<SEC-DOCUMENT>0001137171-13-000169.txt : 20130424
<SEC-HEADER>0001137171-13-000169.hdr.sgml : 20130424
<ACCEPTANCE-DATETIME>20130424154600
ACCESSION NUMBER:		0001137171-13-000169
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20130331
FILED AS OF DATE:		20130424
DATE AS OF CHANGE:		20130424

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TRANSALTA CORP
		CENTRAL INDEX KEY:			0001144800
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15214
		FILM NUMBER:		13779284

	BUSINESS ADDRESS:	
		STREET 1:		110 12TH AVE SW BOX 1900 STATION M
		STREET 2:		CALGARY ALBERTA T2P 2MI
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P2M1
		BUSINESS PHONE:		403-267-4724

	MAIL ADDRESS:	
		STREET 1:		110-12TH AVENUE SW
		CITY:			CALGARY ALBERTA CANADA
		STATE:			A0
		ZIP:			T2P2M1
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>transalta6k04232013.htm
<DESCRIPTION>TRANSALTA CORPORATION - 6-K
<TEXT>
<HTML>
<HEAD>
     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center">FORM 6-K<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</P>

<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center">Report of Foreign Private Issuer</P>

<P STYLE="font: small-caps bold 12pt Times New Roman, Times, Serif; margin: 0 0 0.5in; text-align: center">Pursuant to Rule 13a-16
or 15d-16<BR>
of the Securities Exchange Act of 1934</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt">For the month of April 2013</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TRANSALTA CORPORATION</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Translation of registrant&#8217;s name into
English)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>110-12<SUP>th</SUP> Avenue S.W., Box 1900,
Station &#8220;M&#8221;, Calgary, Alberta, T2P 2M1</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">(Address of principal executive offices)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Form 20-F____ &#9;Form 40-F&nbsp;&nbsp;&nbsp; <U>X </U></P>

<P STYLE="font: 12pt/14pt Times New Roman, Times, Serif; margin: 0 0 9.6pt">Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____</P>

<P STYLE="font: 12pt/14pt Times New Roman, Times, Serif; margin: 0 0 9.6pt">Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%">Yes&#9; &nbsp;&nbsp;&nbsp;&nbsp;_____&#9;</TD>
    <TD STYLE="width: 29%">&nbsp;</TD>
    <TD STYLE="width: 38%">No &nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>X</U></TD></TR>
</TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt"><FONT STYLE="font-size: 12pt">If &#8220;Yes&#8221;
is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): </FONT> <FONT STYLE="font-size: 12pt">82-________
</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-align: center; text-indent: 0in"><B>I</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in">The documents listed below in this Section
and filed as Exhibits 13.1 and 13.2 to this form 6-K are hereby filed with the Securities and Exchange Commission for the purpose
of being and hereby are incorporated by reference into the following registration statements filed by TransAlta Corporation under
the Securities Act of 1933, as amended:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; text-indent: 0in"><FONT STYLE="font-size: 11pt"><U>Form</U></FONT></TD>
    <TD STYLE="width: 56%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; text-indent: 0in"><FONT STYLE="font-size: 11pt"><U>Registration No.</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">S-8</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">333-72454</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">S-8</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">333-101470</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">F-10</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><FONT STYLE="font-size: 11pt">333-185157</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 0.25in; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt">13.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt"><A HREF="fins13-1.htm">Consolidated comparative interim unaudited financial statements of the registrant for the three month period ended March 31, 2013.</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt">13.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt"><A HREF="mda13-2.htm">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations of the registrant as at and for the period ended March 31, 2013.</A></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-align: center; text-indent: 0in"><B>II</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in">The document listed below in this Section
as 99.1 is being furnished, not filed, and will not be incorporated by reference into any registration statement filed by TransAlta
Corporation under the Securities Act of 1933, as amended.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt">99.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in; font-size: 12pt"><A HREF="newsrelease.htm">Press release dated April 23, 2013</A></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Signatures</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt">Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 9.9pt 0 0; text-indent: 4in"><B>TransAlta Corporation</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 9pt 0 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 57%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:</TD>
    <TD STYLE="width: 39%; border-bottom: Black 1pt solid">/<I>s/Brett Gellner</I>&#9;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Brett Gellner</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR>
</TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 9pt 0 0">&#9;</P>

<P STYLE="font: 12pt/14pt Times New Roman, Times, Serif; margin: 0 9pt 0 0">&#9;</P>

<P STYLE="font: 12pt/14pt Times New Roman, Times, Serif; margin: 0 9pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0">Date: April 23, 2013</P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center; text-indent: 0in"><B>EXHIBIT INDEX</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">13.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><A HREF="fins13-1.htm">Consolidated comparative interim unaudited financial statements of the registrant for the three month period ended March 31, 2013.</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">13.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><A HREF="mda13-2.htm">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations of the registrant as at and for the period ended March 31, 2013.</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">31.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">31.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">32.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Certification of Chief Executive Officer regarding Periodic Report Containing Financial Statements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">32.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Certification of Chief Financial Officer regarding Periodic Report Containing Financial Statements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">99.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><A HREF="newsrelease.htm">Press release dated April 23, 2013.</A></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0; text-align: right">Exhibit 31.1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CERTIFICATIONS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">I, Dawn L. Farrell, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">1.</FONT></TD><TD><FONT STYLE="font-size: 10pt">I have reviewed this quarterly report on Form 6-K of TransAlta Corporation;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">2.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">3.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">4.</FONT></TD><TD><FONT STYLE="font-size: 10pt">The registrant&#8217;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
have:</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(a)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(b)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Evaluated the effectiveness of the registrant&#8217;s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(c)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Disclosed in this report any change in the registrant&#8217;s internal control over financial
reporting that occurred during the registrant&#8217;s most recent fiscal quarter (the registrant&#8217;s fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#8217;s
internal control over financial reporting; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">5.</FONT></TD><TD><FONT STYLE="font-size: 10pt">The registrant&#8217;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#8217;s auditors and the audit committee of the registrant&#8217;s
board of directors (or persons performing the equivalent functions):</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(a)</FONT></TD><TD><FONT STYLE="font-size: 10pt">all significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant&#8217;s ability to record, process, summarize
and report financial information; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">(b)</FONT></TD><TD><FONT STYLE="font-size: 10pt">any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant&#8217;s internal control over financial reporting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 27%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt"><I>/s/ Dawn L. Farrell</I></FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">Dated April 23, 2013</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Dawn L. Farrell</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">President and Chief Executive Officer</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&#9;&#9;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0; text-align: right">Exhibit 31.2</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CERTIFICATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">I, Brett Gellner, certify that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">1.</FONT></TD><TD><FONT STYLE="font-size: 10pt">I have reviewed this quarterly report on Form 6-K of TransAlta Corporation;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">2.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">3.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">4.</FONT></TD><TD><FONT STYLE="font-size: 10pt">The registrant&#8217;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
have:</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">a.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">b.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Evaluated the effectiveness of the registrant&#8217;s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">c.</FONT></TD><TD><FONT STYLE="font-size: 10pt">Disclosed in this report any change in the registrant&#8217;s internal control over financial
reporting that occurred during the registrant&#8217;s most recent fiscal quarter (the registrant&#8217;s fourth fiscal quarter
in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#8217;s
internal control over financial reporting; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">5.</FONT></TD><TD><FONT STYLE="font-size: 10pt">The registrant&#8217;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#8217;s auditors and the audit committee of the registrant&#8217;s
board of directors (or persons performing the equivalent functions):</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">a.</FONT></TD><TD><FONT STYLE="font-size: 10pt">all significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant&#8217;s ability to record, process, summarize
and report financial information; and</FONT><BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">b.</FONT></TD><TD><FONT STYLE="font-size: 10pt">any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant&#8217;s internal control over financial reporting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 27%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 40%"><FONT STYLE="font-size: 10pt"><I> <I>/s/ Brett Gellner</I></I></FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">Dated April 23, 2013</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Brett Gellner</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4in"></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right">Exhibit 32.1</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Certification
of Chief Executive Officer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"></TD><TD>Pursuant to 18 U.S.C. &sect; 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of
TransAlta Corporation (the &#8220;<U>Company</U>&#8221;) hereby certifies, to such officer&#8217;s knowledge, that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&#9;(i)&#9;the accompanying Report of Foreign Private
Issuer on Form 6-K of the Company (the &#8220;<U>Report</U>&#8221;) fully complies with the requirements of Section 13(a) or Section
15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&#9;(ii)&#9;the information contained in the Report fairly
presents, in all material respects, the financial condition and results of operations of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 211.5pt; text-indent: -3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 211.5pt; text-indent: -3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 211.5pt; text-indent: -3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 27%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 40%"><FONT STYLE="font-size: 10pt"><I> <I>&#9;/s/ Dawn L. Farrell</I></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">Dated April 23, 2013</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Dawn L. Farrell</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">President and Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&#9;&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&#9;&#9;&#9;</P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right">Exhibit 32.2</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Certification
of Chief Financial Officer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">Pursuant to 18 U.S.C. &sect; 1350, as created by Section
906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of TransAlta Corporation (the &#8220;<U>Company</U>&#8221;) hereby
certifies, to such officer&#8217;s knowledge, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&#9;(i)&#9;the accompanying Report of Foreign Private
Issuer on Form 6-K of the Company (the &#8220;<U>Report</U>&#8221;) fully complies with the requirements of Section 13(a) or Section
15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in">&#9;(ii)&#9;the information contained in the Report fairly
presents, in all material respects, the financial condition and results of operations of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 211.5pt; text-indent: -3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 27%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 40%"><FONT STYLE="font-size: 10pt"><I> <I>/s/ Brett Gellner</I></I></FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">Dated April 23, 2013</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Brett Gellner</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>2
<FILENAME>fins13-1.htm
<DESCRIPTION>CONSOLIDATED COMPARATIVE INTERIM UNAUDITED FINANCIAL STATEMENTS OF THE REGISTRANT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2013.
<TEXT>

<HTML>
<HEAD>
   <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>

<BODY bgcolor="#ffffff">


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<TR>
     <TD width=62%></TD>
     <TD width=19%></TD>
     <TD width=3%></TD>
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<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
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&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(in millions of Canadian dollars except per share amounts)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
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&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
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&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
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&nbsp;&nbsp;</TD>
</TR>
<TR>
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&nbsp;&nbsp;</TD>
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	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 5)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">540</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">644</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fuel and purchased power </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 6)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">201</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">175</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Gross margin</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">339</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">469</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Operations, maintenance, and administration </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 6)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">115</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">128</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">127</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">129</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory writedown </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 14)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">34</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Taxes, other than income taxes</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Operating income</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">76</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">171</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Finance lease income</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity loss </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 7)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gain on sale of assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 4)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Foreign exchange loss</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Loss on assumption of pension obligations </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 3)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(29)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net interest expense </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 8 and 11)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(62)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(60)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Earnings (loss) before income taxes</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(9)</FONT></B></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">110</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income tax expense (recovery) </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 9)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(17)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net earnings</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">108</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net earnings (loss) attributable to:</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TransAlta shareholders</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">95</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-controlling interests</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">10</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">108</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings (loss) attributable to TransAlta shareholders</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">95</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred share dividends </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 21)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net earnings (loss) attributable to common shareholders</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(11)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">88</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Weighted average number of common shares</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: center; border-bottom: Black 1pt solid; text-align: left">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">outstanding in the period </FONT></B><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(millions)</FONT></I></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">258</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">225</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net earnings (loss) per share attributable to common</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; text-align: left">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">shareholders, basic and diluted</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(0.04)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.39</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">* See Note 2 for prior period restatements.</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001633pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">See accompanying notes.</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></P>
</DIV>

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     <TD width=68%></TD>
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     <TD width=3%></TD>
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	<TD align=left style="TEXT-INDENT:0.000931pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000931pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000931pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(in millions of Canadian dollars)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net earnings</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">108</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:7.319611pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net actuarial gains (losses) on defined benefit plans, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp; Reclassification of losses on derivatives designated as cash flow
hedges to non-financial assets, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></SUP></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000931pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total items that will not be reclassified subsequently to</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 4.09pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">net earnings</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(8)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;&nbsp;&nbsp;
    </TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:7.320923pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gains (losses) on translating net assets of foreign operations</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(32)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.092224pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp; Gains (losses) on financial instruments designated as hedges of
foreign operations, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(21)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.091675pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Gains (losses) on derivatives designated as cash flow hedges,
net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.092163pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp; Reclassification of gains on derivatives designated as
cash flow hedges to net earnings, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(19)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive income (loss) of equity investees, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></SUP></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000931pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total items that may be reclassified subsequently to</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 4.09pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">net earnings</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(3)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(29)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Other comprehensive income (loss)</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(37)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total comprehensive income</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">13</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">71</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000931pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total comprehensive income (loss) attributable to:</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:7.320923pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common shareholders</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">65</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 7.31pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-controlling interests</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">13</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">71</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;&nbsp;</P>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">*</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">See Note 2 for prior period restatements.</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of 2 for the three months ended March 31, 2013 (2012 - 3 recovery).</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(2)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of nil for the three months ended March 31, 2013 (2012 - nil).</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(3)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 3 for the three months ended March 31, 2013 (2012 - 3 expense).</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(4)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 2 for the three months ended March 31, 2013 (2012 - 1 expense).</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(5)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of 3 for the three months ended March 31, 2013 (2012 - 17 expense).</FONT></I>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(6)</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 1 for the three months ended March 31, 2013 (2012 - nil).</FONT></I>	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">See accompanying notes.</FONT></P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</font></b></P>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=42%></TD>
     <TD width=20%></TD>
     <TD width=3%></TD>
     <TD width=15%></TD>
     <TD width=3%></TD>
     <TD width=11%></TD>
     <TD width=3%></TD></TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=2 style="TEXT-INDENT:0.001373pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(in millions of Canadian dollars)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 1, 2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash and cash equivalents </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 13)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">50</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">27</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">49</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts receivable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">457</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">597</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">541</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current portion of finance lease receivable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Collateral paid </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">19</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">45</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Prepaid expenses</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">8</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Risk management assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11 and 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">123</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">201</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">391</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000137pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 14)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">95</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">93</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">92</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income taxes receivable</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">6</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">775</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">949</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1,131</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Investments </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 7)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">170</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">172</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">193</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term receivable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">18</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term portion of finance lease receivable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">363</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">357</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">42</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Property, plant, and equipment </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 15)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.093201pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cost</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11,641</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11,481</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11,386</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accumulated depreciation</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4,563)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4,437)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4,115)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7,078</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7,044</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7,271</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Goodwill</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">447</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">447</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">447</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Intangible assets</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">283</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">284</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">276</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred income tax assets</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">75</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">50</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">169</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Risk management assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11 and 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">63</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">69</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">99</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 16)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">103</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">90</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">90</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 0pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total assets</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9,357</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9,462</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9,736</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts payable and accrued liabilities</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">450</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">495</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">463</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Decommissioning and other provisions </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 17)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">33</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">99</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Collateral received </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11 and 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">16</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Risk management liabilities </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11 and 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">110</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">167</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">208</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000137pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income taxes payable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">22</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dividends payable </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 20 and 21)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">76</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">75</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">67</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current portion of finance lease obligation </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 3)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current portion of long-term debt </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11, 12, and 18)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">620</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">607</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">316</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1,296</FONT></B></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1,385</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1,191</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1pt solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term debt </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11, 12, and 18)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3,611</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,610</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,721</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Finance lease obligation </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 3)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">12</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Decommissioning and other provisions </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 17)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">287</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">279</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">283</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred income tax liabilities</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">424</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">433</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">486</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Risk management liabilities </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Notes 11 and 12)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">112</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">106</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">142</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000137pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred credits and other long-term liabilities </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 19)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">303</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">301</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">281</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000137pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.093201pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common shares </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 20)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,780</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,726</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,273</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.092041pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred shares </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 21)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">781</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">781</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">562</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.091965pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contributed surplus</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.091827pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Retained earnings (deficit)</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(448)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(362)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">524</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accumulated other comprehensive loss </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 22)</FONT></I></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(138)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(136)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(94)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity attributable to shareholders</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,984</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,018</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,274</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-controlling interests </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 10)</FONT></I></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">328</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">330</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">358</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1 solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total equity</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1 solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3,312</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1 solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1 solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,348</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1 solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1 solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,632</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1 solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total liabilities and equity</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9,357</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9,462</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9,736</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">* See Note 2 for prior period restatements.</FONT></I></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contingencies </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 23)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Commitments </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 24)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001373pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">See accompanying notes.</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3</FONT></B></P>
</DIV>

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<TR>
     <TD width=18%></TD>
     <TD width=6%></TD>
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     <TD width=6%></TD>
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<TR valign="bottom">
	<TD align=left colspan="7">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION</FONT></B>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
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&nbsp;</TD>
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&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=7>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan="4">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(in millions of Canadian dollars)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=14>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan="4">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2013</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=14>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Common</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">shares</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Preferred</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">shares</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Contributed</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">surplus</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Retained</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">deficit</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Accumulated other</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">comprehensive</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">income (loss)</FONT><SUP><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Attributable to</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">shareholders</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Attributable to</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">non-controlling</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">interests</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
    </TD>
	<TD align=left style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Balance, Dec. 31, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,726</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">781</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(362)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(136)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,018</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">330</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,348</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings (loss)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">8</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive income (loss):</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left> <FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net gains on translating net assets of foreign
 operations, net of hedges and of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002945pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net gains (losses) on
derivatives designated as cash flow hedges, net of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002914pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net actuarial gains on defined benefits plans, net of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive loss of equity investees, net of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total comprehensive income</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">17</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common share dividends</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(75)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(75)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(75)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred share dividends</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002914pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Distributions to non-controlling interests</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common shares issued</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">54</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">54</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">54</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31, 2013</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,780</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">781</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(448)</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(138)</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,984</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">328</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3,312</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<TR>
     <TD width=21%></TD>
     <TD width=7%></TD>
     <TD width=7%></TD>
     <TD width=8%></TD>
     <TD width=7%></TD>
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     <TD width=10%></TD>
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     <TD width=9%></TD>
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<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">shares</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">shares</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contributed</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">surplus</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Retained</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">earnings</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accumulated</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">other</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">comprehensive</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">income (loss)</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Attributable to</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">shareholders</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Attributable to</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">non-controlling</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">interests</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
</TR>
<TR>
	<TD colspan=14>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Balance, Dec. 31, 2011</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,273</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">562</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">524</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(94)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,274</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">358</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,632</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">95</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">95</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">108</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive income (loss):</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net losses on translating net assets of</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">foreign operations, net of hedges and of</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002563pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net losses on derivatives designated</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002563pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">as cash flow hedges, net of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(10)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(10)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(17)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002563pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net actuarial losses on defined benefits</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">plans, net of tax</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total comprehensive income</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">65</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">71</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common share dividends</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(65)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(65)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(65)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred share dividends</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.002731pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Distributions to non-controlling interests</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common shares issued</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Balance, March 31, 2012</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,293</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">562</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">547</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(124)</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,287</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">345</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,632</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">*</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">See Note 2 for prior period restatements.&nbsp;</FONT></I>
<p>&nbsp;</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Refer to Note 22 for details on components of, and changes in, Accumulated other comprehensive income (loss).</FONT></I>	</p>
	</TD>
</TR>
</TABLE>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">See accompanying notes.</FONT></P>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</font></b></P>
</DIV>

