Benefits to TransAlta Shareholders

The Arrangement is strategically and economically attractive to holders of TransAlta Shares (“TransAlta Shareholders”) and provides the following benefits:

• Enhanced Strategic Position: The combined company will leverage scale, assets and capabilities in all markets, while retaining greater exposure to the growth in clean electricity opportunities. The Arrangement will provide economic contribution from an incremental 1,187 MW of generating capacity, being 39.9% of the generating capacity at TransAlta Renewables not currently owned by TransAlta (directly or indirectly). The Arrangement also increases the proportion of TransAlta's contractedness and diversifies the impact of TransAlta's merchant market exposure.
• Sustainable, Attractive Transaction Metrics: The Arrangement is accretive to free cash flow and provides greater financial flexibility by increasing the retention of cash, which will support the combined company's growth plan.
• Execution of a Single Strategy: The Arrangement provides clarity and will result in the execution of a single strategy. All future growth will be pursued in the combined company and funded with greater capital efficiency, while the combined company retains access to future growth in contracted opportunities.
• Increased Liquidity and Synergies: The combined company will have an increased public float and trading liquidity, and have access to more efficient capital, along with corporate synergies.
• Maintains Financial Strength: The simplified structure and funding of the Arrangement is expected to have a neutral impact to the credit rating of TransAlta.