TransAlta Corp. Q3 FY2024 earnings call

• Actively engaged with the Competition Bureau regarding the Heartland Generation acquisition and have greater optimism about completing the transaction. • Temporarily mothballed Sundance Unit 6 effective April 1, 2025, to preserve it for future opportunities. • Advancing contracting and development opportunities at legacy thermal sites in Alberta and Centralia, with potential for repurposing and new facilities. • Delivered adjusted EBITDA of CAD325 million, free cash flow of CAD140 million, and average fleet availability of 94.5% in Q3. • Committed to returning value to shareholders, including completing the share repurchase program and funding the Heartland acquisition.

The Hydro segment delivered adjusted EBITDA of $89 million. The Wind and solar segment had adjusted EBITDA of $44 million, a 19% increase compared to the same period last year. The Gas segment delivered adjusted EBITDA of $139 million during the quarter. The Energy Transition segment delivered $34 million of adjusted EBITDA. The Energy Marketing segment delivered adjusted EBITDA of $54 million, an increase of $41 million year-over-year.

• Confident of delivering adjusted EBITDA and free cash flow towards the upper end of 2024 ranges despite fourth quarter planned outages impacting free cash flow. • For 2025 and 2026, Alberta portfolio has hedged production at an average price of approximately $76 per megawatt hour, above current forward pricing levels. • Intends to complete the $150 million share repurchase program by year-end 2024.

• Market oversupply conditions in 2025 could affect power prices. • Uncertainty regarding regulatory approvals for the Heartland Generation acquisition. • Challenges in balancing supply and demand for data centers in Alberta, potentially impacting grid reliability.

Q: Talking about repurposing thermal sites, is the view on hosting data centers on site or through grid?

A: Primary focus is on colocation, with a phased approach to develop facilities and make the site attractive.

Q: What will come first, clarity on Centralia or Alberta sites?

A: Both are advancing, discussions on Alberta Thermal are more advanced in timing but both are ongoing.

Q: On Sundance 6 mothball, if no data center opportunity, would decision be different?

A: Mothball decision was based on market conditions, supply, and hedge position, with the option to bring the unit back if circumstances change.

Q: On Heartland transaction, how has the macro outlook changed the view?

A: More bullish on Heartland as it is seen as accretive and providing strong returns, with focus on capital allocation.

Q: On data center policy, how is it understood?

A: There is a need for balance in supply and demand to ensure grid reliability, with Alberta's thermal sites offering speed to market advantage.