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<TR>
     <TD width=63%></TD>
     <TD width=18%></TD>
     <TD width=3%></TD>
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<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(in millions of Canadian dollars)</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unaudited</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Operating activities</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings (loss)</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">108</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 25)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">139</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">140</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gain on sale of assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 4)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accretion of provisions </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 17)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Decommissioning and restoration costs settled </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 17)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(5)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred income tax expense (recovery) </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 9)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(25)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000198pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unrealized (gain) loss
from risk management activities</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">41</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(69)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000046pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unrealized foreign exchange loss</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000198pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Provisions</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(7)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity loss, net of distributions received </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 7)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other non-cash items</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">16</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash flow from operations before changes in working capital</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">179</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">189</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in non-cash operating working capital balances </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 26)</FONT></I></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">77</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash flow from operating activities</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">256</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">183</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Investing activities</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additions to property, plant, and equipment </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 15)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(125</FONT></B></TD>
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(137)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additions to intangibles</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(7)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Proceeds on sale of assets </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 4)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000198pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Realized losses on financial instruments</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net decrease in collateral received from counterparties</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net (increase) decrease in collateral paid to counterparties</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Decrease in finance lease receivable</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000198pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in non-cash investing working capital balances</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(19)</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(12)</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash flow used in investing activities</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(150)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(164)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Financing activities</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net increase (decrease) in borrowings under credit facilities </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 18)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(33)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">40</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
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	<TD align=left style="TEXT-INDENT:0.000244pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Repayment of long-term debt </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 18)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dividends paid on common shares </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 20)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(20)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(45)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dividends paid on preferred shares </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 21)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(9)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(8)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Distributions paid to subsidiaries' non-controlling interests </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 10)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(19)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
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	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
    &nbsp;&nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash flow used in financing activities</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(84)</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;
    </TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(37)</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
    &nbsp;&nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Cash flow from (used in) operating, investing, and financing activities</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">22</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(18)</FONT></TD>
	<TD align=left>
    &nbsp;&nbsp;
    </TD>
</TR>
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	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Effect of translation on foreign currency cash</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Increase (decrease) in cash and cash equivalents</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">23</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(18)</FONT></TD>
	<TD align=left>
    &nbsp;
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Cash and cash equivalents, beginning of period</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">27</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">49</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Cash and cash equivalents, end of period</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">50</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">31</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash income taxes paid</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">12</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">15</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash interest paid</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">39</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">46</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">* See Note 2 for prior period restatements.</FONT></I>
<p>&nbsp;</p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">See accompanying notes.</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.001495pt">
    </TD>
	<TD align=left>
    </TD>
	<TD align=left>
    </TD>
	<TD align=left>
    </TD>
	<TD align=left>
    </TD>
</TR>
</TABLE>
</DIV>
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<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">6</font></b></P>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">N O T E S&nbsp;&nbsp; T O &nbsp;&nbsp;C O N D E N S E D&nbsp;&nbsp; C O N S O L I D A T E D&nbsp;&nbsp; F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S</FONT></B></TD>
</TR>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">( U N A U D I T E D )</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Tabular amounts in millions of Canadian dollars, except as otherwise noted)</FONT></I></TD>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 . A C C O U N T I N G
&nbsp;&nbsp;P O L I C I E S</FONT></B></TD>
</TR>
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</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Basis of Preparation</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (&#147;IAS&#148;) 34 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Interim Financial Reporting </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">using the same accounting policies as those used in TransAlta Corporation&#146;s (&#147;TransAlta&#148; or &#147;the Corporation&#148;) most recent annual consolidated financial statements, except as outlined in Note 2(A). These unaudited interim condensed consolidated financial statements do not include all of the disclosures included in the Corporation&#146;s annual consolidated financial statements. Accordingly, these should be read in conjunction with the Corporation&#146;s most recent annual consolidated financial statements.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The unaudited interim condensed consolidated financial statements include the accounts of the Corporation and the subsidiaries that it controls. Refer to the discussion on the adoption of International Financial Reporting Standards (&#147;IFRS&#148;) 10 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Consolidated Financial Statements</FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">, found in Note 2(A) for information on the impacts of applying the new IFRS definition of control.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The unaudited interim condensed consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, which are stated at fair value.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">These unaudited interim condensed consolidated financial statements reflect all adjustments which consist of normal recurring adjustments and accruals that are, in the opinion of management, necessary for a fair presentation of results. TransAlta&#146;s results are partly seasonal due to the nature of the electricity market and related fuel costs. Higher maintenance costs are ordinarily incurred in the second and third quarters when electricity prices are expected to be lower, as electricity prices generally increase in the winter months in the Canadian market.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">These unaudited interim condensed consolidated financial statements were authorized for issue by the Board of Directors on April 22, 2013.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Use of Estimates</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The preparation of these condensed consolidated financial statements in accordance with IFRS requires management to use judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates are subject to uncertainty. Actual results could differ from these estimates due to factors such as fluctuations in interest rates, foreign exchange rates, inflation and commodity prices, and changes in economic conditions, legislation and regulations. Refer to Note 2(W) of the 2012 annual consolidated financial statements for a more detailed discussion of the critical accounting judgments and key sources of estimation uncertainty.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</font></b></P>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 . A C C O U N T I N G &nbsp;&nbsp;C H A N G E S</FONT></B></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Adoption of New or Amended IFRS</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">On Jan. 1, 2013, the Corporation adopted the following new accounting standards that were previously issued by the IASB:</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">I. IFRS 10 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Consolidated Financial Statements</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 10 replaces the parts of IAS 27 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Consolidated and Separate Financial Statements </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">that deal with consolidated financial statements and Standing Interpretations Committee (&#147;SIC&#148;) Interpretation 12 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Consolidation - Special Purpose Entities</FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">. IFRS 10 defines the principle of control, establishes control as the basis for determining when entities are to be consolidated, and provides guidance on how to apply the principle of control to identify whether an investor controls an investee. Under IFRS 10, an investor controls an investee when it has all of the following: (i) power over the investee; (ii) exposure, or rights, to variable returns from the investee; and (iii) the ability to affect those returns.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 10 was applied retrospectively by the Corporation by reassessing whether, on Jan. 1, 2013, the Corporation had control of all of its previously consolidated entities. As a result of adopting IFRS 10, no changes arose in the entities controlled and consolidated by the Corporation.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">II. IFRS 11 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Joint Arrangements</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 11 replaces IAS 31 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Interests in Joint Ventures </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">and SIC-13 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Jointly Controlled Entities &#150; Non-Monetary Contributions by Venturers</FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">. IFRS 11 provides for a principles-based approach to the accounting for joint arrangements that requires an entity to recognize its contractual rights and obligations arising from its involvement in joint arrangements. A joint arrangement is an arrangement in which two or more parties have joint control. Under IFRS 11, joint arrangements are classified as either a joint operation or a joint venture, whereas under IAS 31, they were classified as a jointly controlled asset, jointly controlled operation or a jointly controlled entity. IFRS 11 requires the use of the equity method of accounting for interests in joint ventures, whereas IAS 31 permitted a choice of the equity method or proportionate consolidation for jointly controlled entities. Under IFRS 11, for joint operations, each party recognizes its respective share of the assets, liabilities, revenues and expenses of the arrangement, generally resulting in proportionate consolidation accounting.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 11 was applied retrospectively by the Corporation by reassessing the type of, and accounting for, each joint arrangement in existence at Jan. 1, 2013. No significant impacts resulted.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">III. IFRS 12 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Disclosure of Interests in Other Entities</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 12 contains enhanced disclosure requirements about an entity&#146;s interests in subsidiaries, joint arrangements, associates, and consolidated and unconsolidated structured entities (special purpose entities). The objective of IFRS 12 is that an entity should disclose information that helps financial statement users evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial statements. Disclosures arising from the adoption of IFRS 12 can be found in Notes 7, 10, and 18.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</font></b></P>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">IV. IFRS 13 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Fair Value Measurement</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRS 13 establishes a single source of guidance for all fair value measurements required by other IFRS, clarifies the definition of fair value, and enhances disclosures about fair value measurements. IFRS 13 applies when other IFRS require or permit fair value measurements or disclosures. IFRS 13 specifies how an entity should measure fair value and disclose fair value information. It does not specify when an entity should measure an asset, a liability, or its own equity instrument at fair value. The Corporation&#146;s adoption of IFRS 13, prospectively on Jan. 1, 2013, did not have a material financial impact upon the consolidated financial position or results of operations, however, certain new or enhanced disclosures are required and can be found in Note 11.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">V. IAS 1 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Presentation of Financial Statements</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amendments to IAS 1 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Presentation of Financial Statements </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">issued in June 2011 were intended to improve the consistency and clarity of the presentation of items of comprehensive income by requiring that items presented in Other Comprehensive Income (Loss) (&#147;OCI&#148;) be grouped on the basis of whether they are at some point reclassified from OCI to net earnings or not. The Consolidated Statements of Comprehensive Income (Loss) have been reorganized to comply with the required groupings.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">VI. IAS 19 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Employee Benefits</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amendments to IAS 19 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Employee Benefits </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">are intended to improve the recognition, presentation, and disclosure of defined benefit plans. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, thus eliminating the &#147;corridor approach&#148; previously permitted. All actuarial gains and losses must be recognized immediately through other comprehensive income and the net pension liability or asset recognized at the full amount of the plan deficit or surplus. Additional changes relate to the presentation, into three components, of changes in defined benefit obligations and plan assets: service cost and net interest cost is recognized in net earnings and remeasurements are recognized in other comprehensive income. The net interest cost introduced in these amendments removes the concept of expected return on plan assets that was previously recognized in net earnings.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation calculates the net interest cost for its defined benefit plans by applying the discount rate at the beginning of the reporting period to the net defined benefit liability at the beginning of the reporting period. An expected return on plan assets is no longer calculated and recognized as part of pension expense. The elimination of the corridor method had no impact as the Corporation has, since adoption of IFRS, recognized actuarial gains and losses in OCI in the period in which they occurred.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">On adoption, the Corporation applied the amendments retrospectively. The impacts as at Dec. 31, 2012 and Jan 1, 2012, respectively, were an increase in the cumulative prior periods&#146; pre-tax pension expense of &#36;17 million and &#36;11 million (&#36;12 million and &#36;8 million after-tax, respectively), as a result of the application of the net interest cost requirements.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">For the three months ended March 31, 2012, Operations, maintenance, and administration expense increased by &#36;1 million as a result of increased pension expense, Net actuarial losses on defined benefit plans as reported in OCI decreased by &#36;1 million, and basic and diluted net earnings per share attributable to common shareholders decreased by &#36;0.01.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">VII. Interpretation 20 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Stripping Costs in the Production Phase of a Surface Mine (&#147;IFRIC 20&#148;)</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">IFRIC 20 clarifies the requirements for accounting for stripping costs in the production phase of a surface mine. Stripping costs are costs associated with the process of removing waste from a surface mine in order to gain access to mineral ore deposits. The Interpretation clarifies when production stripping should lead to the recognition of an asset and how that asset should be measured, both initially and in subsequent periods.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</font></b></P>
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<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation recognizes a stripping activity asset for its Highvale mine when all of the following are met: (i) it is probable that the future benefit associated with improved access to the coal reserves associated with the stripping activity will be realized; (ii) the component of the coal reserve to which access has been improved can be identified; and (iii) the costs related to the stripping activity associated with that component can be measured reliably. Costs include those directly incurred to perform the stripping activity as well as an allocation of directly attributable overheads. The resulting stripping activity asset is amortized on a unit-of-production basis over the expected useful life of the identified component that it relates to. The amortization is recognized as a component of the standard cost of coal inventory.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">As required by the transitional provision of IFRIC 20, the Interpretation was applied by the Corporation to production stripping costs incurred on or after Jan. 1, 2011, which will be the earliest comparative period presented within the Corporation&#146;s annual financial statements for the year ended Dec. 31, 2013. The impacts on the Condensed Consolidated Statements of Financial Position as at Dec. 31, 2012 were to recognize &#36;9 million in costs as a stripping activity asset, increase coal inventory by &#36;2 million, both classified within Inventory, increase Deferred income tax liabilities by &#36;3 million, and decrease Retained deficit by &#36;8 million. The impacts on the Condensed Consolidated Statements of Financial Position as at Jan. 1, 2012 were to recognize &#36;9 million in costs as a stripping activity asset, decrease coal inventory by &#36;2 million, both classified within Inventory, increase Deferred income tax liabilities by &#36;2 million, and increase Retained earnings by &#36;5 million.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The impact of this change in accounting policy on the three months ended March 31, 2012 was not material.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">VIII. IFRS 7 </FONT></B><B><I><FONT size=1 face="Arial-BoldItalicMT,Arial,Helvetica,sans-serif">Financial Instruments: Disclosures</FONT></I></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amendments to IFRS 7 include disclosures about all recognized financial instruments that are set off in accordance with IAS 32. The amendments also require disclosure of information about recognized financial instruments subject to enforceable master netting arrangements and similar agreements even if they are not set off under IAS 32. The resulting disclosures can be found in Note 12.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">IX. Annual Improvements 2009-2011</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">In May 2012, the IASB issued a collection of necessary, non-urgent amendments to several IFRS resulting from its annual improvements process. The amendments, as applicable, have been applied by the Corporation on Jan. 1, 2013. None of the amendments, which are generally technical and narrow in scope, had a material financial impact upon the consolidated financial position or results of operations.</FONT></P>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Current Accounting Changes</FONT></B>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">I.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Change in Estimates - Useful Lives</FONT></B>	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">During the three months ended March 31, 2013, management completed a comprehensive review of the estimated useful lives of the hydro assets, having regard for, among other things, the economic life cycle maintenance program, and existing condition of the assets. As a result, depreciation was reduced by &#36;1 million for the three months ended March 31, 2013. Pre-tax depreciation expense is expected to be reduced by &#36;5 million for the year ended Dec. 31, 2013 and by &#36;5 million annually thereafter.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">II. Leases</FONT></B></P>
<P style="text-align: left;"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">Leases are classified as finance
leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Property,
plant and equipment (&#147;PP&amp;E&#148;) under finance leases are initially recognized at their fair value at the inception
of the lease, or if lower, at the present value of the minimum lease payments. The corresponding liability is included in the
Condensed Consolidated Statements of Financial Position as a finance lease obligation.</FONT> <FONT STYLE="font: 7pt Arial, Helvetica, Sans-Serif">Lease
payments are apportioned between interest expense and reduction of the lease obligation so as to achieve a constant rate of interest
on the remaining balance of the liability.</FONT></P>
<P style="text-align: left;">&nbsp;</P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">10</font></b></P>

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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">C. Future Accounting Changes</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additional new or amended accounting standards that have been previously issued by the IASB but are not yet effective, and have not been applied by the Corporation, are as follows: IFRS 9 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Financial Instruments</FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">, IAS 32 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Financial Instruments: Presentation</FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">, and </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Investment Entities </FONT></I><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(Amendments to IFRS 10 and 11 and IAS 27). Please refer to Note 3(D) of the Corporation&#146;s 2012 annual consolidated financial statements for more information.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 . S U N H I L L S&nbsp;&nbsp; M I N I N G&nbsp;&nbsp; L I M I T E D&nbsp;&nbsp; P A R T N E R S H I P</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Effective Jan. 17, 2013, the Corporation assumed, through its wholly owned SunHills Mining Limited Partnership (&#147;SunHills&#148;), operations and management control of the Highvale Mine from Prairie Mines and Royalty Ltd. (&#147;PMRL&#148;). PMRL employees working at the Highvale Mine were offered employment by SunHills which agreed to assume responsibility for certain pension plan and pension funding obligations, which had been previously funded by the Corporation through the payments made under the PMRL mining contracts. As a result, a pre-tax loss of &#36;29 million was recognized, along with the corresponding liabilities.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation also entered into a related finance lease for certain mining equipment that was used by PMRL in mining operations. As a result, &#36;21 million in mining equipment has been capitalized to PP&amp;E and the related finance lease obligation recognized. At the end of the lease term, the Corporation is eligible to purchase the assets, for a nominal amount. The amounts payable under the finance lease are as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=66%></TD>
     <TD width=15%></TD>
     <TD width=18%></TD></TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD align=center colspan=2 style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Minimum</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">lease</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">payments</FONT></B></p>
    </TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Present value of</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">minimum lease</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">payments</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Within one year</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Second to fifth years inclusive</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">12</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">23</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Less: interest cost</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total finance lease obligation</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Included in the Condensed Consolidated Statements of Financial Position
as:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:7.800003pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current portion of finance lease obligation</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-current finance lease obligation</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">12</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4 . D I S P O S A L S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">During the three months ended March 31, 2012, the Corporation realized a pre-tax gain of &#36;3 million related to the 2011 sale of its biomass facility. The gain resulted from the release of the remaining consideration related to the achievement of the Environmental Attribute Conditions by the purchaser.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</font></b></P>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5 . O P E R A T I N G &nbsp;&nbsp;L E A S E S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Several of the Corporation&#146;s Power Purchase Arrangements and other long-term contracts meet the criteria of operating leases. Total rental income, including contingent rent, related to these contracts reported in Revenues in the Condensed Consolidated Statements of Earnings for the three months ended March 31, 2013, was &#36;49 million (March 31, 2012 - &#36;42 million).</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=21%></TD>
     <TD width=16%></TD>
     <TD width=13%></TD>
     <TD width=20%></TD>
     <TD width=13%></TD>
     <TD width=15%></TD></TR>
<TR valign="bottom">
	<TD align=left colspan="2">
<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>6 . E X P E N S E S&nbsp;&nbsp; B Y&nbsp;&nbsp;</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>N A T U R E</B></FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=6>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=2>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Expenses classified by nature are as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=6>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=2>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2013</FONT></B></TD>
	<TD align=right colspan=2>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Fuel and</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">purchased</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">power</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Operations,</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">maintenance, and</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">administration</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fuel and</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">purchased</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">power</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Operations,</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">maintenance, and</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">administration</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fuel</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">171</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">139</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Purchased power</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Salaries and benefits</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">61</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">66</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280899pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other operating expenses</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">54</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">62</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total</FONT></TD>
	<TD STYLE="text-align: left; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">201</FONT></B></TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">115</FONT></B></TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">175</FONT></TD>
	<TD STYLE="text-align: right; border-top: 1 solid #000000; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">128</FONT></TD>
</TR>
</TABLE>
</DIV>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">*</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">See Note 2 for prior period restatements.</FONT></I>	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7 . I N V E S T M E N T S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation&#146;s investments in joint ventures accounted for using the equity method consist of its investments in CE Generation, LLC (&#147;CE Gen&#148;) and Wailuku River Hydroelectric, L.P (&#147;Wailuku&#148;).</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Summarized financial information on the results of operations and financial position relating to the Corporation&#146;s pro-rata interests in CE Gen and Wailuku is as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=48%></TD>
     <TD width=31%></TD>
     <TD width=19% colspan="3">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Results of operations</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">20</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">26</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Expenses</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(24)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(26)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Proportionate share of net loss</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;</font></b></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">12</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<a name="_bclPageBorder13"></a><DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Summarized financial information relating to 100 per cent of CE Gen, including adjustments for the application of consistent accounting policies and the Corporation&#146;s purchase price adjustments, is as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=41%></TD>
     <TD width=17%></TD>
     <TD width=3%></TD>
     <TD width=19%></TD>
     <TD width=3%></TD>
     <TD width=12%></TD>
     <TD width=3%></TD></TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">38</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">50</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">23</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000748pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Interest expense</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000519pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income tax recovery</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(15)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(10)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000809pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net loss from continuing operations</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(8)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:0.000580pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive loss</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total comprehensive loss</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(12)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Distributions received</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current assets</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">96</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">93</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term assets</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">674</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">675</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current liabilities</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(76)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(62)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term liabilities</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(403)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(409)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net assets</FONT></I></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">291</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">297</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Additional items included above</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cash and cash equivalents</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">29</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">27</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current financial liabilities</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(41)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(35)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term financial liabilities</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(238)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(233)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Excludes trade and other payables and provisions</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">A reconciliation of the carrying amount to the Corporation&#146;s 50 per cent interest in the CE Gen joint venture is as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=57%></TD>
     <TD width=22%></TD>
     <TD width=3%></TD>
     <TD width=14%></TD>
     <TD width=3%></TD></TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net assets</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">291</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">297</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Less: minority interest in CE Gen</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(14)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(14)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Less: 50 per cent of CE Gen's net assets not owned by the Corporation</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(112)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(116)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net investment</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">165</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">167</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">CE Gen&#146;s ability to make distributions to its owners, including the Corporation, is restricted by covenants and conditions, including principal and interest funding deposit requirements, imposed by certain project-related debt agreements.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=59%></TD>
     <TD width=29%></TD>
     <TD width=3%></TD>
     <TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left colspan=2>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">At March 31, 2013 the carrying amount of Wailuku&#146;s net investment is &#36;5 million (Dec. 31, 2012 - &#36;5 million).</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8 . N E T &nbsp;&nbsp;I N T E R E S T &nbsp;&nbsp;E X P E N S E</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The components of net interest expense are as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD STYLE="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Interest on debt</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">60</FONT></B></TD>
	<TD>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">56</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Capitalized interest</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD style="border-bottom: 1 solid #000000">&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Interest expense</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">58</FONT></B></TD>
	<TD>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">56</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accretion of provisions </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 17)</FONT></I></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net interest expense</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">62</FONT></B></TD>
	<TD style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">60</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">13</font></b></P>
</DIV>

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<a name="_bclPageBorder14"></a><DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation capitalizes interest during the construction phase of growth capital projects. The capitalized interest in 2013 related to the New Richmond wind farm.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=68%></TD>
     <TD width=21%></TD>
     <TD width=3%></TD>
     <TD width=4%></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9 . I N C O M E &nbsp;&nbsp;T A X E S</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The components of income tax expense are as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.278412pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current income tax expense</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred income tax expense (recovery) related to the origination and
reversal of temporary differences</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(19)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.278275pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred income tax recovery resulting from changes in tax rates or laws</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(6)</FONT></B></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.278809pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Benefit arising from previously unrecognized tax loss, tax credit, or temporary
difference of a prior period used to reduce current income tax expense</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(14)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.278854pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Benefit arising from previously unrecognized tax loss, tax credit, or temporary
difference of a prior period used to reduce deferred income tax expense</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(10)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Income tax expense (recovery)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(17)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=2 style="TEXT-INDENT:5.279999pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Relates to the impact of adjusting the deferred tax rate to incorporate the Ontario M&amp;P tax credit. Previously, the Corporation
had been using the Ontario general corporate tax rate of 11.5 per cent.</FONT></I></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Presented in the Condensed Consolidated Statements of Earnings (Loss) as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.278214pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current income tax expense (recovery)</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;Deferred income tax expense (recovery)</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(25)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Income tax expense (recovery)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(17)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</font></b></P>
</DIV>

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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 0 . N O N - C O N T R O L L I N G &nbsp;&nbsp;I N T E R E S T S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation&#146;s subsidiaries and operations that have non-controlling interests are as follows:</FONT></P>
<P style="text-align: left;"></P></DIV>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%; border-bottom: 1 solid #000000"><p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif"><b>Subsidiary/Operation</b></font></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: 1 solid #000000"><p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif"><b>&nbsp;</b></font></p>
    </TD>
    <TD STYLE="width: 56%; border-bottom: 1 solid #000000"><p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif"><b>Non-controlling
                           interest</b></font></p>
    </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">TransAlta Cogeneration L.P. ("TA
Cogen&quot;)</font></p>
    </TD>
    <TD>
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;</font></p>
    </TD>
    <TD>
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">49.99% - Stanley Power Inc.</font></p>
    </TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="border-bottom: 1 solid #000000"><p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">Kent Hills wind farm</font></p>
    </TD>
    <TD STYLE="border-bottom: 1 solid #000000">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;</font></p>
    </TD>
    <TD STYLE="border-bottom: 1 solid #000000">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">17% - Natural Forces Technologies Inc.</font></p>
    </TD></TR>
</TABLE>

<DIV STYLE="padding-left: 0%; padding-right: 0%"><P STYLE="text-align: left"><FONT STYLE="font: xx-small Arial-BoldMT,Arial,Helvetica,sans-serif"><B>&nbsp;</B></FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Summarized financial information relating to TA Cogen, the subsidiary with a significant non-controlling interest, is as follows:</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=277></TD>
     <TD width=240 colspan="2" valign="bottom" align="center">
      <p align="center"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 279px">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; width: 176px">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; width: 68px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">80</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">84</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">18</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total comprehensive income</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">32</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
</TR>
<TR>
	<TD colspan=3 width="542">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amounts attributable to the non-controlling interest:</FONT></TD>
	<TD align=left width="174">
&nbsp;</TD>
	<TD align=left width="66">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center width="277">
<p align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings</FONT></p>
    </TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 4.091827pt" width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total comprehensive income</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">16</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5</FONT></TD>
</TR>
<TR>
	<TD colspan=3 width="542">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 279px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Distributions paid to Stanley Power Inc.</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; width: 176px">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">18</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; width: 68px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">19</FONT></TD>
</TR>
<TR>
	<TD colspan=3 width="542">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1px solid #000000" width="279">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD align=right style="border-bottom: 1px solid #000000" width="176">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=right style="border-bottom: 1px solid #000000" width="68">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current assets</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">58</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">70</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term assets</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">662</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">678</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current liabilities</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(63)</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(75)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term liabilities</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(76)</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(87)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left width="277">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total equity</FONT></TD>
	<TD align=right width="174">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(581)</FONT></B></TD>
	<TD align=right width="66">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(588)</FONT></TD>
</TR>
<TR>
	<TD colspan=3 width="542">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1px solid #000000" width="279">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity attributable to the non-controlling interest</FONT></TD>
	<TD align=right style="border-bottom: 1px solid #000000" width="176">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(288)</FONT></B></TD>
	<TD align=right style="border-bottom: 1px solid #000000" width="68">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(290)</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<DIV align="left">
<TABLE border=0 cellspacing=0>
<TR>
     <TD width=100%></TD></TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 1 . F I N A N C I A L &nbsp;&nbsp;I N S T R U M E N T S</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;
<p>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Financial Assets and Liabilities - Classification and Measurement</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Financial assets and financial liabilities are measured on an ongoing basis at cost, fair value, or amortized cost.</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Fair Value of Financial Instruments</FONT></B>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">I.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Energy Trading</FONT></B>	</TD>
</TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy trading includes risk management assets and liabilities that are used in the Energy Trading and Generation segments in relation to trading activities and certain contracting activities. To the extent applicable, changes in net risk management assets and liabilities for non-hedge positions are reflected within earnings of the Energy Trading and Generation business segments.</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">15</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<P align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The following tables summarize the key factors impacting the fair value of energy trading risk management assets and liabilities by classification level during the three months ended March 31, 2013 and 2012, respectively:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=24%></TD>
     <TD width=4%></TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=7%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=7%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=2%></TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=5%></TD>
     <TD STYLE="width: 2%">&nbsp;</TD></TR>
<TR valign="bottom">
	<TD STYLE="text-align: left">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" colspan="4">
<p align="center">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Hedges</FONT></B>&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Non-Hedges</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000" align="right">
<p align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></p>
    </TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000" align="right">
<p align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000" align="right">
<p align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:1.920013pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management assets (liabilities) at</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(63)</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">79</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">28</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">16</FONT></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">31</FONT></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:1.920013pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Changes attributable to:</FONT></TD>
	<TD align=right>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.360001pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on existing</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">contracts</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(10)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(19)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(29)</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.360001pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on new contracts</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2</FONT>)</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(10)</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(17)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(12)</font></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(17)</FONT></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contracts settled</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000" align="right">
<p align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif"></FONT>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(3)</font></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:1.920013pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net risk management assets</FONT></B></TD>
	<TD align=right>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(liabilities) at March 31, 2013</FONT></B></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000" align="right">
<p align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(73)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">45</font></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">17</font></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(28)</font></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">17</font></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Additional Level III gain (loss) information:</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">
&nbsp;</font></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:1.920013pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in fair value included in OCI</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=center>
<p align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=center>
<p align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.091827pt"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">Total losses included
 in earnings</FONT>  <font face="Arial" size="1">before income taxes</font></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif"></FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD STYLE="text-align: left">&nbsp;</TD>
</TR>
<TR STYLE="vertical-align: bottom">
        <TD STYLE="text-align: left; text-indent: 4.09pt; border-bottom: 1 solid #000000"><font face="Arial" size="1">Unrealized gain included in earnings before
        income taxes relating to net assets held at March 31, 2013</font></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: right; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: right; border-bottom: 1 solid #000000"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(11)</font></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
        <TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;</TD>
        <TD STYLE="text-align: right; border-bottom: 1 solid #000000"><font size="1" face="ArialMT,Arial,Helvetica,sans-serif">(11)</font></TD>
        <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>

<P STYLE="margin: 0px">&nbsp;</P>

<P STYLE="margin: 0px">&nbsp;</P>

<P STYLE="margin: 0px"></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=25%></TD>
     <TD width=6%></TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=7%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=7%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=6%></TD>
     <TD width=6%></TD>
     <TD width=2%>&nbsp;</TD>
     <TD width=5%></TD>
     <TD width=2%>&nbsp;</TD></TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Hedges</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-Hedges</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level I</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level I</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level I</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></TD>
	<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:3.960007pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management assets (liabilities) at</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:8.051834pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2011</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(90)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(14)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">287</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">197</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7</FONT>)</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:3.960007pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Changes attributable to:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:11.279663pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on existing</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:3.960007pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">contracts</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">16</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">37</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">53</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">14</FONT></TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:11.280014pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on new contracts</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:11.280014pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contracts settled</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(67)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(60)</FONT></TD>
	<TD align=left>&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:11.278595pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Discontinued hedge accounting on</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">certain contracts</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(26)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">26</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD>&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;&nbsp;&nbsp;&nbsp;</P>
<DIV align="left">
<TABLE BORDER="0" CELLSPACING="0" height="234" width="100%">
<TR>
     <TD height="21" width="449"></TD>
     <TD height="21" width="69"></TD>
     <TD height="21" width="96"></TD>
     <TD height="21" width="34">&nbsp;</TD>
     <TD height="21" width="111"></TD>
     <TD height="21" width="134">&nbsp;</TD>
     <TD height="21" width="119"></TD>
     <TD height="21" width="126"></TD>
     <TD COLSPAN="2" height="21" width="233"></TD>
     <TD COLSPAN="2" height="21" width="144"></TD></TR>
<TR valign="bottom">
	<TD STYLE="text-align: left" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management assets</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="111">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="126">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="144">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23" width="451">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(liabilities) at March 31, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="71">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="98">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(93)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23" width="36">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="113">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(7)</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="136">-</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="121">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">287</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="128">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="134"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">-
</FONT></TD>

