth target [9][10] - The company is focusing on maximizing the value of its hydro and wind fleets while exploring battery storage opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2 gigawatts clean electricity growth plan by 2025, with a target to reach investment decisions on another 400 megawatts in 2022 [9][26] - The company noted strong demand for renewables in the US and plans to expand its development pipeline [12][26] - Management highlighted the importance of securing long-term contracts to support the Alberta merchant fleet [39] Other Important Information - TransAlta completed its transition from coal to gas in Canada, achieving this milestone nine years ahead of the government target [8] - The company is committed to equity, diversity, and inclusion, aiming for at least 40% female employees by 2030 [27][29] Q&A Session Summary Question: Discussion on US development pipeline changes - Management clarified that changes in the US development pipeline were driven by continuous evaluation of project potential rather than supply chain or inflationary pressures [32][33] Question: Confirmation of the 2 gigawatts target by 2025 - The target remains unchanged, with ongoing development efforts to meet this goal [34] Question: Factors affecting the clean energy growth plan - Management emphasized the importance of matching development projects with power purchase agreements (PPAs) and noted robust demand for renewable energy [36][38] Question: Relationship between TransAlta and TransAlta Renewables - TransAlta Renewables remains a key vehicle for funding growth, with ongoing evaluations of strategic positioning [42] Question: Impact of FMG settlements on EBITDA - Specific terms of the FMG settlement were confidential, but management expressed satisfaction with the resolution [44] Question: Long-term outlook for the Pacific Northwest market - Management is exploring renewable opportunities and alternative technologies for future projects in the region [46][48] Question: Cost pressures on projects - Management acknowledged inflationary pressures but emphasized that PPAs help maintain project economics [58][59] Question: Clarity on contracting for industrial customers - Management expects to finalize contracts with major industrial customers in the first half of the year [62] Question: Strategy for refinancing capital commitments - The company plans to refinance capital commitments for new facilities, leveraging its strong cash position [66]

A c c e l e r a t i n g C l e a n 2 0 2 1 I n t e g r a t e d R e p o r t About This Report Welcome to TransAlta's seventh consecutive Integrated Report, which combines our financial and sustainability goals and results. This is an industry-leading practice and Trans Alta is one of only a few companies to do this in North America. We believe sustainability performance should be evaluated, managed and communicated alongside our financial performance to demonstrate the impact on financial, environmental and s ...

TransAlta Corporation (NYSE:TAC) Q3 2021 Results Conference Call November 9, 2021 11:00 AM ET Company Participants Chiara Valentini - Managing Director-Strategic Finance and Investor Relations John Kousinioris - President, Chief Executive Officer and Corporate Director Todd Stack - Executive Vice President-Finance and Chief Financial Officer Kerry O'Reilly Wilks - Executive Vice President-Legal, Commercial and External Affairs Conference Call Participants Rob Hope - Scotiabank Ben Pham - BMO Maurice Choy - ...

TransAlta Q3 2021 Results NOVEMBER 9, 2021 TransAlta 1 Forward-Looking Statements In particular, this presentation contains forward-looking statements including, but not limited to, statements relating to: our Clean Electricity Growth Plan and ability to achieve the target of 2 GW of incremental renewables capacity with an investment of $3 billion by 2025; the Windrise project and that the project will reach commercial operation later this month; the Northern Goldfields Solar and Storage project, and that c ...

Financial Performance - Comparable EBITDA increased by 39% from $217 million to $302 million[10, 36, 37] - Free Cash Flow (FCF) increased by 52% from $91 million to $138 million[12, 36] - FCF per share increased by 55% from $0.33 to $0.51[12, 36] - TransAlta Renewables Q2 2021 Comparable EBITDA was $97 million, compared to $115 million in Q2 2020[41] - TransAlta Renewables Q2 2021 AFFO was $64 million, compared to $90 million in Q2 2020[41] - TransAlta Renewables Q2 2021 CAFD was $40 million, compared to $67 million in Q2 2020[41] Growth Initiatives - Launched the 48 MW Northern Goldfields Solar & Storage Project in Australia, with an expected EBITDA of $8 - $9 million[11, 22, 23] - Launched the Garden Plain 130 MW Wind Project in Alberta, with an expected EBITDA of ~$14 – $18 million[13, 25] - Added 500 MW of renewables to the growth pipeline[19] - The company has access to $2 billion in liquidity, including approximately $650 million in cash[19] Portfolio and Strategy - The company has an advanced stage development sites of 500 MW and early/mid-stage prospects of 2.3GW – 2.9GW[17, 29] - Updated 2021 Comparable EBITDA guidance to $1,100 - $1,200 million, up ~13% from the original guidance[14, 43] - Updated 2021 FCF guidance to $440 - $515 million, up ~22% on a per share basis[14, 43]