 <TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="99"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">194</FONT></TD><TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23" width="113"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">6</FONT>
 <TD STYLE="text-align: left; border-bottom-color: #000000; border-bottom-width: 1" height="23" width="29">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additional Level III gain (loss) information:&nbsp;</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="111">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="126">
&nbsp;&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="144">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in fair value included in OCI</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;</TD>
	<TD STYLE="text-align: right" height="21" width="111">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: right" height="21" width="126">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;</TD>
	<TD STYLE="text-align: right" height="21" width="111"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">7</FONT>
 <TD STYLE="text-align: left" height="21" width="29">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total gains (losses) included in earnings</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="111">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="126">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="144">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.09pt" height="22" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">before income taxes</FONT></TD>
	<TD STYLE="text-align: right" height="22" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="22" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="22" width="34">&nbsp;</TD>
	<TD STYLE="text-align: right" height="22" width="111">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD STYLE="text-align: left" height="22" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="22" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: right" height="22" width="126">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="22" width="233">
&nbsp;</TD>
	<TD STYLE="text-align: right" height="22" width="111"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">7</FONT>
 <TD STYLE="text-align: left" height="22" width="29">&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unrealized gain included in earnings before</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="111">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="126">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="144">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.09pt" height="21" width="449">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">income taxes relating to net assets held</FONT></TD>
	<TD STYLE="text-align: right" height="21" width="69">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="96">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="34">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="111">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="134">&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="119">
&nbsp;</TD>
	<TD STYLE="text-align: left" height="21" width="126">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="233">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left" height="21" width="144">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="451">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;at March 31, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22" width="71">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="98">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="36">&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22" width="113">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="136">&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="121">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22" width="128">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD COLSPAN="2" STYLE="text-align: left; border-bottom: 1 solid #000000" height="22" width="235"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22" width="113"><FONT STYLE="font-size: 8pt">6</FONT><TD STYLE="text-align: right; border-bottom-color: #000000; border-bottom-width: 1" height="22" width="29"></TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">16</font></b></P>
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<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="100%" colspan="2">
<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>a.</B></FONT>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvet</P>
                 <P STYLE="margin-top: 0; margin-bottom: 0">Levels II and III Fair Value Measurements</FONT></B> 	</TD>
</TR>
<TR>
        <TD NOWRAP STYLE="vertical-align: top">&nbsp;</TD>
        <TD>&nbsp;</TD></TR>
<TR>
	<TD nowrap valign=top width="100%" colspan="2"><B>
                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">i.</FONT></B>
     <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif"><B>Level II</B></FONT></P></TD>
</TR>
</TABLE>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fair values are determined, directly or indirectly, using inputs that are observable for the asset or liability.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fair values falling within the Level II category are determined through the use of quoted prices in active markets, which in some cases are adjusted for factors specific to the asset or liability, such as basis, credit valuation, and location differentials.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy Trading includes, in Level II, over-the-counter derivatives with values based on observable commodity futures curves and derivatives with inputs validated by broker quotes or other publicly available market data providers. Level II fair values are also determined using valuation techniques, such as option pricing models and regression or extrapolation formulas, where the inputs are readily observable, including commodity prices for similar assets or liabilities in active markets, and implied volatilities for options.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">ii. Level III</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fair values are determined using inputs for the asset or liability that are not readily observable.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy Trading may enter into commodity transactions for which market-observable data is not available. In these cases, Level III fair values are determined using valuation techniques such as the Black-scholes, Mark-to-forecast, and Historical bootstrap models with inputs that are based on historical data such as unit availability, transmission congestion, demand profiles for individual nonstandard deals and structured products, and/or volatilities and correlations between products derived from historical prices.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy Trading also has various contracts with terms that extend beyond a liquid trading period. As forward price forecasts are not available for the full period of these contracts, the value of these contracts is derived by reference to a forecast that is based on a combination of external and internal fundamental modelling, including discounting. As a result, these contracts are classified in Level III.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Policies and procedures regarding energy trading Level III fair value measurements are determined by the Corporation&#146;s Risk Management department, in compliance with the Corporation&#146;s Commodity Exposure Management Policy (&#147;the Policy&#148;), which governs both the commodity transactions undertaken in its proprietary trading business and those undertaken to manage commodity price exposures in its generation business.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Policy defines and specifies the controls and management responsibilities associated with commodity trading activities, as well as the nature and frequency of required reporting of such activities. Level III fair values are calculated within the Corporation&#146;s Energy Trading Risk Management system based on underlying contractual data and observable and non-observable inputs. Development of non-observable inputs requires the use of judgment. To ensure reasonability, system generated Level III fair value measurements are reviewed and validated by Risk Management personnel. Review occurs formally on a quarterly basis or more frequently if daily review and monitoring procedures identify unexpected changes to fair value, or changes to key parameters.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The effect of using reasonably possible alternative assumptions as inputs to valuation techniques from which the Level III energy trading fair values are determined at March 31, 2013 is estimated to be +/- &#36;29 million (Dec. 31, 2012 - &#36;26 million). Fair values are stressed for volumes and prices. The volumes are stressed up and down one standard deviation from historically available production data. Prices are stressed for longer term deals where there are no liquid market quotes using various internal and external forecasting sources to establish a high and a low price range.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</font></b></P>
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<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Information about the significant unobservable inputs used in determining Level III fair values is as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 height="326" width="100%">
<TR>
     <TD width=19% height="21"></TD>
     <TD width=16% height="21"></TD>
     <TD width=18% height="21"></TD>
     <TD width=24% height="21"></TD>
     <TD width=14% height="21"></TD></TR>
<TR valign="bottom">
	<TD align=left height="46" style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Description</FONT></B></p>
    </TD>
	<TD HEIGHT="48" STYLE="text-align: right; vertical-align: bottom; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Fair value as at</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></p>
    </TD>
	<TD HEIGHT="46" STYLE="text-align: right; vertical-align: bottom; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Valuation</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Technique</FONT></B></p>
    </TD>
	<TD HEIGHT="46" STYLE="text-align: right; vertical-align: bottom; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Unobservable input</FONT></B></p>
    </TD>
	<TD HEIGHT="46" STYLE="text-align: right; vertical-align: bottom; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Range</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Price discount</FONT></TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1 - 2 per cent</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; height: 29px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unit power contingent purchases</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 29px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 29px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Historical bootstrap</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 29px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Volumetric discount</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 29px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1 - 8 per cent</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Illiquid future</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; height: 15px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long term power sale</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 15px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(11)</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 15px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Mark-to-forecast</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 15px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">power prices</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 15px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">$40.30 - &#36;83.50</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">16 - 25 per cent</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Volumes (MWh)</FONT></TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">of capacity</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Coal supply</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Illiquid future implied</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; height: 20px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">revenue sharing</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 20px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(13)</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 20px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Black-scholes</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 20px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">volatilities in MidC power</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; height: 20px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">29 per cent</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Volumetric discount</FONT></TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0 per cent</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Unit contingent</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Illiquid future implied</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; height: 20px; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">power sales</FONT></TD>
	<TD STYLE="text-align: right; height: 20px; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
	<TD STYLE="text-align: right; height: 20px; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Black-scholes</FONT></TD>
	<TD STYLE="text-align: right; height: 20px; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">volatilities in MidC power</FONT></TD>
	<TD STYLE="text-align: right; height: 20px; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">39 per cent</FONT></TD>
</TR>
</TABLE>
</DIV>
<P align="left">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) A change in the volumetric discount, could, depending on other market dynamics, result in a directionally similar change in the price discount.</FONT></I></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">II. Other Risk Management Assets and Liabilities</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other risk management assets and liabilities primarily include risk management assets and liabilities that are used in hedging non-energy trading transactions, such as interest rates, the net investment in foreign operations, and other foreign currency risks.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The following tables summarize the key factors impacting the fair value of other risk management assets and liabilities by classification level during the three months ended March 31, 2013 and 2012, respectively:</FONT></P>
<DIV align="left">
<TABLE BORDER="0" CELLSPACING="0" STYLE="width: 100%">
<TR>
     <TD STYLE="width: 366px"></TD>
     <TD STYLE="width: 113px"></TD>
     <TD STYLE="width: 46px"></TD>
     <TD STYLE="width: 113px"></TD>
     <TD STYLE="width: 30px">&nbsp;</TD>
     <TD STYLE="width: 97px"></TD>
     <TD STYLE="width: 132px"></TD>
     <TD STYLE="width: 95px"></TD>
     <TD STYLE="width: 29px">&nbsp;</TD>
     <TD STYLE="width: 129px"></TD>
     <TD STYLE="width: 112px"></TD>
     <TD STYLE="width: 112px"></TD>
     <TD STYLE="width: 29px">&nbsp;</TD>
     <TD STYLE="width: 96px"></TD></TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; width: 366px">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: #000000 1 solid; width: 115px">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: #000000 1 solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Hedges</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 32px">&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 99px">
&nbsp;</TD>
	<TD COLSPAN="4" STYLE="text-align: left; text-indent: 30.36pt; border-bottom: Black 1pt solid">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Non-Hedges</FONT></B>&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 114px">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; width: 114px">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 31px">&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 98px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 368px">
&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 115px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level I</FONT></B></p>
    </TD>
	<TD COLSPAN="2" STYLE="border-bottom: #000000 1 solid; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Level II&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></p>
    </TD>
	<TD COLSPAN="2" STYLE="text-align: center; border-bottom: #000000 1 solid; text-align: center">
<p align="center"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Level III</FONT></B></TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 134px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 97px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 131px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 98px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management liabilities at</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.09pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 22.08pt; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(50)</FONT></TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 20.4pt; width: 132px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(49</FONT>)</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Changes attributable to:</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 7.31pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on existing</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.09pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">contracts</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 22.08pt; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">28</FONT></TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 20.4pt; width: 132px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">28</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 7.31pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">New contracts</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 22.08pt; width: 113px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 20.4pt; width: 132px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 368px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contracts settled</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 115px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 48px; text-align: center">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 115px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 32px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 99px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 134px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 97px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1</FONT>)</p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 131px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 98px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; width: 366px">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net risk management assets</FONT></B></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 368px">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(liabilities) at March 31, 2013</FONT></B></TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 115px">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 48px; text-align: center">
&nbsp;&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 115px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(26)</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 32px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 99px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 134px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 97px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 131px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 114px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(25)</FONT></B></p>
    </TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: Black 1pt solid; width: 98px; text-align: center">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></p>
    </TD>
</TR>
<TR>
	<TD COLSPAN="14">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; width: 366px">
&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 48px; text-align: center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Hedges</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 32px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 99px; text-align: center">
&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 134px; text-align: center">
&nbsp;</TD>
	<TD COLSPAN="3" STYLE="text-align: center; border-bottom: #000000 1 solid; text-align: center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-Hedges</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 98px; text-align: center">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; width: 368px">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: left; text-indent: 23.88pt; border-bottom: #000000 1 solid; text-align: center">
<p align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;Level I</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 115px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 32px">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 99px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-indent: 19.56pt; width: 134px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;Level I</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 97px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 131px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 114px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level I</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 114px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 31px">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 98px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level III</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 0.6pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management assets</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.69pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(liabilities) at Dec. 31, 2011</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
-</TD>
	<TD STYLE="text-align: center; text-indent: 0pt; width: 46px">
    </TD>
	<TD STYLE="text-align: center; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(50)</FONT></TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 29.16pt; width: 132px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(50)</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 0.6pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Changes attributable to:</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 7.91pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Market price changes on existing</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
-</TD>
	<TD STYLE="text-align: center; text-indent: 0pt; width: 46px">
    </TD>
	<TD STYLE="text-align: center; width: 113px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(12)</FONT></TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 29.16pt; width: 132px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(12)</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 4.69pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">contracts</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 46px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 7.91pt; width: 366px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">New contracts</FONT></TD>
	<TD STYLE="text-align: center; width: 113px">
-</TD>
	<TD STYLE="text-align: center; width: 46px">
    </TD>
	<TD STYLE="text-align: center; width: 113px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 97px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; text-indent: 29.16pt; width: 132px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: center; width: 95px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 129px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; width: 112px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
	<TD STYLE="text-align: center; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: center; width: 96px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: #000000 1 solid; width: 368px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Contracts settled</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
<p align="center">
-</p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 48px; text-align: center">
    &nbsp;&nbsp;&nbsp;
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 32px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 99px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 134px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 97px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 131px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 98px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 0.59pt; border-bottom: #000000 1 solid; width: 368px">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net risk management liabilities at March 31, 2012</FONT></TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
<p align="center">
&nbsp;-&nbsp;</p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 48px; text-align: center">
    &nbsp;&nbsp;
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 115px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(59)</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 32px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 99px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-indent: 29.15pt; text-align: center; width: 134px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 97px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 131px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 114px; text-align: center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(61)</FONT></p>
    </TD>
	<TD STYLE="border-bottom: #000000 1 solid; width: 31px; text-align: center">&nbsp;</TD>
	<TD STYLE="border-bottom: #000000 1 solid; text-align: center; width: 98px">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 6.47pt; width: 366px">
    </TD>
	<TD STYLE="text-align: left; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 46px">
&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; width: 113px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 30px">&nbsp;</TD>
	<TD STYLE="text-align: left; width: 97px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 132px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 95px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: left; width: 129px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 112px">
&nbsp;</TD>
	<TD STYLE="text-align: left; width: 29px">&nbsp;</TD>
	<TD STYLE="text-align: right; width: 96px">
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">
&nbsp;</P>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">18</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



<DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">a. Level II Fair Value Measurements</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fair values are determined, directly or indirectly, using inputs that are observable for the asset or liability.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Level II fair values of other risk management assets and liabilities are determined using valuation techniques, such as discounted cash flow methods. The Corporation uses observable inputs other than unadjusted quoted prices that are observable for the asset or liability, such as interest rate yield curves, credit valuation adjustments, and currency rates. For certain financial instruments where insufficient trading volume or lack of recent trades exists, the Corporation relies on similar interest or currency rate inputs and other third party information such as credit spreads.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=46%></TD>
     <TD width=18%></TD>
     <TD width=9%></TD>
     <TD width=9%></TD>
     <TD width=7%></TD>
     <TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">III. Other Financial Assets and Liabilities</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=6>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=3>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The fair value of financial assets and liabilities measured at other than fair value is as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left colspan="3">
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=center rowspan="3" style="border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">carrying</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">value</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;" colspan="4">
<p align="center">
&nbsp;&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Fair value</FONT><SUP><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level I</FONT></B></TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level II</FONT></B></TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Level III</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:13.080002pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Long-term debt - March 31, 2013</FONT></B></TD>
	<TD align=center>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=center>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4,409</FONT></B></TD>
	<TD align=center>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4,409</FONT></B></TD>
	<TD align=center>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4,231</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term debt - Dec. 31, 2012</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,426</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" align="center">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,426</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,217</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Includes current portion.</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The fair values of the Corporation&#146;s debentures and senior notes are determined using prices observed in secondary markets. Non-recourse and other long-term debt fair values are determined by calculating an implied price based on a current assessment of the yield to maturity.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The book value of other short-term financial assets and liabilities (cash and cash equivalents, accounts receivable, collateral paid, accounts payable and accrued liabilities, collateral received, and dividends payable) approximates fair value due to the liquid nature of the asset or liability.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">C. Inception Gains and Losses</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">An inception gain or loss arises due to differences between the fair value of a financial instrument at initial recognition (the transaction price) and the amount calculated through a valuation model. The unrealized gain or loss related to Level III financial instruments is deferred in risk management assets or liabilities, and is recognized in net earnings over the term of the related contract. At March 31, 2013, the unamortized gain is &#36;3 million (Dec. 31, 2012 - &#36;5 million gain).</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">19</font></b></P>
</DIV>

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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 2 . R I S K &nbsp;&nbsp;M A N A G E M E N T &nbsp;&nbsp;A C T I V I T I E S</FONT></B></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Risk Management Assets and Liabilities</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Aggregate risk management assets and liabilities are as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=26%></TD>
     <TD width=10%></TD>
     <TD width=8%></TD>
     <TD width=13%></TD>
     <TD width=10%></TD>
     <TD width=7%></TD>
     <TD width=10%></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<p align="left">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">investment</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">hedges</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Cash flow</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">hedges</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Fair value</FONT></B>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">hedges</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Not</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">designated</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">as a hedge</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif"><b>Total</b></FONT>&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Risk management assets</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630249pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Energy trading</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630249pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">118</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">118</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">198</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">50</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">53</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">59</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280823pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total energy trading risk</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">management assets</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">168</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">171</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">257</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Other</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.28pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total other risk management assets</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">15</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Risk management liabilities</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630249pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Energy trading</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630249pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">73</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">94</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">141</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 9.63pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">55</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">33</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">88</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">70</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280823pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total energy trading risk</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">76</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">106</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">182</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">211</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">management liabilities</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Other</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630249pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">16</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">26</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">24</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">24</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">36</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281235pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total other risk</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">36</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">40</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">62</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 9.63pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">management liabilities</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD ROWSPAN="2" STYLE="text-align: left; text-indent: 5.27pt; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net energy trading risk</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">management assets (liabilities)</FONT></B></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(73)</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">62</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(11)</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">46</FONT></TD>
</TR>
<TR valign="bottom">
	<TD ROWSPAN="2" STYLE="text-align: left; text-indent: 5.27pt; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net other risk management</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">assets (liabilities)</FONT></B></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(33)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(25)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(49)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" rowspan="2">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Net total risk management</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">assets (liabilities)</FONT></B></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD STYLE="text-align: right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(106)</FONT></B></TD>
	<TD STYLE="text-align: right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9</FONT></B></TD>
	<TD STYLE="text-align: right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">63</FONT></B></TD>
	<TD STYLE="text-align: right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(36)</FONT></B></TD>
	<TD STYLE="text-align: right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
</TR>
<TR>
	<TD COLSPAN="7" STYLE="border-top: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=4>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additional information on derivative instruments has been presented on a net basis below.</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">20</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<a name="_bclPageBorder21"></a><DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">I. Netting Arrangements</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Information about the Corporation&#146;s financial management assets and liabilities that are subject to enforceable master netting arrangements or similar agreements is as follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=16%></TD>
     <TD width=7%></TD>
     <TD width=8%></TD>
     <TD width=7%></TD>
     <TD width=9%></TD>
     <TD width=7%></TD>
     <TD width=6%></TD>
     <TD width=6%></TD>
     <TD width=5%></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Current</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">financial</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">assets</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Long-term</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">financial</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">assets</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Current</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">financial</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">liabilities</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Long-term</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">financial</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">liabilities</FONT></B></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">financial</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">assets</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">term</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">financial</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">assets</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Current</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">financial</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">liabilities</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" align="right">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">term</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">financial</FONT>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">liabilities</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gross amounts recognized</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">536</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">93</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(504)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(106)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">522</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">331</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(452)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(317)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gross amounts set-off</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(301)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(10)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">301</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">10</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(252)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(186)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">252</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">186</FONT></TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net amounts as presentedin the Condensed
Consolidated Statements of</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Financial Position</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">235</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">83</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(203)</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(96)</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">270</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">145</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(200)</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(131)</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Excludes credit reserves.</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">II.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Hedges</FONT></B>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">a.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Cash Flow Hedges</FONT></B>	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">i.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Energy Trading Risk Management</FONT></B>	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Certain of TransAlta&#146;s hedging relationships had previously been de-designated and deemed ineffective for accounting purposes. The hedges were in respect of power production and the associated gains remain in Accumulated Other Comprehensive Income (Loss) (&#147;AOCI&#148;) until the underlying production occurs or until such time that the production has been assessed as highly probable not to occur. No gains related to these previously de-designated hedges were reclassified to earnings during the three months ended March 31, 2013 (March 31, 2012 - &#36;75 million pre-tax gain).</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">As at March 31, 2013, cumulative gains of &#36;7 million related to cash flow hedges that were de-designated and no longer meet the criteria for hedge accounting continued to be deferred in AOCI and will be reclassified to net earnings as the forecasted transactions occur or if the forecasted transactions are assessed as highly probable not to occur.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">ii. Cash Flow Hedge Impacts</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Over the next 12 months ended March 31, 2014, the Corporation estimates that &#36;29 million of after-tax losses will be reclassified from AOCI to net earnings. These estimates assume constant natural gas and power prices, interest rates, and exchange rates over time; however, the actual amounts that will be reclassified will vary based on changes in these factors.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Nature and Extent of Risks Arising from Financial Instruments</FONT></B></P>
<P align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The following discussion is limited to the nature and extent of certain risks arising from financial instruments, which are also more fully discussed in Note 16(B) of the most recent annual consolidated financial statements.</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</font></b></P>
</DIV>

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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">I. Commodity Price Risk</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Value at Risk (&#147;VaR&#148;) is the most commonly used metric employed to track and manage the market risk associated with commodity and other derivatives. VaR is used to determine the potential change in value of the Corporation&#146;s proprietary trading portfolio, over a three day period within a 95 per cent confidence level, resulting from normal market fluctuations. VaR is estimated using the historical variance/covariance approach.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">a. Commodity Price Risk - Proprietary Trading</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation&#146;s Energy Trading Segment conducts proprietary trading activities and uses a variety of instruments to manage risk, earn trading revenue, and gain market information.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">VaR at March 31, 2013 associated with the Corporation&#146;s proprietary energy trading activities was &#36;2 million (Dec. 31, 2012 - &#36;2 million).</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">b. Commodity Price Risk - Generation</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Generation Segment utilizes various commodity contracts and other financial instruments to manage the commodity price risk associated with its electricity generation, fuel purchases, emissions, and byproducts, as considered appropriate. VaR at March 31, 2013 associated with the Corporation&#146;s commodity derivative instruments used in generation hedging activities was &#36;3 million (Dec. 31, 2012 - &#36;5 million). VaR at March 31, 2013 associated with positions and economic hedges that do not meet hedge accounting requirements was &#36;7 million (Dec. 31, 2012 - &#36;9 million).</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">II. Credit Risk</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Credit risk is the risk that customers or counterparties will cause a financial loss for the Corporation by failing to discharge their obligations, and the risk to the Corporation associated with changes in creditworthiness of entities with which commercial exposures exist.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation uses external credit ratings, as well as internal ratings in circumstances where external ratings are not available, to establish credit limits for customers and counterparties. The following table outlines the distribution, by credit rating, of certain financial assets as at March 31, 2013:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=33%></TD>
     <TD width=32%></TD>
     <TD width=26%></TD>
     <TD width=7%></TD></TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Per cent)</FONT></I></TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Investment grade</FONT></B></TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Non-investment grade</FONT></B></TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts receivable</FONT></TD>
	<TD align=center>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">88</FONT></TD>
	<TD align=center>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
	<TD align=center>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">100</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Risk management assets</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">97</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">100</FONT></B></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation&#146;s maximum exposure to credit risk at March 31, 2013, without taking into account collateral held or right of set-off, is represented by the carrying amounts of accounts receivable and risk management assets as per the Condensed Consolidated Statements of Financial Position. Letters of credit and cash are the primary types of collateral held as security related to these amounts. The maximum credit exposure to any one counterparty for commodity trading operations and hedging, excluding the California market receivables (Refer to Note 36 of the 2012 annual consolidated financial statements), and including the fair value of open trading positions, net of any collateral held, at March 31, 2013 was &#36;21 million (Dec. 31, 2012 - &#36;25 million).</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">At March 31, 2013, TransAlta had one counterparty whose net settlement position accounted for greater than 10 per cent of the total trade receivables outstanding. The Corporation has evaluated the risk of default related to this counterparty to be minimal.</FONT></P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">22</font></b></P>

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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">III. Liquidity Risk</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Liquidity risk relates to the Corporation&#146;s ability to access capital to be used for proprietary trading activities, commodity hedging, capital projects, debt refinancing, and general corporate purposes.</FONT></P>
<P style="text-align: left;"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">A maturity analysis of the Corporation&#146;s financial liabilities is as
follows:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2014</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2015</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2016</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2017</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: middle">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>2018 and</B></FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>thereafter</B></FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid; vertical-align: middle">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B>&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts payable and accrued liabilities</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">450</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">450</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Collateral received</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280670pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Debt</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">618</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">209</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">665</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">647</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,081</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,222</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279984pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy trading risk management (assets) liabilities</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(14)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(23)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">18</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280762pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other risk management (assets) liabilities</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">19</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281204pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Interest on long-term debt</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></SUP></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">161</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">186</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">154</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">138</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">129</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">821</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1,589</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dividends payable</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">76</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">76</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1,303</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">374</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">849</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">804</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">141</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,903</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">6,374</FONT></B></TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Excludes impact of hedge accounting and includes drawn credit facilities that are currently scheduled to mature in 2013, 2014, and 2016.</FONT></I></P>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(2) Not recognized as a financial liability on the Condensed Consolidated Statements of Financial Position</FONT></I></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">C. Collateral and Contingent Features in Derivative Instruments</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Collateral is posted in the normal course of business based on the Corporation&#146;s senior unsecured credit rating as determined by certain major credit rating agencies. Certain of the Corporation&#146;s derivative instruments contain financial assurance provisions that require collateral to be posted only if a material adverse credit-related event occurs. If a material adverse event resulted in the Corporation&#146;s senior unsecured debt to fall below investment grade, the counterparties to such derivative instruments could request ongoing full collateralization.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">As at March 31, 2013, the Corporation had posted collateral of &#36;79 million (Dec. 31, 2012 - &#36;85 million) in the form of letters of credit on derivative instruments in a net liability position. Certain derivative agreements contain credit-risk-contingent features, including a credit rating downgrade to below investment grade, which if triggered would result in the Corporation having to post an additional &#36;92 million of collateral to its counterparties based upon the value of the derivatives at March 31, 2013.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 3 . R E S T R I C T E D&nbsp;&nbsp; C A S H</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The Corporation has &#36;2 million of cash and cash equivalents at March 31, 2013 (Dec. 31, 2012 - &#36;2 million) that is not available for general use, all of which relates to Project Pioneer.</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">23</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



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<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 4 . I N V E N T O R Y</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory held in the normal course of business includes coal, emission credits, and natural gas, and is valued at the lower of cost and net realizable value. Inventory held for trading, which also includes natural gas and purchased emission credits, is valued at fair value less costs to sell.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=51%></TD>
     <TD width=34%></TD>
     <TD width=14%></TD></TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The classifications are as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Coal</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">72</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">78</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred stripping costs</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">18</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281403pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Natural gas</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Purchased emission credits</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
</TR>
<TR valign="bottom">
	<TD style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></TD>
	<TD style="border-bottom: 1 solid #000000">
<p align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">95</FONT></B></p>
    </TD>
	<TD style="border-bottom: 1 solid #000000">
<p align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">93</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">* See Note 2 for prior period restatements.</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">For the three months ended March 31, 2013, coal inventory at the Corporation&#146;s Centralia plant was written down by &#36;14 million (March 31, 2012 - &#36;34 million) to its net realizable value.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=20%></TD>
     <TD width=4%></TD>
     <TD width=8%></TD>
     <TD width=8%></TD>
     <TD width=8%></TD>
     <TD width=8%></TD>
     <TD width=9%></TD>
     <TD width=7%></TD>
     <TD width=5%></TD>
</TR>
<TR valign="bottom">
	<TD align=right colspan=4>
<p align="left"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>1 5 . P R O P E R T Y , &nbsp;&nbsp;P L A N T ,&nbsp;&nbsp;</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>A N D &nbsp;&nbsp;E Q U I P M E N T</B></FONT></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=9>
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">A reconciliation of the changes in the carrying amount of PP&amp;E is as follows:</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=5 style="TEXT-INDENT:27.960007pt">
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Land</FONT></B>&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Thermal</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">generation</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Gas</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">generation</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Renewable</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">generation</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Mining</FONT></B>&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">property</FONT></B>&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">and</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">equipment</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Assets under</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">construction</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Capital</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>spares</B></FONT>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">and other</FONT></B>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif"><SUP>(1)</SUP></FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">As at Dec. 31, 2012</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">75</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,874</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">996</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,004</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">517</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">342</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">236</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7,044</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additions</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">122</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">125</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Additions - finance lease </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 3)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(65)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(25)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(22)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(15)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(30</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(130</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revisions and additions to</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:4.350250pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">decommissioning and restoration&nbsp;
costs</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(6</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in foreign exchange rates</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Transfers</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">216</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(242)</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at March 31, 2013</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">76</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,825</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">972</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,200</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">532</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">222</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">251</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7,078</FONT></B></TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: left;">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Includes major spare parts and stand-by equipment available, but not in service, and spare parts used for routine, preventative or planned maintenance.</FONT></I></P>
<P align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">During the three months ended March 31, 2013, the Corporation capitalized &#36;2 million (March 31, 2012 - a nominal amount) of interest to PP&amp;E at a weighted average rate of 5.46 per
cent (March 31, 2012 - 5.38 per cent).</FONT></P>
<P align="left">
&nbsp;</P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">24</font></b></P>

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<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=38%></TD>
     <TD width=17%></TD>
     <TD width=3%></TD>
     <TD width=13%></TD>
     <TD width=3%></TD>
     <TD width=5%></TD>
     <TD width=5%></TD>
     <TD width=3%></TD>
     <TD width=6%></TD>
     <TD width=3%></TD></TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 6 . O T H E R&nbsp;&nbsp; A S S E T S</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The components of other assets are as follows:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD COLSPAN="3" STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD COLSPAN="3" STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281281pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred licence fees</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">21</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Project development costs</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">35</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">35</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280792pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Deferred service costs</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">19</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">19</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280792pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Long-term prepaids</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">19</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281052pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Keephills Unit 3 transmission deposit</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.28pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 5.27pt; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total other assets</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">103</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">90</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 7 . D E C O M M I S S I O N I N G&nbsp;&nbsp; A N D &nbsp;&nbsp;O T H E R&nbsp;
&nbsp;P R O V I S I O N S</FONT></B></TD>
	<TD ALIGN="RIGHT" STYLE="text-align: left">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=2>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The change in decommissioning and other provision balances is outlined below:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=10>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Decommissioning</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Restructuring</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font: xx-small Arial-BoldMT,Arial,Helvetica,sans-serif"><B>Other </B></FONT></TD>
 <TD COLSPAN="2" STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font: xx-small Arial-BoldMT,Arial,Helvetica,sans-serif"><B>Total</B></FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">and restoration</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Balance, Dec. 31, 2012</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">262</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">8</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">42</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">312</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Liabilities incurred in period</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279465pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Liabilities settled in</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279465pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">period</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279465pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accretion </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 8)</FONT></I></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280258pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revisions in estimated cash flows </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 15)</FONT></I></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279465pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revisions in discount rates</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280716pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Reversals</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(8)</FONT></TD>
	<TD align=left>
    </TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(8)</FONT></TD>
	<TD align=left>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" style="TEXT-INDENT:5.279617pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Change in foreign exchange rates</FONT></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">268</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">40</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">312</FONT></TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Less: current portion</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</FONT></B></TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 5.28pt; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31, 2013</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">254</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">33</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">287</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The restructuring provision relates to the Corporation&#146;s 2012 restructuring of resources as part of its ongoing strategy to continuously improve operational excellence and accelerate growth.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other provisions include an amount related to a portion of the Corporation&#146;s fixed price commitments under several natural gas transportation contracts for firm transportation that is not expected to be used. Accordingly, the unavoidable costs of meeting these obligations exceed the economic benefits expected to be received. The contracts extend to 2018.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other provisions also include provisions arising from ongoing business activities and include amounts related to commercial disputes between the Corporation and customers or suppliers. Information about the expected timing of settlement and uncertainties that could impact the amount or timing of settlement has not been provided as this may impact the Corporation&#146;s ability to settle the provisions in the most favourable manner.</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</font></b></P>
</DIV>

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<TR>
     <TD width=31% height="21"></TD>
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	<TD align=left height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 8 . L O N G - T E R M
&nbsp;&nbsp;D E B T</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=13 height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Debt and Letters of Credit</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=13 height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left height="19">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The amounts outstanding are as follows:</FONT></TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
	<TD align=left height="19">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" style="" height="20">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">As at</FONT></TD>
	<TD align=left style="border-bottom: 1px solid #000000" colspan="5" height="20">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B>&nbsp;</p>
    </TD>
	<TD align=left style="border-bottom: 1px solid #000000" height="20">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1px solid #000000" colspan="6" height="20">
<p align="center">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT>&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Carrying</FONT></B></TD>
	<TD align=left height="21">
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Face</FONT></B></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Carrying</FONT></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Face</FONT></TD>
	<TD align=left height="21">
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">value</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">value</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Interest</FONT></B><B><SUP><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">value</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">value</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Interest</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Credit facilities</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></SUP></TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">923</FONT></B></TD>
	<TD align=left height="21">
&nbsp;&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">923</FONT></B></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2.3%</FONT></B></TD>
	<TD align=left height="21">
<b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;</font></b></TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">950</FONT></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">950</FONT></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2.4%</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Debentures</FONT></TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">841</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">851</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">6.6%</FONT></B></TD>
	<TD align=left height="21">
    </TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">839</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">851</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6.6%</FONT></TD>
	<TD align=left height="21">
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Senior notes</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></SUP></TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,058</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,034</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5.6%</FONT></B></TD>
	<TD align=left height="21">
    </TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,017</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1,990</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5.6%</FONT></TD>
	<TD align=left height="21">
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Non-recourse</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></SUP></TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">375</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">380</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5.9%</FONT></B></TD>
	<TD align=left height="21">
    </TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">375</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">380</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5.9%</FONT></TD>
	<TD align=left height="21">
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Other</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">34</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">34</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">6.4%</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">36</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">36</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000" height="20">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">6.5%</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000" height="20">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4,231</FONT></B></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4,222</FONT></B></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,217</FONT></TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4,207</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="text-indent: 5.279999pt" height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Less: recourse current portion</FONT></TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(619)</FONT></B></TD>
	<TD align=left height="21">
    </TD>
	<TD align=right height="21">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(619)</FONT></B></TD>
	<TD align=left height="21">
    </TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(606)</FONT></TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=right height="21">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(606)</FONT></TD>
	<TD align=left height="21">
    </TD>
	<TD align=left height="21">
&nbsp;</TD>
	<TD align=left height="21">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;&nbsp;Less: non-recourse current portion</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="22">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
<font size="1" face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;</font></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="22">
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total long-term debt</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3,611</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3,602</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,610</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000" height="23">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3,600</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000" height="23">
&nbsp;&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Interest is an average rate weighted by principal amounts outstanding before the effect of hedging.</FONT></I></P>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(2) Composed of bankers' acceptances and other commercial borrowings under long-term committed credit facilities. Includes U.S.&#36;300 million at March 31, 2013 (Dec. 31, 2012 - U.S.&#36;300 million).</FONT></I></P>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(3) U.S. face value at March 31, 2013 - U.S.&#36;2.0 billion (Dec. 31, 2012 - U.S.&#36;2.0 billion).</FONT></I></P>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(4) Includes U.S.&#36;20 million at March 31, 2013 (Dec. 31, 2012 - U.S.&#36;20 million).</FONT></I></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TransAlta has a total of &#36;2.0 billion (Dec. 31, 2012 - &#36;2.0 billion) of committed credit facilities, of which &#36;0.8 billion (Dec. 31, 2012 - &#36;0.8 billion) is not drawn, and is available as of March 31, 2013, subject to customary borrowing conditions. The &#36;1.5 billion committed syndicated bank facility is a four-year revolving credit facility that matures in 2016. The U.S.&#36;300 million facility is a five-year facility that matures in the third quarter of 2013. The Corporation also has &#36;240 million in committed bilateral credit facilities, all of which matures in the fourth quarter of 2014. In addition to the &#36;0.8 billion available under the credit facilities, TransAlta also has &#36;48 million of available cash and cash equivalents.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Letters of credit are issued to counterparties under various contractual arrangements with the Corporation and certain subsidiaries of the Corporation. If the Corporation or its subsidiary does not perform under such contracts, the counterparty may present its claim for payment to the financial institution through which the letter of credit was issued. Any amounts owed by the Corporation or its subsidiaries under these contracts are reflected in the Consolidated Statements of Financial Position. All letters of credit expire within one year and are expected to be renewed, as needed, in the normal course of business. The total outstanding letters of credit as at March 31, 2013 were &#36;327 million (Dec. 31, 2012 - &#36;336 million) with no (Dec. 31, 2012 - nil) amounts exercised by third parties under these arrangements.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Restrictions</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Debt agreements of &#36;34 million related to the Windsor plant, owned by the Corporation&#146;s TA Cogen subsidiary, include principal and interest funding provisions that restrict the Corporation&#146;s ability to access funds generated by the operations of the plant. The Corporation has provided a letter of credit in the amount of the funding requirements, thereby permitting it to access the funds.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Debentures of &#36;339 million issued by the Corporation&#146;s Canadian Hydro Developers, Inc. subsidiary include restrictive covenants
</FONT><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">requiring the proceeds received from the sale of assets to be reinvested into similar renewables assets.
Accordingly, the Corporation is not able to use such proceeds for other purposes.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">26</font></b></P>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



<DIV STYLE="width: 1555; height: 1169; padding-left: 0%; padding-right: 0%">
<B><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">1 9 . D E F E R R E D &nbsp;&nbsp;C R E D I T S &nbsp;&nbsp;A N D &nbsp;&nbsp;O T H E R &nbsp;&nbsp;L O N G - T E R M &nbsp;&nbsp;L I A B I L I T I E S</font></B>
<p><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">The components of deferred credits and other long-term liabilities are as follows:</FONT></p>

<P STYLE="text-align: left"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"><B>As at</B></TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 9%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 22%; border-bottom: windowtext 1pt solid; font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><B>March 31, 2013</B></TD>
    <TD NOWRAP STYLE="width: 14%; border-bottom: windowtext 1pt solid; font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">Dec. 31, 2012</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">Deferred coal revenues</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><B>51</B></TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">51</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">Defined benefit obligations</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><B>227</B></TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">220</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">Long-term incentive accruals</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><B>7</B></TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">15</TD></TR>
<TR>
    <TD NOWRAP STYLE="font-style: normal; font-variant: normal; font-weight: normal; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; text-align: left; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">Other</TD>
    <TD NOWRAP STYLE="border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="font-style: normal; font-variant: normal; font-weight: bold; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt"><B>18</B></TD>
    <TD NOWRAP STYLE="font-style: normal; font-variant: normal; font-weight: normal; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; background-color: white; text-align: right; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">15</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="5" STYLE="font-style: normal; font-variant: normal; font-weight: bold; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; background-color: white; text-align: left; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt"><B>Total deferred credits and other long-term liabilities</B></TD>
    <TD NOWRAP STYLE="background-color: white; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="font-style: normal; font-variant: normal; font-weight: bold; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; text-align: right; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt"><B>303</B></TD>
    <TD NOWRAP STYLE="font-style: normal; font-variant: normal; font-weight: normal; line-height: 18pt; font-size: 8pt; font-family: Arial, Helvetica, Sans-Serif; background-color: white; text-align: right; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt">301</TD></TR>
</TABLE>


<P STYLE="text-align: left"><FONT STYLE="font: xx-small ArialMT,Arial,Helvetica,sans-serif">&nbsp;</FONT></P>

<b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">20. C O M M O
N&nbsp;&nbsp; S H A R E S</font></b>

<BR>
<p>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Issued and Outstanding</FONT></B></p>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TransAlta is authorized to issue an unlimited number of voting common shares without nominal or par value.</FONT></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">A reconciliation of changes in common shares is as follows:</FONT></P>
<DIV align="left">
<TABLE BORDER="0" CELLSPACING="0" STYLE="width: 100%">
<TR>
     <TD STYLE="width: 49%"></TD>
     <TD STYLE="width: 12%"></TD>
     <TD STYLE="width: 12%"></TD>
     <TD STYLE="width: 12%"></TD>
     <TD STYLE="width: 6%"></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=2 style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Common</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">shares</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(millions)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Amount</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Common</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">shares</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(millions)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amount</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Issued and outstanding, beginning of period</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">254.7</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,730</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">223.6</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,274</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Issued under the dividend reinvestment and
share purchase plan</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3.7</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">53</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.9</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Issued under the PSOP</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.1</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">258.4</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,783</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">224.6</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,295</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amounts receivable under Employee Share Purchase Plan</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(3)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Issued and outstanding, end of period</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">258.4</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2,780</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">224.6</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2,293</FONT></TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Dividends</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The following table summarizes the common share dividends declared or paid within the three months ended March, 31:</FONT></P>
<DIV align="left">
<TABLE BORDER="0" CELLSPACING="0" STYLE="width: 100%">
<TR>
     <TD STYLE="width: 18%; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Date</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">declared</FONT></B></p>
     </TD>
     <TD STYLE="width: 17%; text-align: right; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Payment</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">date</FONT></B></p>
     </TD>
     <TD STYLE="width: 16%; text-align: right; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividend per</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">share </FONT></B><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
     </TD>
     <TD STYLE="width: 14%; text-align: right; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">dividends</FONT></B></p>
     </TD>
     <TD STYLE="width: 15%; text-align: right; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividends</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">paid in</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">cash</FONT></B></p>
     </TD>
     <TD STYLE="width: 17%; text-align: right; border-bottom: #000000 1 solid">
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividends paid</FONT></B>&nbsp;</p>
      <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">in shares</FONT></B>&nbsp;</p>
     </TD></TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">2013</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 28, 2013</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Apr. 1, 2013</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.29</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">75</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">22</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">53</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=center>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Oct. 24, 2012</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 1, 2013</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.29</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">73</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">53</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">2012</FONT></I></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=center>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 25, 2012</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Apr. 1, 2012</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.29</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">65</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">23</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">43</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: center; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Oct. 27, 2011</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 1, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.29</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">65</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">45</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">20</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">There have been no other transactions involving common shares between the reporting date and the date of completion of these condensed consolidated financial statements.</FONT></P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">27</font></b></P>
</DIV>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



<DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<DIV align="left">
<TABLE border=0 cellspacing=0>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 1 . P R E F E R R E D &nbsp;&nbsp;S H A R E S</FONT></B>
<p>&nbsp;</p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Issued and Outstanding</FONT></B></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TransAlta is authorized to issue an unlimited number of first preferred shares, and the Board of Directors is authorized to determine the rights, privileges, restrictions and conditions attaching to such shares, subject to certain limitations.</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=37%></TD>
     <TD width=10%></TD>
     <TD width=9%></TD>
     <TD width=8%></TD>
     <TD width=10%></TD>
     <TD width=12%></TD>
     <TD width=12%></TD></TR>
<TR valign="bottom">
	<TD align=center>
<p align="left">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred shares outstanding are as follows:</FONT></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7 style="border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 5.27pt; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">As at</FONT></B></TD>
	<TD COLSPAN="2" STYLE="text-align: left; text-indent: 6.96pt; border-bottom: 1 solid #000000">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></p>
    </TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<p align="center">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012</FONT></p>
    </TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Cumulative Redeemable Rate Reset First</FONT></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Preferred Shares</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Number</B></FONT>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">of</FONT></B> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif"><B>shares</B></FONT>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(millions)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Amount </FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Number</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">of</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">shares </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(millions)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Amount</FONT></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividend</FONT></B>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">rate per</FONT></B>
<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>share </B></FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Redemption</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>price per</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif"><B>share
</B> </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Series A</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
	<TD align=right style="TEXT-INDENT:16.440002pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">293</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">293</FONT></TD>
	<TD align=left>
<p align="right">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1.15</FONT></TD>
	<TD align=left>
<p align="right">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25.00</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Series C</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD align=right style="TEXT-INDENT:16.440002pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">269</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">11</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">269</FONT></TD>
	<TD align=left>
<p align="right">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1.15</FONT></p>
    </TD>
	<TD align=left>
<p align="right">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25.00</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Series E</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right style="TEXT-INDENT:16.440002pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">219</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">219</FONT></TD>
	<TD align=left>
<p align="right">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1.25</FONT></p>
    </TD>
	<TD align=left>
<p align="right">
&nbsp;<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">25.00</FONT></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Issued and outstanding, end of period</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">32</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">781</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">32</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">781</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=7>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Dividends</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The following table summarizes the preferred share dividends declared or paid within the three months ended March 31:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=14%></TD>
     <TD width=14%></TD>
     <TD width=9%></TD>
     <TD width=11%></TD>
     <TD width=11%></TD>
     <TD width=12%></TD>
     <TD width=15%></TD>
     <TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Series A</FONT></B></p>
    </TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Series C</FONT></B></p>
    </TD>
	<TD COLSPAN="2" STYLE="text-align: right; border-bottom: 1 solid #000000">
<p align="center">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Series E</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Date</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">declared</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Payment</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">date</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividend</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">per</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">share </FONT></B><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">dividends</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividend</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">per</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">share </FONT></B><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">dividends</FONT></B></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Dividend per</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">share </FONT></B><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(&#36;)</FONT></I></p>
    </TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B></p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">dividends</FONT></B></p>
    </TD>
</TR>
<TR valign="bottom">
	<TD align=right>
<p align="left">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">2013</FONT></I></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 28, 2013</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.2875</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.2875</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.3125</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=right>
<p align="left">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">2012</FONT></I></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Jan. 25, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">March 31, 2012</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.2875</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">0.3844</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">4</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="text-align: left; line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1) Includes dividends of &#36;0.0969 per share (&#36;1 million in total) for the period from Nov. 29, 2011 to Dec. 31, 2011, which were accrued at Dec. 31, 2011.</FONT></I></P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">28</font></b></P>

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<p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>2 2 .&nbsp;&nbsp; A C C U M U L A T E D&nbsp;&nbsp; O T H E R&nbsp;&nbsp; C O M P R E H E N S I V E&nbsp;&nbsp;
I N C O M E</B></FONT>&nbsp; <B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">( L O S S )</FONT></B></p>
    </TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The components of, and changes in, AOCI are presented below:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Currency translation adjustment</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Opening balance</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(38)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(28)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280823pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gains (losses) on translating net assets of foreign operations</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">25</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(32)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 9.63pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gains (losses) on financial instruments designated as hedges of foreign
operations, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(21)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">21</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(34)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(39)</FONT></TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Cash flow hedges</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Opening balance</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(37)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(28)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280823pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">&nbsp;&nbsp;Gains (losses) on derivatives designated as cash flow hedges, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">10</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:9.630844pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Reclassification of losses on derivatives designated as cash flow hedges to</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">non-financial assets, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></SUP></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 9.63pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Reclassification of gains on derivatives designated as cash flow
hedges to net earnings, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(4)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(22)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(48)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(38)</FONT></TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Employee future benefits</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Opening balance</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(61)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(38)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.28pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net actuarial gains (losses) on defined benefit plans, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(5)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(9)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(54)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(47)</FONT></TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Equity investees</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Opening balance</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.28pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other comprehensive loss of equity
investees, net of tax</FONT><SUP><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></SUP></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Balance, March 31</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; text-indent: 5.27pt; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Accumulated other comprehensive loss</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(138)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(124)</FONT></TD>
</TR>
</TABLE>
</DIV>
<TABLE border=0 cellspacing=0 cellpadding="0">
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">*</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">See Note 2 for prior period restatements.</FONT></I>	</p>
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(1)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 3 for the three months ended March 31, 2013 (2012 - 3 expense).</FONT></I>	</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(2)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 2 for the three months ended March 31, 2013 (2012 - 1 expense).</FONT></I>	</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(3)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of nil for the three months ended March 31, 2013 (2012 - nil).</FONT></I>	</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(4)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of 3 for the three months ended March 31, 2013 (2012 - 17 expense).</FONT></I>	</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(5)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax expense of 2 for the three months ended March 31, 2013 (2012 - 3 recovery).</FONT></I>	</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(6)</FONT></I>&nbsp; &nbsp; &nbsp;</p>
 	</TD>
	<TD width="98%" height="1%">
<p style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">Net of income tax recovery of 1 for the three months ended March 31, 2013 (2012 - nil).</FONT></I>	</p>
	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 3 . C O N T I N G E N C I E S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TransAlta is occasionally named as a party in various claims and legal proceedings that arise during the normal course of its business. TransAlta reviews each of these claims, including the nature of the claim, the amount in dispute or claimed, and the availability of insurance coverage. There can be no assurance that any particular claim will be resolved in the Corporation&#146;s favour or that such claims may not have a material adverse effect on TransAlta</FONT><FONT color="#ff0000" size=1 face="ArialMT,Arial,Helvetica,sans-serif">. </FONT><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inquiries from regulatory bodies may also arise in the normal course of business, to which the Corporation responds as required.</FONT></P>
<P style="text-align: left;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 4 . C O M M I T M E N T S</FONT></B></P>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">During March 2013, the New Richmond wind farm commenced operations and as such, the 15 year long-term service agreement for repairs and maintenance became effective. The future payments over the term of the agreement are approximately &#36;35 million.</FONT></P>
<P style="text-align: left;">
&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">29</font></b></P>
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<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 5 . S E G M E N T &nbsp;&nbsp;D I S C L O S U R E S</FONT></B></TD>
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&nbsp;
<p>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">A. Reported Segment Earnings (Loss)</FONT></B></p>
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<TABLE border=0 cellspacing=0 width="100%">
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     <TD width=41%></TD>
     <TD width=19%></TD>
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	<TD align=left colspan=3>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Each business segment assumes responsibility for its operating results to operating income.</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
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	<TD colspan=5>
&nbsp;</TD>
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	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2013</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Generation</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Energy</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Trading</B></FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Corporate</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">523</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">540</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fuel and purchased power</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">201</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">201</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid; text-indent: 5.27pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Gross margin</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">322</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">17</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">339</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Operations, maintenance, and administration</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">92</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">16</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">115</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">122</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">5</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">127</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory writedown</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Taxes, other than income taxes</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">7</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Intersegment cost allocation</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">4</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Operating income (loss)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">83</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">14</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(21)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">76</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Finance lease income</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Equity loss</FONT></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(4)</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Foreign exchange loss</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Loss on assumption of pension obligations</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(29)</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net interest expense</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(62)</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Loss before income taxes</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(9)</FONT></B></TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3 months ended March 31, 2012 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Generation</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Energy</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Trading</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Corporate</FONT>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Total</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280716pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Revenues</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">627</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">17</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">644</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Fuel and purchased power</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">175</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">175</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gross margin</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">452</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">17</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">469</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Operations, maintenance, and administration</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">99</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">22</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">128</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">124</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">5</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">129</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory writedown</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">34</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">34</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Taxes, other than income taxes</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">7</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Intersegment cost allocation</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(3)</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Operating income (loss)</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">185</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">13</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(27</FONT></TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">171</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Finance lease income</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Gain on sale of assets</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">-</FONT></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">3</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Foreign exchange loss</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Net interest expense</FONT></TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;&nbsp;</TD>
	<TD align=right style="border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(60)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Earnings before income taxes</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">110</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">* See Note 2 for prior period restatements.</FONT></I>
<p>&nbsp;</p>
    </TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px"><FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Included in the Generation Segment results for the three months ended March 31, 2013 are &#36;7 million (March 31, 2012 - &#36;7 million) of incentives received under a Government of Canada program in respect of power generation from qualifying wind and hydro projects.</FONT></P>
<P style="MARGIN:0px">&nbsp;</P>
<P style="MARGIN:0px">&nbsp;</P>
<P style="MARGIN:0px">&nbsp;</P>
</DIV>

<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">30</font></b></P>

<HR noshade align="center" width="100%" size=2><DIV STYLE="page-break-before: always">&nbsp;</div>



<!--$$/page=--><DIV STYLE="WIDTH: 100%; PADDING-RIGHT: 0%; PADDING-LEFT: 0%">
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=36%></TD>
     <TD width=27%></TD>
     <TD width=12%></TD>
     <TD width=15%></TD>
     <TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left colspan=3>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">B. Selected Condensed Consolidated Statements of Financial Position Information</FONT></B></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=5>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total segment assets</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Generation</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Energy</B></FONT> <FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">
<B>Trading</B></FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Corporate</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
&nbsp;<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Total</FONT></B>&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279892pt">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">March 31, 2013</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">8,889</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">216</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">252</FONT></B></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">9,357</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Dec. 31, 2012 </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Restated)*</FONT></I></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">8,994</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">262</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">206</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">9,462</FONT></TD>
</TR>
</TABLE>
</DIV>
<TABLE border=0 cellspacing=0>
<TR>
	<TD nowrap valign=top align=right width="2%">
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">*</FONT></I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%" colspan=2>
<I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">See Note 2 for prior period restatements.</FONT></I>
<p>&nbsp;</p>
	</TD>
</TR>
<TR>
	<TD nowrap valign=top width="2%">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">C.</FONT></B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width="98%" colspan=2>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Depreciation and Amortization on the Condensed Consolidated Statements of Cash Flows</FONT></B>	</TD>
</TR>
</TABLE>
<P style="text-align: left;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">The reconciliation between depreciation and amortization reported on the Condensed Consolidated Statements of Earnings and the Condensed Consolidated Statements of Cash Flows is presented below:</FONT></P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=62%></TD>
     <TD width=29%></TD>
     <TD width=8%></TD></TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=2 style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended
March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization expense on the Condensed</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Consolidated Statement of Earnings</FONT></TD>
	<TD align=right valign="middle">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">127</FONT></B></TD>
	<TD align=right valign="middle">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">129</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation included in fuel and purchased power </FONT><I><FONT size=1 face="Arial-ItalicMT,Arial,Helvetica,sans-serif">(Note 6)</FONT></I></TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">11</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">10</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1px solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Other</FONT></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1px solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">1</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1px solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">1</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Depreciation and amortization expense on the Condensed</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Consolidated Statements of Cash Flows</FONT></TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">139</FONT></B>&nbsp;</TD>
	<TD STYLE="text-align: right; vertical-align: middle; border-bottom: 1 solid #000000">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">140</FONT>&nbsp;</TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="MARGIN:0px">&nbsp;</P>
<P style="MARGIN:0px">&nbsp;</P>
<DIV align="left">
<TABLE border=0 cellspacing=0 width="100%">
<TR>
     <TD width=58%></TD>
     <TD width=12%></TD>
     <TD width=14%></TD>
     <TD width=8%></TD>
</TR>
<TR valign="bottom">
	<TD ALIGN="LEFT" COLSPAN="2"><b><font size="1" face="Arial-BoldMT,Arial,Helvetica,sans-serif">2 6 . C H A N G E S&nbsp;&nbsp; I N &nbsp;&nbsp;N O N - C A S H &nbsp;&nbsp;O P E R A T I N G &nbsp;&nbsp;W O R K I N G
     &nbsp;&nbsp;C A P I T A L</font></b></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD align=left style="border-bottom: 1 solid #000000">
&nbsp;</TD>
	<TD align=right colspan=2 style="border-bottom: 1 solid #000000">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">3 months ended March 31</FONT></B></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">2013</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">2012</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281097pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Source (use) of cash:</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.279999pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts receivable</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">142</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">104</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.281357pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Prepaid expenses</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(22)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(15)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280884pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income taxes</FONT>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">receivable</FONT></TD>
	<TD align=left>
&nbsp;&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(3)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(14)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280884pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Inventory</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(1)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(2)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280655pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Accounts payable and accrued liabilities</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(37)</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(90)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD align=left style="TEXT-INDENT:5.280884pt">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Decommissioning and other provisions</FONT></TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">-</FONT></B></TD>
	<TD align=right>
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">12</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">Income taxes payable</FONT></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">(2)</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(1)</FONT></TD>
</TR>
<TR valign="bottom">
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">Change in non-cash operating working capital</FONT></B></TD>
	<TD STYLE="text-align: left; border-bottom: Black 1pt solid">
&nbsp;</TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">77</FONT></B></TD>
	<TD STYLE="text-align: right; border-bottom: Black 1pt solid">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">(6)</FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="MARGIN:0px">&nbsp;</P>
<P style="text-align: right;">
<FONT size=1 face="ArialMT,Arial,Helvetica,sans-serif">TRANSALTA CORPORATION / Q1 2013 </FONT><B><FONT size=1 face="Arial-BoldMT,Arial,Helvetica,sans-serif">31</FONT></B></P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.2
<SEQUENCE>3
<FILENAME>mda13-2.htm
<DESCRIPTION>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE REGISTRANT AS AT AND FOR THE PERIOD ENDED MARCH 31, 2013.
<TEXT>
<HTML>
<HEAD>
     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 33%">&nbsp;<IMG SRC="image_001.jpg" ALT=""></TD>
    <TD STYLE="width: 34%"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="width: 33%; text-align: right"><FONT STYLE="font: 9pt Arial, Helvetica, Sans-Serif; text-transform: uppercase"><B>TransAlta
    Corporation<p>first quarter
    report for 2013</B></FONT></TD></TR>
</TABLE>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>management&#8217;s
discussion and analysis</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">This Management&#8217;s Discussion and Analysis
(&#8220;MD&amp;A&#8221;) 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<BR>
Forward-Looking Statements section of this MD&amp;A for additional information.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">This MD&amp;A
should be read in conjunction with unaudited interim condensed consolidated financial statements of TransAlta Corporation as at
and for the three months ended March 31, 2013 and 2012, and should also be read in conjunction with the audited consolidated financial
statements and MD&amp;A contained within our 2012 Annual Report. In this MD&amp;A, unless the context otherwise requires, &#8216;we&#8217;,
&#8216;our&#8217;, &#8216;us&#8217;, the &#8216;Corporation&#8217; and &#8216;TransAlta&#8217; refers to TransAlta Corporation
and its subsidiaries. The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (&#8220;IFRS&#8221;). All tabular amounts in the following discussion are in millions of Canadian dollars unless otherwise
noted. This MD&amp;A is dated April 22, 2013. </FONT>Additional information respecting TransAlta, including its Annual Information
Form, is available on SEDAR at <FONT STYLE="color: blue"><U>www.sedar.com</U></FONT>.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>rESULTS
OF OPERATIONS</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The results of operations are presented
on a consolidated basis and by business segment. We have three business segments: Generation, Energy Trading, and Corporate. In
this MD&amp;A, the impact of foreign exchange fluctuations on foreign currency denominated transactions and balances is discussed
with the relevant Condensed Consolidated Statements of Earnings (Loss) and Condensed Consolidated Statements of Financial Position
items. While individual line items in the Condensed Consolidated Statements of Financial Position may be impacted by foreign exchange
fluctuations, the net impact of the translation of these items relating to foreign operations to our presentation currency is reflected
in Accumulated Other Comprehensive Income (Loss) (&#8220;AOCI&#8221;) in the equity section of the Condensed Consolidated Statements
of Financial Position.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>highlights</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Generation Results</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">&bull;</font></p>
</TD><TD STYLE="text-align: justify">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">Comparable
gross
                                                                                                                                margins,
                                                                                                                                which
                                                                                                                                doesn&#8217;t
                                                                                                                                include
                                                                                                                                finance
                                                                                                                                lease
                                                                                                                                income,
                                                                                                                                decreased
                                                                                                                                $4
                                                                                                                                million
                                                                                                                                to
                                                                                                                                $363
                                                                                                                                million
                                                                                                                                quarter
                                                                                                                                over
                                                                                                                                quarter,
                                                                                                                                primarily
 due
                                                                                                                                to
                                                                                                                                lower
                                                                                                                                contract
                                                                                                                                pricing
                                                                                                                                at
                                                                                                                                Centralia
                                                                                                                                Thermal
                                                                                                                                and
                                                                                                                                higher
                                                                                                                                Alberta
                                                                                                                                coal
                                                                                                                                Power
                                                                                                                                Purchase
                                                                                                                                Arrangement
                                                                                                                                (&#8220;PPA&#8221;)
                                                                                                                                penalties
                                                                                                                                due
                                                                                                                                to
                                                                                                                                higher
                                                                                                                                prices
                                                                                                                                in
                                                                                                                                Alberta
                                                                                                                                during
                                                                                                                                outages,
                                                                                                                                offset
                                                                                                                                by
                                                                                                                                lower
                                                                                                                                planned
                                                                                                                                outages
                                                                                                                                at
                                                                                                                                the
                                                                                                                                Alberta
                                                                                                                                coal
                                                                                                                                PPA
                                                                                                                                facilities,
                                                                                                                                lower
                                                                                                                                market
                                                                                                                                curtailments,
                                                                                                                                and
                                                                                                                                higher
                                                                                                                                hydro
                                                                                                                                margins.</font></p>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></TD><TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">&bull;</font></p>
</TD><TD STYLE="text-align: justify">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">Total
                                                                                                                                finance
                                                                                                                                lease
                                                                                                                                income
                                                                                                                                increased
                                                                                                                                $9
                                                                                                                                million
                                                                                                                                in
                                                                                                                                the
                                                                                                                                quarter
                                                                                                                                due
                                                                                                                                to
                                                                                                                                the
                                                                                                                                new
                                                                                                                                Solomon
                                                                                                                                finance
                                                                                                                                lease.</font></p>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></TD><TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">&bull;</font></p>
</TD><TD STYLE="text-align: justify">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">Overall
                                                                                                                                fleet
                                                                                                                                availability
                                                                                                                                was
                                                                                                                                91.5
                                                                                                                                per
                                                                                                                                cent
                                                                                                                                compared
                                                                                                                                to
                                                                                                                                91.7
                                                                                                                                per
                                                                                                                                cent
                                                                                                                                in
                                                                                                                                2012.</font></p>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></TD><TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">&bull;</font></p>
</TD><TD STYLE="text-align: justify">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">Production
                                                                                                                                              increased
                                                                                                                                              1,203
 gigawatt
                                                                                                                                              hours
                                                                                                                                              (&#8220;GWh&#8221;)
 to
                                                                                                                                              10,644
                                                                                                                                              GWh
                                                                                                                                              compared
                                                                                                                                              to
                                                                                                                                              2012.</font></p>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></TD><TD STYLE="width: 0.25in">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">&bull;</font></p>
</TD><TD STYLE="text-align: justify">
 <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font size="2">Through
                                                                                                                                              continued
                                                                                                                                              efforts
                                                                                                                                              to
                                                                                                                                              lower
                                                                                                                                              costs
                                                                                                                                              and
                                                                                                                                              focus
                                                                                                                                              on
                                                                                                                                              productivity,
 Operations,
                                                                                                                                              Maintenance,
                                                                                                                                              and
                                                                                                                                              Administration
                                                                                                                                              (&#8220;OM&amp;A&#8221;)
 costs
                                                                                                                                              have
                                                                                                                                              been
                                                                                                                                              reduced
                                                                                                                                              by
                                                                                                                                              $7
                                                                                                                                              million
                                                                                                                                              to
                                                                                                                                              $92
                                                                                                                                              million.</font></p>
</TD></TR></TABLE>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;1</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Energy Trading Results</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify"><font size="2">Energy Trading gross margins
were consistent with the prior year at $17 million.</font></TD></TR></TABLE>

<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font size="2">Financial Highlights</font></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><font size="2">&bull;</font></TD><TD STYLE="text-align: left"><font size="2">Funds from Operations (&#8220;FFO&#8221;) increased
$3 million to $192 million compared to the prior year.</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify"><font size="2">Comparable Earnings Before
Interest, Taxes, Depreciation, and Amortization (&#8220;EBITDA&#8221;) increased $15 million in the
quarter to $267 million compared to 2012.</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify"><font size="2">Comparable earnings were $32 million ($0.12
per share), down from $44 million ($0.20 per share) in 2012. The decrease in comparable earnings is primarily due to lower earnings
in the Generation Segment driven by a higher comparable inventory writedown and lower tax recoveries, partially offset by OM&amp;A
savings.</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><font size="2">&bull;</font></TD><TD STYLE="text-align: justify"><font size="2">Reported net losses attributable to common
shareholders were $11 million ($0.04 net loss per share), down from net earnings attributable to common shareholders of $88 million
($0.39 net earnings per share) in 2012. The change is driven by the following non-comparable amounts, net of tax:</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><font size="2">&bull;</font></TD><TD STYLE="text-align: justify"><font size="2">Impact of de-designated hedges $82 million</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><font size="2">&bull;</font></TD><TD STYLE="text-align: justify"><font size="2">Loss on assumption of pension obligations
of $22 million</font></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt/150% Times New Roman, Times, Serif"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><font size="2">&bull;</font></TD><TD STYLE="text-align: justify"><font size="2">During the quarter, our New Richmond wind
farm was commissioned.</font></TD></TR></TABLE>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The following table depicts key financial
results and statistical operating data:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 27%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 46%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Availability (%)<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>91.5</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">91.7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production (GWh)<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10,644</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9,441</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Revenues</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>540</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">644</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gross margin<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>339</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">469</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable gross margin<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>380</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">374</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operating income<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">171</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable operating income<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>128</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">122</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings (loss) attributable to common shareholders</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(11)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">88</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings (loss) per share attributable to common</FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">shareholders, basic and diluted</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(0.04)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.39</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable net earnings per share<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.12</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable EBITDA<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>267</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">252</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Funds from operations<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>192</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">189</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Funds from operations per share<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.74</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.84</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash flow from operating activities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>256</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">183</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Free cash flow<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividends paid per common share</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold; text-indent: 16.05pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.29</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 16pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.29</FONT></TD></TR>
</TABLE>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(<FONT STYLE="font: 6.5pt Arial, Helvetica, Sans-Serif"><B>1</B></FONT>)
Availability and production includes all generating assets (generation operations, finance leases, and equity investments).</P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(2) These
items are Additional IFRS Measures. Refer to the Additional IFRS Measures section of this MD&amp;A for further discussion of these
items.</P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="margin: 0"><FONT STYLE="font-size: 7pt">(3) These comparable items are not defined under IFRS. Presenting these items
from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison
with prior periods&rsquo; results. Refer to the Non-IFRS Measures section of this MD&amp;A for further discussion of these items,
including, where applicable, reconciliations to measures calculated in accordance with IFRS</FONT></P>



<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>


<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;2</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 58%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>As at</B></FONT></TD>
    <TD STYLE="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31, 2013</B></FONT></TD>
    <TD STYLE="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dec. 31, 2012</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>9,357</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9,462</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total long-term liabilities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4,749</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,729</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>AVAILABILITY
&amp; PRODUCTION</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Availability for the three months ended
March 31, 2013 was 91.5 per cent compared to 91.7 per cent in the first quarter of 2012.</P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Production for the three months ended March
31, 2013 increased 1,203 GWh compared to the same period in 2012 due to lower economic dispatching at Centralia Thermal, lower
planned outages at the Alberta coal PPA facilities, and lower market curtailments, partially offset by higher unplanned outages
at the Alberta coal PPA facilities and lower PPA customer demand.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>NET
EARNINGs attributable to common shareholders</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in net earnings attributable to common shareholders for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 70%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 30%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings attributable to common shareholders, 2012</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">88</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in Generation comparable gross margins</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(4)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Mark-to-market movements and de-designations - Generation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(126)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in operations, maintenance, and administration costs</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">13</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in depreciation and amortization expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in gain on sale of assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in inventory writedown</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in finance lease income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in equity income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(4)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in loss on assumption of pension obligations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(29)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in net interest expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in income tax expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">19</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in preferred share dividends</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Net loss attributable to common shareholders, 2013</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(11)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Generation comparable gross margins for
the three months ended March 31, 2013, excluding the impact of mark-to-market movements, decreased by $4 million compared to the
same period in 2012, as there was lower contract pricing at Centralia Thermal and higher Alberta coal PPA penalties due to higher
prices in Alberta during outages were largely offset by lower planned outages at the Alberta coal PPA facilities, lower market
curtailments, and higher hydro margins.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Mark-to-market movements decreased for the
three months ended March 31, 2013 compared to the same period in 2012 due to the recognition of higher mark-to-market gains in
2012 resulting from certain power hedging relationships being deemed ineffective and released from AOCI to net earnings.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">OM&amp;A costs
for the three months ended March 31, 2013 decreased compared to the same period in 2012 primarily due to lower compensation costs
as a result of</FONT> organizational restructuring in the fourth quarter<FONT STYLE="color: black"> of 2012 and a continued focus
on costs.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Depreciation and amortization expense for
the three months ended March 31, 2013 decreased compared to 2012 primarily due to a lower depreciable asset base caused by asset
impairments and the change in the economic useful lives of Alberta coal-fired plants resulting from amendments to Canadian federal
regulations in 2012, partially offset by an increased asset base through acquiring new assets.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The decrease in the gain on sale of assets
in the three months ended March 31, 2013 compared to 2012 is due to the release of a contingent provision on the sale of our Grande
Prairie facility in 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">C<FONT STYLE="color: black">oal inventory
has been written down to its net realizable value at our Centralia plant.&nbsp; The writedown in March 2013 is lower compared to
the same period in 2012 due to an increase in prices in the Pacific Northwest and a decrease in inventory costs.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">Finance lease
income for the three months ended March 31, 2013 increased compared to the same period in 2012 due to </FONT>the acquisition of
the Solomon Power station. We began receiving lease payments in the fourth quarter of 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Equity income for the three months ended
March 31, 2013 decreased compared to 2012 primarily due to unfavourable pricing and higher planned outages at CE Generation, LLC
(&#8220;CE Gen&#8221;).</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the quarter, we assumed certain pension
obligations upon the assumption of operating and management control of the Highvale Mine.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Net interest expense for the three months
ended March 31, 2013 increased compared to the same period in 2012 due to higher debt levels.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Income tax expense for the three months
ended March 31, 2013 decreased compared to the same period in 2012 due to lower<BR>
pre-tax earnings and an income tax recovery related to an adjustment in the deferred tax rate.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The preferred share dividends for the three
months ended March 31, 2013 increased compared to the same period in 2012 due to a higher balance of preferred shares outstanding
during 2013.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">Funds
from operations AND FREE CASH FLOW</P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">FFO
for the three months ended March 31, 2013 increased $3 million compared to the same period in 2012 to $192 million after adjusting
net earnings for the non-cash impacts from risk management activities.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Free cash flow for the three months ended
March 31, 2013 increased $66 million compared to the same period in 2012 due to lower cash dividends paid as a result of increased
participation in the Premium Dividend<SUP>TM</SUP>, Dividend Reinvestment and Optional Common Share Purchase Plan (the &#8220;Plan&#8221;)
and lower sustaining capital expenditures, partially offset by lower net earnings.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">significant
Events</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Keephills Unit 1</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; background-color: white">On March 26, 2013,
we announced that an outage occurred on March 5, 2013 at Unit 1 of our Keephills facility due to a winding failure found in the
generator. In response to the event, we gave notice of a High Impact Low Probability event and claimed force majeure relief under
the PPA. In the event of a force majeure, we are entitled to continue to receive our PPA capacity payment and are protected under
the terms of the PPA from having to pay availability penalties. As a result, we do not expect the outage to have a material financial
impact on the Corporation. We are working with the original equipment manufacturer of the generator to safely return the Unit to
service, which is currently expected to be in early May of 2013. During the quarter, the PPA Buyer informed us that they will be
taking the matter to arbitration.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Centralia Thermal</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On July 25, 2012, we announced that we entered
into an 11-year agreement to provide electricity from the Centralia Thermal plant to Puget Sound Energy (&#8220;PSE&#8221;).&nbsp;
The agreement was approved, with conditions, by the Washington Utilities and Transportation Commission (&#8220;WUTC&#8221;) on
Jan. 9, 2013. On Jan. 23, 2013, it was announced that PSE had filed a petition for reconsideration of certain conditions within
the decision issued by the WUTC. On March 22, 2013, the administrative law judge managing the regulatory hearing process issued
two Commission Orders to establish an amended timeline for addressing the petition for reconsideration. The deadline for filing
answers to the reconsideration motion is May 30, 2013 and the timeline for a decision on the reconsideration motion is no later
than June 28, 2013.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>New Richmond</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On March 13, 2013, our 68 megawatt (&#8220;MW&#8221;)
New Richmond wind farm began commercial operations. The total cost of the project is still forecasted to be approximately $212
million.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>SunHills Mining Limited Partnership</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Effective Jan. 17, 2013, we assumed, through
our wholly owned SunHills Mining Limited Partnership (&#8220;SunHills&#8221;), operations and management control of the Highvale
Mine from Prairie Mines and Royalty Ltd. (&#8220;PMRL&#8221;). PMRL employees working at the Highvale Mine were offered employment
by SunHills which agreed to assume responsibility for certain pension plan and pension funding obligations, which we had previously
funded through the payments made under the PMRL mining contracts. As a result, a pre-tax loss of $29 million was recognized, along
with the corresponding liabilities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We also entered into a related finance lease
for certain mining equipment that was used by PMRL in mining operations. As a result,<BR>
$21 million in mining equipment has been capitalized to property, plant and equipment and the related finance lease obligation
recognized. At the end of the lease term, we are eligible to purchase the assets subject to lease, for a nominal amount.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Change in Estimates - Useful Lives</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the three months ended March 31,
2013, management completed a comprehensive review of the estimated useful lives of our hydro assets, having regard for, among other
things, our economic life cycle maintenance program and the existing condition of the assets. As a result, depreciation was reduced
by $1 million for the three months ended March 31, 2013. Pre-tax depreciation expense is expected to be reduced by $5 million for
the year ended Dec. 31, 2013 and by $5 million annually thereafter.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Centralia Coal Inventory Writedown </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the quarter, we recognized a pre-tax
writedown of $14 million related to the coal inventory at our Centralia plant to write the inventory down to its net realizable
value.<STRIKE> </STRIKE></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">BUSINESS
environment</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>We operate in a variety of business environments
to generate electricity, find buyers for the power we generate, and arrange for its transmission. The major markets we operate
in are Western Canada, the Western United States (&#8220;U.S.&#8221;), and Eastern Canada. For a further description of the regions
in which we operate as well as the impact of prices of electricity and natural gas upon our financial results, refer to our 2012
Annual MD&amp;A.</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Contracted Cash Flows</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the first quarter of 2013, approximately
90 per cent of our consolidated power portfolio was contracted through the use of PPAs and other long-term contracts. We also entered
into short-term physical and financial contracts for the remaining volumes, which are primarily for periods of up to five years.
The average price of these contracts for the balance of 2013 are approximately $60 per megawatt hour (&#8220;MWh&#8221;) in Alberta
and approximately U.S.$40 per MWh in the Pacific Northwest.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Electricity Prices</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Please refer to the Business Environment
section of our 2012 Annual MD&amp;A for a full discussion of the spot electricity market and the impact of electricity prices on
our business, as well as our strategy to hedge our risks associated with changes in these prices.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The average spot electricity prices for
the three months ended March 31, 2013 and 2012 in our three major markets is shown in the following graph.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><IMG SRC="image_006.jpg" ALT=""></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">For the three months ended March 31, 2013,
average spot prices in Alberta increased compared to the same period in 2012 primarily due to overall higher planned and unplanned
outages leading to tighter supply and demand conditions. In the Pacific Northwest, average spot prices increased due to higher
natural gas prices and lower hydro generation. The average spot prices in Ontario increased compared to 2012 due to higher natural
gas prices and stronger weather-driven loads.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">In 2013, power
</FONT>prices in Alberta are expected to be lower than 2012 due to fewer planned turnarounds and increased capacity due to additional
generation facilities coming online, partially offset by load growth. In the Pacific Northwest, we expect prices to be modestly
stronger than in 2012; however, we expect that overall prices will still remain<FONT STYLE="color: black"> weak due to anticipated
low natural gas prices and slow load growth.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Spark Spreads&#9;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Please refer to the Business Environment
section of our 2012 Annual MD&amp;A for a full discussion of spark spreads and the impact of spark spreads on our business.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The average spark spreads for the three
months ended March 31, 2013 and 2012 in our three major markets is shown in the following graph.</P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><IMG SRC="image_007.jpg" ALT=""></P>

<P STYLE="font: 11pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 6.5pt"><I>(1)</I></FONT><I><FONT STYLE="font-size: 7pt">
For a 7,000 British Thermal Units per Kilowatt hour heat rate plant.</FONT></I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">For the three months ended March 31, 2013,
average spark spreads decreased in Alberta compared to the same period in 2012 due to natural gas prices rising faster than power
prices. In the Pacific Northwest average spark spreads were consistent with 2012 as power prices and natural gas prices increased
at relatively similar rates. For the three months ended March 31, 2013, average spark spreads increased in Ontario compared to
the same period in 2012 as a result of power prices increasing more than natural gas prices.</P>

<P STYLE="font: 6.5pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>GENERATION:</B></FONT><I>
TransAlta owns and operates hydro, wind, natural gas-fired and coal-fired facilities, and related mining operations in Canada,
the U.S., and Australia. Generation revenues and overall profitability are derived from the availability and production of electricity
and steam as well as ancillary services such as system support. For a full listing of all of our generating assets and the regions
in which they operate, refer to the Plant Summary section of our 2012 Annual MD&amp;A. </I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Generation Operations:</I></B><I>
During the first quarter of 2013, we began commercial operations at New Richmond, a 68 MW wind farm in Quebec. At March 31, 2013,
our generating assets had 8,268 MW of gross generating capacity<SUP>(</SUP><A HREF="#note_ftn2" NAME="notea_ftnref2" STYLE="font-size: 65%; vertical-align: 35%"><SUP>2</SUP></A><SUP>)</SUP>
in operation (7,926 MW net ownership interest) and 560 MW under restoration in the Sundance Units 1 and 2 major project. The following
information excludes assets that are accounted for as a finance lease or using the equity method, which are discussed separately
within this discussion of the Generation Segment.</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The results of Generation Operations are
as follows:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold" valign="bottom" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>adjustments</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>total<SUP>(2)</SUP></B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Per installed </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>MWh</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable</FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">total<SUP>(2)</SUP></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Per installed </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">MWh</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Revenues</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 27%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>523</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>564</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>31.59</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">542</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">30.36</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Fuel and purchased power</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>201</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>201</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>11.26</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">175</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9.80</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Gross margin</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>322</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>363</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>20.33</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">367</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">20.55</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operations, maintenance, and administration</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>92</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>92</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>5.15</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">99</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">5.55</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>122</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>122</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6.83</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">124</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6.95</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Inventory writedown</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.78</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Taxes, other than income taxes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.39</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.39</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Intersegment cost allocation</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.22</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">3</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.17</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Operating income</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>83</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>124</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6.96</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">134</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7.49</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Installed capacity (GWh)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>17,856</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>17,856</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17,851</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production (GWh)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10,112</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10,112</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8,913</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Availability (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>91.6</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>91.6</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">91.6</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(<FONT STYLE="font: 6.5pt Arial, Helvetica, Sans-Serif"><B>1</B></FONT>)
We measure capacity as net maximum capacity (see glossary for definition of this and other key terms), which is consistent with
industry standards. Capacity figures represent capacity owned and in operation unless otherwise stated.</P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="margin: 0"><FONT STYLE="font: 7pt Arial, Helvetica, Sans-Serif">(2) Comparable figures are not defined under IFRS. Refer
to the Non-IFRS Measures section of this MD&amp;A for further discussion of these items, including, where applicable, reconciliations
to net earnings attributable to common shareholders and cash flow from operating activities.</FONT></P>



<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>


<!-- Field: Page; Sequence: 9 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;9</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Generation Operations Production and
Comparable Gross Margins</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Production volumes, comparable revenues,
fuel and purchased power expenses, and comparable gross margins based on geographical regions and fuel types are presented below.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse" width="100%">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 11%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold" valign="bottom" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31, 2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 10%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Production (GWh)</B></FONT></p>
    </TD>
    <TD STYLE="width: 8%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Installed (GWh)</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable revenues</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable fuel &amp; purchased power</B></FONT></p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>gross margin</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable revenues per </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>installed MWh</B></FONT></p>
    </TD>
    <TD STYLE="width: 10%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Fuel &amp; purchased power per installed MWh</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>gross margin per </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>installed MWh</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Coal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>5,275</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6,926</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>228</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>94</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>134</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>32.92</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>13.57</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>19.35</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>668</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>769</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>30</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>23</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>39.01</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>9.10</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>29.91</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Renewables</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>739</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2,889</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>56</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>53</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>19.38</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1.04</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>18.34</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total Western Canada</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6,682</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10,584</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>314</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>104</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>210</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>29.67</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>9.83</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>19.84</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,001</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,619</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>105</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>51</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>54</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>64.85</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>31.50</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>33.35</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Renewables</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>425</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,573</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>42</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>40</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>26.70</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1.27</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>25.43</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total Eastern Canada</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,426</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3,192</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>147</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>53</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>94</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>46.05</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>16.60</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>29.45</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Coal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,678</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2,896</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>71</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>31</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>40</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>24.52</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10.70</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>13.82</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>326</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,184</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>32</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>13</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>19</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>27.03</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10.98</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>16.05</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total International</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2,004</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4,080</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>103</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>44</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>59</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>25.25</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10.78</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14.47</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10,112</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>17,856</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>564</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>201</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>363</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>31.59</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>11.26</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>20.33</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt" valign="bottom" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">3 months ended March 31, 2012</FONT></p>
    </TD>
    <TD STYLE="width: 10%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production (GWh)</FONT></p>
    </TD>
    <TD STYLE="width: 10%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Installed (GWh)</FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable revenues</FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Fuel &amp; purchased power</FONT></p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable gross margin</FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable revenues per </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">installed MWh</FONT></p>
    </TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Fuel &amp; purchased power per installed MWh</FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="bottom" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">gross margin per </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">installed MWh</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Coal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">5,263</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6,944</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">210</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">81</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">129</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">30.24</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">11.66</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">18.58</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">704</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">778</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">31</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">25</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">39.85</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7.71</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">32.14</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Renewables</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">751</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,921</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">48</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">3</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">45</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">16.43</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1.03</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">15.40</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total Western Canada</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6,718</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">10,643</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">289</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">90</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">199</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">27.15</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8.46</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">18.69</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,003</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,638</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">99</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">43</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">56</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">60.44</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">26.25</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34.19</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Renewables</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">460</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,444</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">45</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">43</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">31.16</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1.39</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">29.77</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total Eastern Canada</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,463</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">3,082</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">144</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">45</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">99</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">46.72</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">14.60</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">32.12</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Coal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">404</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,929</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">82</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">32</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">50</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">28.00</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">10.93</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17.07</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">328</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,197</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">27</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">19</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">22.56</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6.68</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">15.88</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Total International</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">732</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4,126</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">109</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">40</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">69</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">26.42</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9.69</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">16.73</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8,913</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17,851</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">542</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">175</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">367</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">30.36</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9.80</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">20.55</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 10 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;10</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>Western Canada</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our Western Canada assets consist of coal,
natural gas, hydro, and wind facilities. Refer to the Discussion of Segmented Results section<I> </I>of our 2012 Annual MD&amp;A
for further details on our Western Canadian operations.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in production for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(GWh)</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6,718</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher unplanned outages at the Alberta coal PPA facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(356)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower PPA customer demand</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(108)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower production at natural gas-fired facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(36)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower wind volumes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(8)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower hydro volumes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(4)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower planned outages at the Alberta coal PPA facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">283</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Market curtailments</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">111</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower unplanned outages at Genesee Unit 3</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">75</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Production, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6,682</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in comparable gross margin<SUP> </SUP>for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 4%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable gross margin, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">199</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower planned outages at the Alberta coal PPA facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">16</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Market curtailments</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher hydro margins</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower unplanned outages at Genesee Unit 3</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Pricing, primarily related to hedging and penalties paid under </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Alberta coal PPAs</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(11)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher unplanned outages at the Alberta coal PPA facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(5)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Unfavourable coal pricing</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable gross margin, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>210</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 11 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;11</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>Eastern Canada</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our Eastern Canada assets consist of natural
gas, hydro, and wind facilities. Refer to the Discussion of Segmented Results section of our 2012 Annual MD&amp;A for further details
on our Eastern Canadian operations.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in production for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 78%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(GWh)</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,463</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower wind volumes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(31)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Unfavourable market conditions at natural gas-fired facilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(4)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Production, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1,426</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in gross margin for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gross margin, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">99</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Unfavourable contracted gas input costs</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower wind volumes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Gross margin, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>94</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>International</I></P>

<P STYLE="font: 8pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our International assets consist of coal,
natural gas, and hydro facilities in various locations in the United States, and natural gas and diesel assets in Australia. Refer
to the Discussion of Segmented Results section of our 2012 Annual MD&amp;A for further details on our International operations.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in production for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(GWh)</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">732</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower economic dispatching at Centralia Thermal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,301</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher planned and unplanned outages at Centralia Thermal</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(25)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(4)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Production, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2,004</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;12</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in comparable gross margin<SUP> </SUP>for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable gross margin, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">69</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Lower contract pricing, including margins on purchased power</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(35)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Coal pricing<SUP>(1)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">23</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable gross margin, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>59</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the quarter, we recognized a pre-tax
writedown of $14 million related to the coal inventory at our Centralia plant to write the inventory down to its net realizable
value.<STRIKE> </STRIKE></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Operations, Maintenance, and Administration
Expense </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">OM&amp;A expenses for the three months ended
March 31, 2013 decreased compared to the same period in 2012, primarily due to lower compensation costs as a result of restructuring
in the fourth quarter of 2012 and a continued focus on costs.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>Depreciation and Amortization Expense</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The primary factors contributing to the
change in depreciation and amortization expense for the three months ended March 31, 2013 are presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 77%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Depreciation and amortization expense, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">124</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in asset base</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impact of asset impairments</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(8)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Change in economic life<SUP>(2)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(5)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Change in useful lives of hydro assets</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">5</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Depreciation and amortization expense, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>122</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 11pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; color: white"><B>
</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Finance Leases</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Solomon</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On Sept. 28, 2012, we completed the acquisition
from Fortescue Metals Group Ltd. (&#8220;Fortescue&#8221;) of its 125 MW natural gas-fired and diesel-fired Solomon power station
in Western Australia for U.S.$318 million. The facility and associated Power Purchase Agreement (&#8220;Agreement&#8221;) are accounted
for as a finance lease and we began receiving payments under the Agreement in the fourth quarter of 2012. The facility is currently
under construction and is expected to be commissioned during the second quarter of 2013.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(1) Coal
price includes the impact of the inventory writedown which is not included in gross margin.</P>

<P STYLE="font: italic 6.5pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="margin: 0"><FONT STYLE="font-size: 7pt">(2) As a result of amendments to Canadian federal regulations requiring that
coal-fired plants be shut down after a maximum of 50 years of operation. The previous draft regulations proposed shut down after
45 years. The useful lives of these assets were changed in the third quarter of 2012.</FONT></P>



<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Fort Saskatchewan</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Fort Saskatchewan is a natural gas-fired
facility with a gross generating capacity of 118 MW in operation, of which TransAlta Cogeneration, L.P. has a 60 per cent ownership
interest (35 MW net ownership interest). Key operational information adjusted to reflect our interest in the Fort Saskatchewan
facility, which we continue to operate, is summarized below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 19%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 49%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Availability (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>104.5</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">102.6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production (GWh)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>138</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">137</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Availability for the three months ended
March 31, 2013 increased compared to the same period in 2012, due to lower unplanned outages.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Production for the three months ended March
31, 2013 is consistent with the same period in 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Total Finance Lease Income</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Total finance lease income for the three
months ended March 31, 2013 increased $9 million compared to the same period in 2012 due to the payments we began receiving in
October 2012 under the Agreement with Fortescue.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B><I>Equity Investments</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our interests in the CE Gen and Wailuku
River Hydroelectric, L.P. joint ventures are accounted for using the equity method and are comprised of geothermal, natural gas,
and hydro facilities in various locations throughout the U.S., with 839 MW of gross generating capacity (390 MW net ownership interest).
The table below summarizes key operational information adjusted to reflect our interest in these investments:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 19%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 47%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Availability (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>86.9</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">92.9</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Production (GWh)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gas</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>140</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">91</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Renewables</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>254</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">300</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total production</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>394</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">391</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Availability for the three months ended
March 31, 2013 decreased compared to the same period in 2012 due to higher planned outages, partially offset by lower unplanned
outages.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Production for the three months ended March
31, 2013 increased compared to the same period in 2012 due to lower unplanned outages and higher customer demand, partially offset
by higher planned outages.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Equity loss for the three months ended March
31, 2013 was $4 million compared to equity income of nil for the same period in 2012. The decrease is primarily due to unfavourable
pricing and higher planned outages.</P>


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    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Since 2001, a significant portion of the
CE Gen plants have been operating under modified fixed energy price contracts.&nbsp; Commencing May 1, 2012, the terms of the contracts
reverted to a pricing clause that permits the power purchaser to pay their short-run avoided costs (&#8220;SRAC&#8221;) as the
price for power.&nbsp; The SRAC is linked to the price of natural gas.&nbsp; There can be no assurances that prices based on the
avoided cost of energy after May 1, 2012 will result in revenues equivalent to those realized under the fixed energy price structure.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>ENERGY
TRADING:</B></FONT> <I>Derives revenue and earnings from the wholesale trading of electricity and other energy-related commodities
and derivatives. Achieving gross margins, while remaining within Value at Risk (&#8220;VaR&#8221;) limits, is a key measure of
Energy Trading&#8217;s activities. Refer to the Value at Risk and Trading Positions discussion in the Risk Management section of
our 2012 Annual MD&amp;A for further discussion on VaR.</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>Energy Trading utilizes contracts of
various durations for the forward purchase and sale of electricity and for the purchase and sale of natural gas and transmission
capacity. If the activities are performed on behalf of the Generation Segment, the results of these activities are included in
the Generation Segment.</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>For a more in-depth discussion of our
Energy Trading activities, refer to the Discussion of Segmented Results section of our 2012 Annual MD&amp;A. </I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The results of the Energy Trading Segment,
with all trading results presented on a net basis, are as follows:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 66%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Revenues</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>17</B></FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Fuel and purchased power</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Gross margin</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>17</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">17</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operations, maintenance, and administration</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Intersegment cost allocation</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(4)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Operating income</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">13</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">For the three months ended March 31, 2013,
Energy Trading gross margins and OM&amp;A expenses are consistent compared to the same period in 2012.</P>


<!-- Field: Page; Sequence: 15 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;15</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>CORPORATE:</B></FONT>
<FONT STYLE="color: black"><I>Our Generation and Energy Trading Segments are supported by a Corporate group that provides finance,
tax, treasury, legal, regulatory, environmental, health and safety, sustainable development, corporate communications, government
and investor relations, information technology, risk management, human resources, internal audit, and other administrative support.</I></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The expenses incurred by the Corporate Segment
are as follows:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 56%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 19%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operations, maintenance, and administration</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>16</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">22</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Depreciation and amortization</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>5</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">5</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Operating loss</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>21</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">27</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">OM&amp;A expenses for the three months ended
March 31, 2013 decreased compared to the same period in 2012, primarily due to lower compensation costs as a result of restructuring
in the fourth quarter of 2012 and a continued focus on costs.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>NET
INTEREST EXPENSE </B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The components of net interest expense are
shown below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 43%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 16%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 28%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Interest on debt</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>60</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">56</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Capitalized interest</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(2)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Interest expense</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>58</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">56</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Accretion of provisions</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Net interest expense</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>62</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">60</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The change in net interest expense for the
three months ended March 31, 2013,<FONT STYLE="color: black"><B> </B></FONT>compared to the same period in 2012, is shown below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 36%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net interest expense, 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 13%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 13%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 27%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">60</FONT></p>
    </TD>
    <TD STYLE="width: 1%; font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher capitalized interest</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></p>
    </TD>
    <TD STYLE="font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Unfavourable foreign exchange impacts</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1</FONT></p>
    </TD>
    <TD STYLE="font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher financing costs</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1</FONT></p>
    </TD>
    <TD STYLE="font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Higher debt levels</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD>
    <TD STYLE="font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Net interest expense, 2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>62</B></FONT></p>
    </TD>
    <TD STYLE="font: 12pt/18pt Times New Roman, Times, Serif; text-align: justify">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>INCOME
TAXES</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">A reconciliation of income taxes and effective
tax rates on earnings, excluding non-comparable items, is presented below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 67%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 1%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Earnings (loss) before income taxes</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(9)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">110</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income attributable to non-controlling interests</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(10)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(13)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Equity loss</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts associated with certain de-designated and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">ineffective hedges</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(85)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Inventory writedown</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gain on sale of assets</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Loss on assumption of pension obligations</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>29</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Earnings attributable to TransAlta shareholders,</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>excluding non-comparable items, subject to tax</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>55</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">43</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax expense (recovery)</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(17)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery (expense) related to impacts associated </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">with certain de-designated and ineffective hedges</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(30)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to inventory </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">writedown</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">12</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax expense related to gain on sale of assets</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to deferred tax rate adjustment</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>6</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to the resolution of certain </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">outstanding tax matters</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">9</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to loss on assumption of </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">pension obligations</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Income tax expense (recovery) excluding </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>non-comparable items</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>10</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(8)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Effective tax rate on earnings (loss) attributable to </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>TransAlta shareholders excluding non-comparable </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>items (%)</B></FONT></TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>18</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(19)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The income tax expense excluding non-comparable
items for the three months ended March 31, 2013 increased compared to the same period in 2012 due to higher taxable comparable
earnings and the positive resolution of certain comparable tax contingency matters in the prior period.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The effective tax rate on earnings attributable
to TransAlta shareholders excluding non-comparable items for the three months ended March 31, 2013 increased compared to the same
period in 2012 due to changes in the amount of earnings between the jurisdictions in which pre-tax income is earned, the effect
of certain deductions that do not fluctuate with earnings, and due to the positive resolution of certain comparable tax contingency
matters in the prior period.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>NON-CONTROLLING
INTERESTS</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Net earnings attributable to non-controlling
interests for the three months ended March 31, 2013 was comparable to the same period in 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 17 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;17</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>financial
position</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The following chart highlights significant
changes in the Condensed Consolidated Statements of Financial Position from<BR>
Dec. 31, 2012 to March 31, 2013:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 41%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Increase/</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(Decrease)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Primary factors explaining change</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash and cash equivalents</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">23</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Timing of receipts and payments</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Accounts receivable</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(140)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Timing of customer receipts and overall lower revenues</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Prepaid expenses</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">18</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Prepayment of annual insurance premiums</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Property, plant, and equipment, net</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Additions partially offset by depreciation</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Deferred income tax assets</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">25</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Tax benefits of losses related to the profitability of U.S. operations</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Risk management assets (current and long-term)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(84)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Price movements and changes in underlying positions and settlements</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Other assets</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">13</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Increase in long-term prepaids</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Accounts payable and accrued liabilities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(45)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Timing of payments and lower capital accruals</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Long-term debt (including current portion)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">14</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Unfavourable foreign exchange, partially offset by repayments and decreased borrowings under credit facilities</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Finance lease obligation (including current portion)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">21</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Finance lease for certain equipment used in mining operations at the Highvale Mine</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Risk management liabilities (current and long-term)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(51)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Price movements and changes in underlying positions and settlements</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Equity attributable to shareholders</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(34)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net loss for the period and share dividends, partially offset by issuance of common shares</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>financial
instruments</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Refer to <I>Note 13</I> of the notes to
the audited consolidated financial statements within our 2012 Annual Report and <I>Note 11 </I>of our interim condensed consolidated
financial statements as at and for the three months ended March 31, 2013 for details on Financial Instruments. Refer to the Risk
Management section of our 2012 Annual Report and <I>Note 12</I> of our interim condensed consolidated financial statements for
further details on our risks and how we manage them. Our risk management profile and practices have not changed materially from
Dec. 31, 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Energy Trading may enter into commodity
transactions involving non-standard features for which market observable data is not available. These are defined under IFRS as
Level III financial instruments. Level III financial instruments are not traded in an active market and fair value is, therefore,
developed using valuation models based upon internally developed assumptions or inputs. Our<BR>
Level III fair values are determined using data such as unit availability, transmission congestion, or demand profiles. Fair values
are validated on a quarterly basis by using reasonably possible alternative assumptions as inputs to valuation techniques, and
any material differences are disclosed in the notes to the financial statements.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We also have various contracts with terms
that extend beyond five years.&nbsp; As forward price forecasts are not available for the full period of these contracts, the value
of these contracts must be derived by reference to a forecast that is based on a combination of external and internal fundamental
modeling, including discounting.&nbsp; As a result, these contracts are classified in Level III. These contracts are for specified
prices with counterparties that we believe to be creditworthy.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">At March 31, 2013, total Level III financial
instruments had a net asset carrying value of $17 million (Dec. 31, 2012 - $31 million net asset).</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Certain of our hedging relationships had
previously been de-designated and deemed ineffective for accounting purposes.&nbsp; The hedges were in respect of power production
and the associated gains remain in AOCI until the underlying production occurs or until such time that the production has been
assessed as highly probable not to occur.&nbsp; No gains related to these previously<BR>
de-designated hedges were reclassified to earnings during the three months ended March 31, 2013 (March 31, 2012 - $75 million pre-tax
gain).&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">As at March 31, 2013, cumulative gains of
$7 million related to cash flow hedges that were de-designated and no longer meet the criteria for hedge accounting continued to
be deferred in AOCI and will be reclassified to net earnings as the forecasted transactions occur or if the forecasted transactions
are assessed as highly probable not to occur.&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>STATEMENTS
OF CASH FLOWS</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The following charts highlight significant
changes in the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 compared to the same period
in 2012:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 36%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 44%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Primary factors explaining change</B></FONT></p>
    </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash and cash equivalents, beginning </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">of period</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>27</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">49</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Provided by (used in):</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operating activities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>256</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">183</FONT></p>
    </TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Favourable changes in working capital of $83 million partially offset by lower cash earnings of $10 million</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Investing activities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(150)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(164)</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in additions to PP&amp;E and intangibles of $11 million and a net positive cash impact of $8 million related to changes in collateral received from or paid to counterparties, partially offset by an unfavourable change in non-cash investing working capital balances of $7 million and lower proceeds on sale of assets of $3 million</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Financing activities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(84)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(37)</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Decrease in borrowings under credit facilities of $73 million partially offset by a decrease in common share cash dividends of $25 million due to dividends reinvested through the dividend reinvestment plan</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Translation of foreign currency cash</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash and cash equivalents, end of period</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>50</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">31</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>Liquidity
and Capital Resources</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Liquidity risk arises from our ability to
meet general funding needs, engage in trading and hedging activities, and manage the assets, liabilities, and capital structure
of the Corporation. Liquidity risk is managed by maintaining sufficient liquid financial resources to fund obligations as they
come due in the most cost-effective manner.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our liquidity needs are met through a variety
of sources, including cash generated from operations, borrowings under our long-term credit facilities, and long-term debt or equity
issued under our Canadian and U.S. shelf registrations. Our primary uses of funds are operational expenses, capital expenditures,
dividends, distributions to non-controlling limited partners, and interest and principal payments on debt securities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Debt</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Long-term debt totalled $4.2 billion as
at March 31, 2013 compared to $4.2 billion as at Dec. 31, 2012.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Credit Facilities </I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">At March 31, 2013, we had a total of $2.0<FONT STYLE="color: black">
</FONT>billion (Dec. 31, 2012 - $2.0 billion) of committed credit facilities, of which $0.8<FONT STYLE="color: black"> </FONT>billion
(Dec. 31, 2012 - $0.8 billion) is not drawn and is available, subject to customary borrowing conditions. At March 31, 2013, the
$1.2 billion (Dec. 31, 2012 - $1.3 billion) of credit utilized under these facilities was comprised of actual drawings of $0.9
billion (Dec. 31, 2012 - $1.0 billion) and letters of credit of $0.3 billion (Dec. 31, 2012 - $0.3 billion). These facilities are comprised
of a $1.5 billion committed syndicated bank facility that matures in 2016, with the remainder comprised of bilateral credit facilities,
of which $0.3 billion matures in the third quarter of 2013 and $0.2 billion matures in the fourth quarter of 2014. We anticipate
renewing these facilities, based on reasonable commercial terms, prior to their maturities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In addition to the $0.8 billion available
under the credit facilities, we also have $48 million of available cash.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Share Capital</I></B></P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On April 22, 2013, we had 262.1 million
common shares outstanding, 12.0 million Series A, 11.0 million Series C, and 9.0 million
Series E first preferred shares outstanding.&nbsp; At March 31, 2013, we had 258.4 million (Dec. 31, 2012 - 254.7 million) common
shares issued and outstanding. At March 31, 2013, we also had 32.0 million (Dec. 31, 2012 - 32.0 million) preferred shares issued
and outstanding.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We issue common shares for cash proceeds,
on exercise of stock options and other share-based payment plans, or for reinvestment of dividends.&nbsp; During February 2012,
we added a Premium Dividend<SUP>TM</SUP> component to the Plan. Please refer to <I>Note 28 </I>of our audited consolidated financial
statements within our 2012 Annual Report for additional information regarding the amendments.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During the three months ended March 31,
2013, 3.7 million (March 31, 2012 - 0.9 million) common shares were issued for $53 million (March 31, 2012 - $20 million), which were comprised of dividends reinvested under the terms of the Plan.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Guarantee Contracts </I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We have obligations to issue letters of
credit and cash collateral to secure potential liabilities to certain parties, including those related to potential environmental
obligations, energy trading activities, hedging activities, and purchase obligations. At
March 31, 2013, we provided letters of credit totalling $327 million (Dec. 31, 2012 - $336 million) and cash collateral of $17
million (Dec. 31, 2012 - $19 million). These letters of credit and cash collateral secure certain amounts included on our Condensed Consolidated
Statements of Financial Position under risk management liabilities and decommissioning and other provisions.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Commitments</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">During March 2013, the New Richmond wind
farm commenced operations and as such, the 15 year long-term service agreement for repairs and maintenance became effective.&nbsp;
The future payments over the term of the agreement are approximately $35 million.&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>climate
change and the environment</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In Alberta, there are requirements for coal-fired
generation units to implement additional air emission controls for oxides of nitrogen (&#8220;NOx&#8221;), sulphur dioxide (&#8220;<FONT STYLE="color: black">SO<SUB>2</SUB>&#8221;)</FONT>,
and particulate matter, once they reach the end of their respective PPAs, in most cases at 2020.&nbsp; These regulatory requirements
were developed by the province in 2004 as a result of multi-stakeholder discussions under Alberta&#8217;s Clean Air Strategic Alliance
(&#8220;CASA&#8221;).&nbsp; However, the release of the federal Greenhouse Gas (&#8220;GHG&#8221;) regulations may create a potential
misalignment between the CASA air pollutant requirements and schedules, and the GHG retirement schedules for older coal plants,
which in themselves will result in significant reductions of NOx, SO<SUB>2</SUB>, and particulates. &nbsp;We are in discussions
with the provincial government to ensure coordination between GHG and air pollutant regulations, such that emission reduction objectives
are achieved in the most effective manner while taking into consideration the reliability and cost of Alberta&#8217;s generation
supply.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On March 27, 2012, the U.S. Environmental
Protection Agency (&#8220;EPA&#8221;) proposed GHG emission standards for future coal-fired power plants. Compliance under the
proposed standard will likely be met with fuel switching or clean coal technologies. As this regulatory framework is for new coal-fired
plants, we expect no material impact on our existing coal units at Centralia.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">In December 2011,
the EPA issued national standards for mercury emissions from power plants. Existing sources will have up to four years to comply.
We have already voluntarily </FONT>installed mercury capture technology at our Centralia coal-fired plant, and began full capture
operations in early 2012. We have also installed additional technology to further reduce NOx, consistent with the Washington State
Bill passed in April 2011.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">We continue to
make operational improvements and investments to our existing generating facilities to reduce the environmental impact of generating
electricity. We installed mercury control equipment at our Alberta Thermal operations in 2010 in order to meet the province&#8217;s
70 per cent reduction objectives, and voluntarily at our Centralia coal-fired plant in 2012. Our Keephills Unit 3 plant began operations
in September 2011 using supercritical combustion technology to maximize thermal efficiency, as well as SO<SUB>2</SUB></FONT> <FONT STYLE="color: black">capture
and low NOx combustion technology, which is consistent with the technology that is currently in use at Genesee Unit 3. Uprate projects
completed at our Keephills and Sundance plants are expected to improve the energy and emissions efficiency of those units.</FONT></P>

<P STYLE="font: 7.5pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>2013
Outlook</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Business Environment</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Power Prices</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">Over the balance
of 2013, power </FONT>prices in Alberta are expected to be lower than in 2012 due to fewer planned turnarounds and increased capacity
due to additional generation facilities coming online, partially offset by load growth. In the Pacific Northwest, we expect prices
to be modestly stronger than in 2012; however, we expect that overall prices will still remain<FONT STYLE="color: black"> weak
due to low natural gas prices and slow load growth.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Environmental Legislation</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The finalization of the federal Canadian
GHG regulations for coal-fired power has initiated further activities. We are in discussions with the provincial government to
ensure coordination between GHG and air pollutant regulations, such that emission reduction objectives are achieved in the most
effective manner while taking into consideration the reliability and cost of Alberta&#8217;s generation supply. This may provide
additional flexibility to coal-fired generators in meeting the regulatory requirements. For further information on the Canadian
GHG regulations, please refer to the Significant Events section of our 2012 Annual MD&amp;A.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In addition, there are ongoing discussions
between the federal and provincial governments regarding a national Air Quality Management System for air pollutants. In Alberta&#8217;s
recently released Clean Air Strategy, the province indicated that its provincial air quality management system will operationalize
any national system. Our current outlook is that, for Alberta, provincial regulations will be considered as equivalent to any future
national framework.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On Jan. 21, 2013, the Ontario government
released a discussion paper for public input on reducing GHG emissions in the province, with the stated intent of developing GHG
regulations for all major industrial sectors by 2015. No specific targets or regulatory approaches have yet been proposed.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In the U.S., it is not yet clear how climate
change legislation for existing fossil-fuel-based generation will unfold. Additionally, new air pollutant regulations for the power
sector are anticipated, but are not expected to directly affect our coal-fired operations in Washington State. TransAlta&#8217;s
agreement with Washington State, established in April 2011, provides regulatory clarity at the state level regarding an emissions
regime related to the Centralia Coal plant until 2025.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Beginning in 2013, direct deliveries of
power to the California Independent System Operator will be subject to a compliance obligation established by the California Air
Resources Board&#8217;s (&#8220;CARB&#8221;) cap and trade program.&nbsp; As CARB continues to finalize their regulations, we will
stay at the forefront of regulatory changes to enable us to remain in compliance with the cap and trade program.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In Australia, the carbon tax implemented
in July 2012 remains in place and is due to increase from AUS$23.00 to AUS$24.15 per tonne in July 2013. While TransAlta&#8217;s
gas-fired operations are subject to the tax, all related costs are flowed to contracted customers.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We continue to closely monitor the progress
and risks associated with environmental legislation changes on our future operations.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The siting, construction, and operation
of electrical energy&nbsp;facilities requires interaction with many stakeholders. Recently, certain stakeholders have brought actions
against government agencies and owners over alleged adverse impacts of&nbsp;wind projects. We are monitoring these claims in order
to assess the risk associated with these activities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Economic Environment </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In 2013, we expect slow to moderate growth
in Alberta and Australia, and low growth in other markets. We continue to monitor global events and their potential impact on the
economy and our supplier and commodity counterparty relationships.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We had no material counterparty losses in
the first quarter of 2013. We continue to monitor counterparty credit risk and have established risk management policies to mitigate
counterparty risk. We do not anticipate any material change to our existing credit practices and continue to deal primarily with
investment grade counterparties.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Operations</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Capacity, Production, and Availability
</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Generating capacity is expected to increase
for the remainder of 2013 due to Sundance Units 1 and 2 returning to service. Prior to the effect of any economic dispatching,
overall production is expected to increase in 2013 due to lower planned outages, Sundance Units 1 and 2 returning to service, and
the completion of the New Richmond wind farm. Overall availability is expected to be in the range of 89 to 90 per cent in 2013
due to lower planned outages across the fleet.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Contracted Cash Flows</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Through the use of Alberta PPAs, long-term
contracts, and other short-term physical and financial contracts, on average, approximately 75 per cent of our capacity is contracted
over the next seven years. On an aggregated portfolio basis, depending on market conditions, we target being up to 90 per cent
contracted for the upcoming calendar year. As at the end of the first quarter of 2013, approximately 89 per cent of our 2013 capacity
was contracted. The average prices of our short-term physical and financial contracts for the balance of 2013 are approximately
$60 per MWh in Alberta and approximately U.S.$40 per MWh in the Pacific Northwest.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Fuel Costs </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Mining coal in Alberta is subject to cost
increases due to greater overburden removal, inflation, capital investments, and commodity prices. Seasonal variations in coal
costs at our Alberta mine are minimized through the application of standard costing. In January 2013, we assumed, through SunHills,
operating and management control of the Highvale Mine from PMRL. Coal costs for 2013, on a standard cost basis, are expected to
be comparable to 2012 with the assumption of operational and management control offsetting any cost increases mentioned above.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Although we own the Centralia mine in the
State of Washington, it is not currently operational. Fuel at Centralia Thermal is purchased from external suppliers in the Powder
River Basin and delivered by rail. The delivered cost of fuel per MWh for 2013 is expected to decrease between six to eight per
cent.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The value of coal inventories is assessed
for impairment at the end of each reporting period. If the inventory is impaired, further charges will be recognized in net earnings.
For more information on the inventory impairment charges recorded in 2013, please refer to the Significant Events section of this
MD&amp;A.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We purchase natural gas from outside companies
coincident with production or have it supplied by our customers, thereby minimizing our risk to changes in prices. The continued
success of unconventional gas production in North America could reduce the year-to-year volatility of prices in the near term.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We closely monitor the risks associated
with changes in electricity and input fuel prices on our future operations and, where we consider it appropriate, use various physical
and financial instruments to hedge our assets and operations from such price risks.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Operations, Maintenance, and Administration
Costs </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">OM&amp;A costs</FONT>
for 2013 are expected to be consistent with 2012 OM&amp;A, with cost savings as a result of organizational restructuring in the
fourth quarter offset by additional costs as Sundance Units 1 and 2 are returned to service and the commencement of operations
at our New Richmond wind farm.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Energy Trading </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">Earnings from</FONT>
our Energy Trading Segment are affected by prices in the market, overall strategies adopted, and changes in legislation. We continuously
monitor both the market and our exposure in order to maximize earnings while still maintaining an acceptable risk profile.&nbsp;
Our target is for Energy Trading to contribute between $40 million and $60 million in gross margin for 2013.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Exposure to Fluctuations in Foreign Currencies
</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">Our strategy</FONT>
is to minimize the impact of fluctuations in the Canadian dollar against the U.S. dollar, Euro, and Australian dollar by offsetting
foreign denominated assets with foreign denominated liabilities and by entering into foreign exchange contracts. We also have foreign
denominated expenses, including interest charges, which largely offset our net foreign denominated revenues.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Net Interest Expense </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Net interest expense for 2013 is not expected
to change materially compared to 2012. However, changes in interest rates and in the value of the Canadian dollar relative to the
U.S. dollar can affect the amount of net interest expense incurred.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Liquidity and Capital Resources </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">If there is increased volatility in power
and natural gas markets, or if market trading activities increase, we may need additional liquidity in the future. We expect to
maintain adequate available liquidity under our committed credit facilities.</P>

<P STYLE="font: 11pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Accounting Estimates</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">A number of our accounting estimates, including
those outlined in the Critical Accounting Policies and Estimates section of our 2012 Annual MD&amp;A, are based on the current
economic environment and outlook. As a result of the current economic environment, market fluctuations could impact, among other
things, future commodity prices, foreign exchange rates, and interest rates, which could, in turn, impact future earnings and the
unrealized gains or losses associated with our risk management assets and liabilities and asset valuation for our asset impairment
calculations.&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>Income Taxes</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The effective tax rate on earnings excluding
non-comparable items for 2013 is expected to be approximately 10 to 15 per cent, which is lower than the statutory tax rate of
25 per cent, due to changes in the amount of earnings between the jurisdictions in which pre-tax income is earned and the effect
of certain deductions that do not fluctuate with earnings.</P>


<!-- Field: Page; Sequence: 24 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;24</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Capital Expenditures</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our major projects are focused on sustaining
our current operations and supporting our growth strategy.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>Growth and Major Project Expenditures</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">We have</FONT>
one major project with a targeted completion date of Q4 2013. A summary is outlined below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total Project</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="text-align: right; line-height: 18pt; font-weight: bold; border-bottom: 1 solid #000000; padding-left: 5.4pt; padding-right: 5.4pt" rowspan="2">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Target</B></FONT></p>
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>completion</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>date</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 15%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Estimated spend</B></FONT></p>
    </TD>
    <TD STYLE="width: 8%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Spent
     to date<SUP>(1)</SUP></B></FONT></p>
    </TD>
    <TD STYLE="width: 2%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 9%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Estimated spend</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Spent to date<SUP>(1)</SUP></B></FONT></p>
    </TD>
    <TD STYLE="width: 3%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 28%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Details</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Growth</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">New Richmond</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">212</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">216</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">15 - 25</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">28</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="center"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Commercial </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">operations </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">began </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q1 2013</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">A 68 MW wind farm in Quebec</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Major projects</B></FONT></p>
    </TD>
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     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
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     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
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     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
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     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Sundance Units 1 </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">and 2</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">190</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">92</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">130 - 145</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt" valign="top" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">48</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0" align="center"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q4 2013</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt" valign="top" align="left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Sundance Units 1 and 2 comprising 560 MW of our Sundance power plant</FONT></p>
    </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total major projects and growth</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>402</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>308</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>145 - 170</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="vertical-align: bottom; border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
</TABLE>
<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The total estimated spend for New Richmond
is less than the amount incurred to date due to estimated recoveries to be received in 2013.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><I>Transmission</I></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">For the three
months ended March 31, 2013, a total of $2 million was spent on transmission projects.&nbsp; The estimated spend for 2013</FONT>
on transmission projects is $7 million.&nbsp; Transmission projects consist of the major maintenance and reconfiguration of Alberta&#8217;s
transmission networks to increase capacity of power flow in the lines.&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B>Sustaining Capital and Productivity Expenditures<FONT STYLE="color: white"><SUP>(1)</SUP></FONT></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">For 2013, our estimate for total sustaining
capital and productivity expenditures, net of any contributions received, is allocated among the following:<FONT STYLE="color: red">
</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Category</B></FONT></p>
    </TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Description</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Expected </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>cost</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 12pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Spent to</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>date</B></FONT><B><FONT STYLE="font-size: 9pt"><SUP>(1)</SUP></FONT></B></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 30%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Routine capital</FONT></p>
    </TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Expenditures to maintain our existing generating capacity</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">90 - 100</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">15</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Mining equipment and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">land purchases</FONT></p>
    </TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Expenditures related to mining equipment and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">land purchases</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">40 - 50</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">8</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Planned major maintenance</FONT></p>
    </TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Regularly scheduled major maintenance</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">165 - 185</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">28</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total sustaining expenditures</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>295 - 335</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>51</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Productivity capital</FONT></p>
    </TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Projects to improve power production efficiency</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">30 - 50</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Total sustaining and productivity expenditures</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>325 - 385</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>55</B></FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 11pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">As a result of assuming the operating and
management control of the Highvale Mine, sustaining capital and productivity expenditures for 2013 may be adjusted throughout the
year as additional costs are incurred.&nbsp; We are currently assessing the impact that this will have on our 2013 sustaining capital
and productivity expenditures. During the quarter, we acquired $21 million of mining equipment under a finance lease.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Our planned major maintenance program relates
to regularly scheduled major maintenance activities and includes costs related to inspection, repair and maintenance, and replacement
of existing components. It excludes amounts for day-to-day routine maintenance, unplanned maintenance activities, and minor inspections
and overhauls, which are expensed as incurred. Details of the 2013 planned major maintenance program are outlined as follows:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 31%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 15%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Coal</B></FONT></p>
    </TD>
    <TD STYLE="width: 12%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Gas and Renewables</B></FONT></p>
    </TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Expected </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>spend </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>in 2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 12pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Spent </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>to date</B></FONT><B><FONT STYLE="font-size: 9pt"><SUP>(1)</SUP></FONT></B></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Capitalized</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">90 - 105</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">75 - 80</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">165 - 185</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">28</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Expensed</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0 - 5</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0 - 5</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">90 - 105</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">75 - 85</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">165 - 190</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">28</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Coal</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Gas and Renewables</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Expected</B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>total</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Lost </B></FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>to date</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">GWh lost</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1,660 - 1,670</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">420 - 430</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2,080 - 2,100</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">228</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Financing </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Financing for these capital expenditures
is expected to be provided by cash flow from operating activities, existing borrowing capacity, reinvested dividends under the
Plan, and capital markets. The funds required for committed growth, sustaining capital, and productivity projects are not expected
to be significantly impacted by the current economic environment due to the highly contracted nature of our cash flows, our financial
position, and the amount of capital available to us under existing committed credit facilities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt">(<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>[1]</B></FONT>)
Represents amounts incurred as of March 31, 2013.</FONT></P>


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    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>accounting
changes</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Adoption of New or Amended IFRS</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On Jan. 1, 2013, we adopted the following
new accounting standards that were previously issued by the <FONT STYLE="color: black">International Accounting Standards Board
(&#8220;</FONT>IASB&#8221;):</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IFRS 10 <I>Consolidated Financial Statements
</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">IFRS 10 replaces the parts of International
Accounting Standard (&#8220;IAS&#8221;) 27 <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-weight: normal"><I>Consolidated</I></FONT><I><B>
</B><FONT STYLE="font-weight: normal">and Separate</FONT></I> <I>Financial Statements </I>that<B> </B><FONT STYLE="font-weight: normal">deal
with consolidated financial statements</FONT><B> </B>and Standing Interpretations Committee <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-weight: normal">(&#8220;SIC&#8221;)</FONT><B>
</B>Interpretation 12 <FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-weight: normal"><I>Consolidation - Special Purpose
Entities</I>.</FONT><B>&nbsp; </B><FONT STYLE="font-weight: normal">IFRS 10</FONT><B><I> </I></B>defines the principle of control,
establishes control as the basis for determining when entities are to be consolidated, and provides guidance on how to apply the
principle of control to identify whether an investor controls an investee.&nbsp; Under IFRS 10, an investor controls an investee
when it has all of the following: (i) power over the investee; (ii) exposure, or rights, to variable returns from the investee;
and (iii) the ability to affect those returns.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We applied IFRS 10 retrospectively by reassessing
whether, on Jan. 1, 2013, we had control of all of our previously consolidated entities. As a result of adopting IFRS 10, no changes
arose in the entities we controlled and consolidated.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IFRS 11 <I>Joint Arrangements</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">IFRS 11 replaces IAS 31 <I>Interests in
Joint Ventures</I> and SIC-13 <I>Jointly Controlled Entities &#8211; Non-Monetary Contributions by Venturers</I>.&nbsp; IFRS 11
provides for a<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B> </B><FONT STYLE="font-weight: normal">principles-based
approach to the accounting for joint arrangements that requires an entity to recognize its contractual rights and obligations arising
from its involvement in joint arrangements.&nbsp; A joint arrangement is an arrangement in which two or more parties have joint
control.&nbsp; Under IFRS 11, joint arrangements are classified as either a joint operation or a joint venture, whereas under IAS
31, they were classified as a jointly controlled asset, jointly controlled operation or a jointly controlled entity.&nbsp; IFRS
11 requires the use of the equity method of accounting for interests in joint ventures, whereas IAS 31 permitted a choice of the
equity method or proportionate consolidation for jointly controlled entities. Under IFRS 11, for joint operations, each party recognizes
its respective share of the assets, liabilities, revenues and expenses of the arrangement, generally resulting in proportionate
consolidation accounting.&nbsp; </FONT></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-weight: normal">We applied
IFRS 11 retrospectively by reassessing the type of, and accounting for, each joint arrangement in existence at<BR>
Jan. 1, 2013. No significant impacts resulted.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IFRS 12 <I>Disclosure of Interests in
Other Entities</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">IFRS 12 contains enhanced disclosure requirements
about an entity&#8217;s interests in subsidiaries, joint arrangements, associates, and consolidated and unconsolidated structured
entities (special purpose entities). The objective of IFRS 12 is that an entity should disclose information that helps financial
statement users evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests
on its financial statements. Disclosures arising from the adoption of IFRS 12 can be found in Notes 7, 10, and 18 of our interim
consolidated financial statements.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IFRS 13 <I>Fair Value Measurement</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">IFRS 13 establishes a single source of guidance
for all fair value measurements required by other IFRS, clarifies the definition of fair value, and enhances disclosures about
fair value measurements. IFRS 13 applies when other IFRS require or permit fair value measurements or disclosures. IFRS 13 specifies
how an entity should measure fair value and disclose fair value information. It does not specify when an entity should
measure an asset, a liability, or its own equity instrument at fair value. Our adoption of
IFRS 13, prospectively on Jan. 1, 2013, did not have a material financial impact upon the consolidated financial position or results
of operations, however, certain new or enhanced disclosures are required and can be found in Note 11 of our interim consolidated
financial statements.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IAS 1 <I>Presentation of Financial Statements</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Amendments to IAS 1 <I>Presentation of Financial
Statements</I> issued in June 2011 were intended to improve the consistency and clarity of the presentation of items of comprehensive
income by <FONT STYLE="color: black">requiring that items presented in OCI be grouped on the basis of whether they are at some
point reclassified from OCI to net earnings or not. </FONT>The Consolidated Statements of Comprehensive Income (Loss) have been
reorganized to comply with the required groupings.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IAS 19 <I>Employee Benefits</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Amendments to IAS 19 <I>Employee Benefits</I>
are intended to improve the recognition, presentation, and disclosure of defined benefit plans<FONT STYLE="color: black">. The
amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur,
thus eliminating the &#8220;corridor approach&#8221; previously permitted</FONT>. All actuarial gains and losses must be recognized
immediately through other comprehensive income and the net pension liability or asset recognized at the full amount of the plan
deficit or surplus. Additional changes relate to the presentation, into three components, of changes in defined benefit obligations
and plan assets: service cost and net interest cost is recognized in net earnings and remeasurements are recognized in other comprehensive
income. The net interest cost introduced in these amendments removes the concept of expected return on plan assets that was previously
recognized in net earnings.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We calculate the net interest cost for our
defined benefit plans by applying the discount rate at the beginning of the reporting period to the net defined benefit liability
at the beginning of the reporting period. An expected return on plan assets is no longer calculated and recognized as part of pension
expense. The elimination of the corridor method had no impact as we have, since adoption of IFRS, recognized actuarial gains and
losses in OCI in the period in which they occurred.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-weight: normal">On
adoption, we</FONT> applied the amendments retrospectively. The impacts as at Dec. 31, 2012 and Jan 1, 2012, respectively, were
an increase in the cumulative prior periods&#8217; pre-tax pension expense of $17 million and $11 million ($12 million and $8 million
after-tax, respectively), as a result of the application of the net interest cost requirements.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">For the three months ended March 31, 2012,
OM&amp;A expense increased by $1 million as a result of increased pension expense, Net actuarial losses on defined benefit plans
as reported in OCI decreased by $1 million, and basic and diluted net earnings per share attributable to common shareholders decreased
by $0.01.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Interpretation 20 <I>Stripping Costs
in the Production Phase of a Surface Mine (&#8220;IFRIC 20&#8221;)</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">IFRIC 20 clarifies the requirements for
accounting for stripping costs in the production phase of a surface mine. Stripping costs are costs associated with the process
of removing waste from a surface mine in order to gain access to mineral ore deposits. The Interpretation clarifies when production
stripping should lead to the recognition of an asset and how that asset should be measured, both initially and in subsequent periods.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We recognize a stripping activity asset
for our Highvale mine when all of the following are met: (i) it is probable that the future benefit associated with improved access
to the coal reserves associated with the stripping activity will be realized; (ii) the component of the coal reserve to which access
has been improved can be identified; and (iii) the costs related to the stripping activity associated with that component can be
measured reliably. Costs include those directly incurred to perform the stripping activity as well as an allocation of directly
attributable overheads. The resulting stripping activity asset is amortized on a unit-of-production basis over the expected useful
life of the identified component that it relates to. The amortization is recognized as a component of the standard cost of coal
inventory.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">As required by the transitional provision
of IFRIC 20, we applied the Interpretation to production stripping costs incurred on or after Jan 1, 2011, which will be the earliest
comparative period presented within our annual financial statements for the year ended<BR>
Dec. 31, 2013. The impacts on the Condensed Consolidated Statements of Financial Position as at Dec. 31, 2012 were to recognize
$9 million in costs as a stripping activity asset, increase coal inventory by $2 million, both classified within Inventory, increase
Deferred income tax liabilities by $3 million, and decrease Retained deficit by $8 million. The impacts on the Condensed Consolidated
Statements of Financial Position as at Jan. 1, 2012 were to recognize $9 million in costs as a stripping activity asset, decrease
coal inventory by $2 million, both classified within Inventory, increase Deferred income tax liabilities by $2 million, and increase
Retained earnings by $5 million.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The impact of this change in accounting
policy on the three months ended March 31, 2012 was not material.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>IFRS 7 <I>Financial Instruments: Disclosures</I></B></P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Amendments to IFRS 7 include disclosures
about all recognized financial instruments that are set off in accordance with IAS 32. The amendments also require disclosure of
information about recognized financial instruments subject to enforceable master netting arrangements and similar agreements even
if they are not set off under IAS 32. The resulting disclosures can be found in Note 12 of our interim consolidated financial statements.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Annual Improvements 2009-2011</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">In May 2012, the IASB issued a collection
of necessary, non-urgent amendments to several IFRS resulting from its annual improvements process. We have applied the amendments,
as applicable, on Jan. 1, 2013. None of the amendments, which are generally technical and narrow in scope, had a material financial
impact upon the consolidated financial position or results of operations.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>future
accounting changes</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Additional new or amended accounting standards
that have been previously issued by the IASB but are not yet effective, and have not yet been applied, are as follows: IFRS 9 <I>Financial
Instruments</I>, IAS 32 <I>Financial Instruments: Presentation</I>, and <I>Investment Entities</I> (Amendments to IFRS 10 and 11
and IAS 27). Please refer to the Future Accounting Changes section of our 2012 Annual MD&amp;A for more information.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>Additional
IFRS Measures</B></FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">An additional
IFRS measure is a line item, heading, or subtotal that is relevant to an understanding of the financial statements but is not a
minimum line item mandated under IFRS, or the presentation of a financial measure that is relevant to an understanding of the financial
statements but is not presented elsewhere in the financial statements. We have included line items entitled &#8220;gross margin&#8221;
and &#8220;operating income (loss)&#8221; in our Condensed Consolidated Statements of Earnings (Loss) for the three months ended
</FONT><BR>
<FONT STYLE="color: black">March 31, 2013 and 2012. Presenting these line items </FONT>provides management and investors with a
measurement of ongoing operating performance that is readily comparable from period to period.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>NON-IFRS
MEASURES </B></FONT></P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We evaluate our performance and the performance
of our business segments using a variety of measures. Those discussed below, and elsewhere in this MD&amp;A, are not defined under
IFRS and, therefore, should not be considered in isolation or as an alternative to or to be more meaningful than net earnings attributable
to common shareholders or cash flow from operating activities, as determined in accordance with IFRS, when assessing our financial
performance or liquidity. These Non-IFRS measures are not necessarily comparable to a similarly titled measure of another company.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Presenting earnings on a comparable basis,
comparable gross margin, comparable operating income, and comparable EBITDA from period to period provides management and investors
with supplemental information to evaluate earnings trends in comparison with results from prior periods. In calculating these items,
we exclude the impact related to certain hedges that are either<BR>
de-designated or deemed ineffective for accounting purposes, as management believes that these transactions are not representative
of our business operations. As these gains (losses) have already been recognized in earnings in current or prior periods, future
reported earnings will be lower; however, the expected cash flows from these contracts will not change. In calculating comparable
earnings measures we have also excluded the first quarter 2012 coal inventory writedown, as the recognition of the writedown is
related to the hedges that were de-designated or deemed ineffective during prior quarters.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Other adjustments to earnings, such as the
income tax recovery related to the deferred tax rate adjustment, the income tax recovery related to the resolution of certain outstanding
tax matters, the gain on sale of assets, and restructuring charges have also been excluded as management believes these transactions
are not representative of our business operations. Earnings on a comparable basis per share are calculated using the weighted average
common shares outstanding during the period.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Comparable operating income and EBITDA also
include the earnings from the finance lease facilities that we operate.&nbsp; The finance lease income is used as a proxy for the
operating income and EBITDA of these facilities.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B><I>&nbsp;</I></B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><B><I>Net Earnings on a Comparable Basis</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Net earnings on a comparable basis are reconciled
to net earnings attributable to common shareholders below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings (loss) attributable to common shareholders</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(11)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">88</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts associated with certain de-designated and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">ineffective hedges, net of tax</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>27</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(55)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Inventory writedown, net of tax</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">22</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to deferred tax rate </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">adjustment</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(6)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Income tax recovery related to the resolution of certain </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">outstanding tax matters</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(9)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gain on sale of assets, net of tax</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(2)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Loss on assumption of pension obligations, net of tax</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>22</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Net earnings on a comparable basis</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>32</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">44</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 30%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Weighted average number of common shares </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">outstanding in the period</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>258</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">225</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Net earnings on a comparable basis per share</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.12</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.20</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Comparable Gross Margin </I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Comparable gross margin is calculated as
follows:<FONT STYLE="color: black"> </FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Gross margin</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>339</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">469</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts associated with certain de-designated and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">ineffective hedges</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(85)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts to revenue associated with Sundance </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Units 1 and 2<SUP>(1)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(10)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable gross margin</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>380</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">374</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Comparable Operating Income</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">A reconciliation of comparable operating
income is as follows:<B><I> </I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operating income</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">171</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts associated with certain de-designated and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">ineffective hedges</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(85)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Inventory writedown</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="5" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Finance lease income</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>11</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable operating income</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>128</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">122</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt">(1) The results
have been adjusted retroactively for the impact of Sundance Units 1 and 2. Comparative figures have also been adjusted in this
table only to provide period over period comparability.<B><I>&nbsp;</I></B></FONT></P>


<!-- Field: Page; Sequence: 31 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%"><P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: right"><font style="font-size: 7pt; text-transform: uppercase">transalta corporation / Q1 2013&nbsp;&nbsp;&nbsp;31</font></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Comparable EBITDA</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Presenting comparable EBITDA from period
to period provides management and investors with a proxy for the amount of cash generated from operating activities before net
interest expense, non-controlling interests, income taxes, and working capital adjustments.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">A reconciliation of comparable EBITDA to
operating income is as follows:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Operating income</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">171</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Inventory writedown</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Finance lease income</FONT></p>
    </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>11</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Depreciation and amortization per the Consolidated </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Statements of Cash Flows<SUP>(1)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>139</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">140</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts associated with certain de-designated and </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">ineffective hedges</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>41</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(85)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Impacts to revenue associated with Sundance </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Units 1 and 2</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>-</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(10)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Comparable EBITDA</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>267</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">252</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Funds from Operations and Funds from
Operations per Share</I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Presenting funds from operations and funds
from operations per share from period to period provides management and investors with a proxy for the amount of cash generated
from operating activities, before changes in working capital, and provides the ability to evaluate cash flow trends more readily
in comparison with results from prior periods. Funds from operations per share is calculated as follows using the weighted average
number of common shares outstanding during the period:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash flow from operating activities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>256</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">183</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Payment of restructuring costs</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Timing of payments related to assumption of </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">pension obligations</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>9</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">-</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Change in non-cash operating working capital balances</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(77)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Funds from operations</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>192</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">189</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Weighted average number of common shares </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">outstanding in the period</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>258</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">225</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Funds from operations per share</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>0.74</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">0.84</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt">(1) To calculate
comparable EBITDA, we use depreciation and amortization per the Condensed Consolidated Statements of Cash Flows in order to account
for depreciation related to mine assets, which is included in fuel and purchased power on the Condensed Consolidated Statements
of Earnings.</FONT></P>


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                                                                                                                                                                                                                                                                                                                                                                                                                  corporation
                                                                                                                                                                                                                                                                                                                                                                                                                  /
                                                                                                                                                                                                                                                                                                                                                                                                                  Q1
                                                                                                                                                                                                                                                                                                                                                                                                                  2013&nbsp;</FONT>&nbsp;<FONT STYLE="font-size: 7pt">&nbsp;32</FONT></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Free Cash Flow </I></B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Free cash flow represents the amount of
cash generated from operations by our business, before changes in working capital, that is available to invest in growth initiatives,
make scheduled principal repayments of debt, pay additional common share dividends, or repurchase common shares. Changes in working
capital are excluded so as to not distort free cash flow with changes that we consider temporary in nature, reflecting, among other
things, the impact of seasonal factors and the timing of capital projects.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Sustaining capital and productivity expenditures
for the three months ended March 31, 2013 represent total additions to property, plant, and equipment and intangibles per the Condensed
Consolidated Statements of Cash Flows less $77 million that we have invested in projects and growth. For the same period in 2012,
we invested $37 million ($36 million net of joint venture contributions) in projects and growth.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The reconciliation between cash flow from
operating activities and free cash flow is outlined below:</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>3 months ended March 31</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 66%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash flow from operating activities</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>256</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">183</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Add (deduct):</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Changes in non-cash operating working capital</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(77)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Sustaining capital and productivity expenditures</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(55)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(107)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividends paid on common shares<SUP>(1)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(20)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(45)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividends paid on preferred shares</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(9)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(8)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Distributions paid to subsidiaries' non-controlling interests</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(19)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(19)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Free cash flow</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>76</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">10</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">We seek to maintain sufficient cash balances
and committed credit facilities to fund periodic net cash outflows related to our business.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 7.5pt/150% Arial, Helvetica, Sans-Serif; margin: 0 0 6pt; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">SELECTED
QUARTERLY INFORMATION</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 41%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q2 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q3 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q4 2012</FONT></p>
    </TD>
    <TD NOWRAP STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Q1 2013</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Revenue</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">398</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">522</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">646</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black"><B>540</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings (loss) attributable to common shareholders</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">(798)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">56</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">39</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black"><B>(11)</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings (loss) per share attributable to common shareholders, </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">basic and diluted</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">(3.52)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.24</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.15</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black"><B>(0.04)</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable earnings (loss) per share</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">(0.10)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.18</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.22</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-weight: bold">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black"><B>0.12</B></FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q2 2011</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q3 2011</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q4 2011</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Q1 2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Revenue</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">507</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">613</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">688</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">644</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings attributable to common shareholders</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">12</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">50</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">24</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">88</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Net earnings per share attributable to common shareholders, </FONT><BR>
<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">basic and diluted</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.05</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.22</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.11</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.39</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable earnings per share</FONT></p>
    </TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.29</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.27</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.13</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif; color: black">0.20</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font-size: 7pt">(1)
<i>Net of dividends reinvested under the Plan</i></font></P>


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                                                                                                                                                                                                                                                                                                                                                                                       corporation
                                                                                                                                                                                                                                                                                                                                                                                       /
                                                                                                                                                                                                                                                                                                                                                                                       Q1
                                                                                                                                                                                                                                                                                                                                                                                       2013&nbsp;&nbsp;&nbsp;33</FONT></P></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">Basic and diluted
earnings per share attributable to common shareholders and comparable earnings per share are calculated each period using the weighted</FONT>
average common shares outstanding during the period. As a result, the sum of the earnings per share for the four quarters making
up the calendar year may sometimes differ from the annual earnings per share.</P>

<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">disclosure
controls and procedures</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">As required by Rule 13a-15 under the <I>Securities
Exchange Act of 1934</I> (&#8220;Exchange Act&#8221;), management has evaluated, with the participation of our Chief Executive
Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered
by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required
to be disclosed in the reports we file or submit under the Exchange Act are recorded, processed, summarized, and reported within
the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our
reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosure. In designing and
evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to
apply its judgment in evaluating and implementing possible controls and procedures.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">There has been no change in the internal
control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting. Based on the foregoing evaluation, our Chief Executive Officer
and Chief Financial Officer have concluded that, as of March 31, 2013, the end of the period covered by this report, our disclosure
controls and procedures were effective at a reasonable assurance level.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">FORWARD-LOOKING
STATEMENTS</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">This
MD&amp;A, the documents incorporated herein by reference, and other reports and filings made with the securities regulatory authorities
include forward-looking statements. All forward-looking statements are based on our beliefs as well as assumptions based on information
available at the time the assumption was made and on management&#8217;s experience and perception of historical trends, current
conditions and expected future developments, as well as other factors deemed appropriate in the circumstances. Forward-looking
statements are not facts, but only predictions and generally can be identified by the use of statements that include phrases such
as &#8220;may&#8221;, &#8220;will&#8221;, &#8220;believe&#8221;, &#8220;expect&#8221;, &#8220;anticipate&#8221;, &#8220;intend&#8221;,
&#8220;plan&#8221;, &#8220;foresee&#8221;, &#8220;potential&#8221;, &#8220;enable&#8221;, &#8220;continue&#8221; or other comparable
terminology. These statements are not guarantees of our future performance and are subject to risks, uncertainties, and other important
factors that could cause our actual performance to be materially different from that projected.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">In
particular, this MD&amp;A contains forward-looking statements pertaining to the following: expectations relating to the timing
of the completion and commissioning of projects under development, including uprates and major projects, and their attendant costs;
our estimated spend on growth and sustaining capital and productivity projects; expectations in terms of the cost of operations,
capital spend, and maintenance, and the variability of those costs; the impact of certain hedges on future reported earnings and
cash flows; expectations related to future earnings and cash flow from operating and contracting activities; estimates of fuel
supply and demand conditions and the costs of procuring fuel; expectations for demand for electricity in both the short term and
long term, and the resulting impact on electricity prices; expected impacts of fewer anticipated turnarounds, load growth, increased
capacity, and natural gas costs on power prices; expectations in respect of generation availability, capacity, and production;
expected financing of our capital expenditures; expected governmental regulatory regimes and legislation and their expected impact
on us, as well as the cost of complying with resulting regulations and laws; our trading strategy and the risk involved in these
strategies; estimates of </FONT><font style="text-transform: none; letter-spacing: 0pt">future tax rates, future tax expense,
and the adequacy of tax provisions; accounting estimates; anticipated growth rates in our markets; expectations for the outcome
of existing or potential legal and contractual claims; expectations for the ability to access capital markets at reasonable terms;
the estimated impact of changes in interest rates and the value of the Canadian dollar relative to the U.S. dollar; the monitoring
of our exposure to liquidity risk; expectations in respect to the global economic environment; our credit practices; and the estimated
contribution of Energy Trading activities to gross margin.</font></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">Factors
that may adversely impact our forward-looking statements include risks relating to: fluctuations in market prices and the availability
of fuel supplies required to generate electricity; our ability to contract our generation for prices that will provide expected
returns; the regulatory and political environments in the jurisdictions in which we operate; environmental requirements and changes
in, or liabilities under, these requirements; changes in general economic conditions including interest rates; operational risks
involving our facilities, including unplanned outages at such facilities; disruptions in the transmission and distribution of electricity;
the effects of weather; disruptions in the source of fuels, water, or wind required to operate our facilities; natural disasters;
the threat of domestic terrorism and cyber-attacks; equipment failure; energy trading risks; industry risk and competition; fluctuations
in the value of foreign currencies and foreign political risks;&nbsp;the need for additional financing; structural subordination
of securities; counterparty credit risk; insurance coverage; our provision for income taxes; legal and contractual proceedings
involving the Corporation; reliance on key personnel;&nbsp;labour relations matters; and&nbsp;development projects and acquisitions.
The foregoing risk factors, among others, are described in further detail in the Risk Management section of our 2012 Annual MD&amp;A
and under the heading &#8220;Risk Factors&#8221; in our 2013 Annual Information Form.</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">&nbsp;</FONT></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none; letter-spacing: 0pt">Readers
are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue
reliance on these forward-looking statements. The forward-looking statements included in this document are made only as of the
date hereof and we do not undertake to publicly update these forward-looking statements to reflect new information, future events
or otherwise, except as required by applicable laws. In light of these risks, uncertainties, and assumptions, the
forward-looking events might occur to a different extent or at a different time than we have described, or might not occur. We
cannot assure that projected results or events will be achieved.</FONT></P>

<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7.5pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>&nbsp;</B></FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>Supplemental
information</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 62%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="width: 1%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD STYLE="width: 15%; border-bottom: windowtext 1pt solid; font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>March 31, 2013</B></FONT></p>
    </TD>
    <TD STYLE="width: 16%; border-bottom: windowtext 1pt solid; font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dec. 31, 2012</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Closing market price (TSX) ($)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14.85</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">15.12</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Price range for the last 12 months (TSX) ($)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">High</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>16.86</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">21.37</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Low</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>14.59</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">14.11</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt" align="right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Debt to invested capital (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>55.8</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">55.6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Debt to invested capital excluding non-recourse debt (%)<SUP>(1)</SUP></FONT></p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>53.5</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">53.3</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Debt to invested capital including finance lease obligation and non-recourse debt (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>55.9</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">55.6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Return on equity attributable to common shareholders (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(27.5)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(23.7)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable return on equity attributable to common shareholders<SUP>(1), (2)</SUP> (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4.0</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4.5</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Return on capital employed<SUP>(2) </SUP>(%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(4.6)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(3.1)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Comparable return on capital employed<SUP>(1), (2) </SUP>(%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>5.9</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">5.3</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Cash dividends per share<SUP>(2)</SUP> ($)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>1.16</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">1.16</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Price to comparable earnings ratio<SUP>(2)</SUP> (times)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>35.4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">30.2</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Earnings coverage<SUP>(2)</SUP> (times)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(1.7)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(1.2)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividend payout ratio based on net earnings<SUP>(2)</SUP> (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>(39.4)</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">(44.1)</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividend payout ratio based on comparable earnings<SUP>(1), (2) </SUP>(%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>267.6</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">231.6</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividend payout ratio based on funds from operations<SUP>(1), (2), (3) </SUP>(%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>35.9</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">34.7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Dividend yield<SUP>(2)</SUP> (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>7.8</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">7.7</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Adjusted cash flow to debt<SUP>(2), (3)</SUP> (%)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>19.1</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">19.0</FONT></p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">Adjusted cash flow to interest coverage<SUP>(2), (3)</SUP> (times)</FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0">&nbsp;</p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; font: bold 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>4.4</B></FONT></p>
    </TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; font: 8pt/18pt Arial, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
     <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif">4.4</FONT></p>
    </TD></TR>
</TABLE>
<P STYLE="font: italic 1pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(1)
These ratios incorporate items that are not defined under IFRS. None of these measurements should be used in isolation or as a
substitute for the Corporation&#8217;s reported financial performance or position as presented in accordance with IFRS. These ratios
are useful complementary measurements for assessing the Corporation&#8217;s financial performance, efficiency, and liquidity and
are common in the reports of other companies but may differ by definition and application. For a reconciliation of the Non-IFRS
measures used in this calculation, refer to the Non-IFRS Measures section of this MD&amp;A.</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0in">(2) Last 12
months.</P>

<P STYLE="font: italic 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">(3)
These ratios have been adjusted for the impact of the Sundance Units 1 and 2 arbitration, payment of restructuring costs, and timing
of payments related to assumption of pension obligations.</P>

<P STYLE="font: italic 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt"><B>Ratio
Formulas</B></FONT></P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Debt to invested capital</B> = long-term
debt including current portion - cash and cash equivalents / long-term debt including current portion + non-controlling interests
+ equity attributable to shareholders - cash and cash equivalents</P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Return on equity attributable to common
shareholders</B> = net earnings attributable to common shareholders or earnings on a comparable basis / average equity attributable
to common shareholders excluding AOCI</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Return on capital employed</B> = earnings
before non-controlling interests and income taxes + net interest expense or comparable earnings before non-controlling interests
and income taxes + net interest expense / average invested capital excluding AOCI</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Price to comparable earnings ratio</B>
= current period&#8217;s closing market price / comparable earnings per share</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Earnings coverage </B>= net earnings
attributable to common shareholders+ income taxes + net interest expense / interest on debt - interest income</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Dividend payout ratio</B> = common
share dividends / net earnings attributable to common shareholders or earnings on a comparable basis or funds from operations</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Dividend yield </B>= dividend per common
share / current period&#8217;s closing market price</P>

<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Adjusted cash flow to debt</B> = cash
flow from operating activities before changes in working capital / average total debt - average cash and cash equivalents</P>


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<P STYLE="font: 4pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Adjusted cash flow to interest coverage
</B>= cash flow from operating activities before changes in working capital + interest on debt - interest income - capitalized
interest / interest on debt - interest income</P>

<P STYLE="font: 7pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; letter-spacing: 1.5pt; text-align: justify">GLOSSARY
OF KEY TERMS</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Availability </B>- A measure of the
time, expressed as a percentage of continuous operation 24 hours a day, 365 days a year that a generating unit is capable of generating
electricity, regardless of whether or not it is actually generating electricity.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>British Thermal Units (Btu)</B> - A
measure of energy. The amount of energy required to raise the temperature of one pound of water one degree Fahrenheit, when the
water is near 39.2 degrees Fahrenheit.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Capacity</B> - The rated continuous
load-carrying ability, expressed in megawatts, of generation equipment.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Derate </B>- To lower the rated electrical
capability of a power generating facility or unit.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Force Majeure </B>- Literally means
&#8220;major force&#8221;. These clauses excuse a party from liability if some unforeseen event beyond the control of that party
prevents it from performing its obligations under the contract.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Geothermal Plant</B> - A plant in which
the prime mover is a steam turbine. The turbine is driven either by steam produced from hot water or by natural steam that derives
its energy from heat found in rocks or fluids at various depths beneath the surface of the earth. The energy is extracted by drilling
and/or pumping.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Gigawatt</B> - A measure of electric
power equal to 1,000 megawatts.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Gigawatt Hour (GWh)</B> - A measure
of electricity consumption equivalent to the use of 1,000 megawatts of power over a period of one hour.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Greenhouse Gas (GHG) </B>- Gases having
potential to retain heat in the atmosphere, including water vapour, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
and perfluorocarbons.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Heat Rate</B> - A measure of conversion,
expressed as Btu/MWh, of the amount of thermal energy required to generate electrical energy.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Megawatt (MW)</B> - A measure of electric
power equal to 1,000,000 watts.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Megawatt Hour (MWh)</B> - A measure
of electricity consumption equivalent to the use of 1,000,000 watts of power over a period of one hour.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Net Maximum Capacity</B> - The maximum
capacity or effective rating, modified for ambient limitations, that a generating unit or power plant can sustain over a specific
period, less the capacity used to supply the demand of station service or auxiliary needs.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Power Purchase Arrangement (PPA) -</B>
A long-term arrangement established by regulation for the sale of electric energy from formerly regulated generating units to PPA
Buyers.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Renewable Power</B> - Power generated
from renewable terrestrial mechanisms including wind, geothermal, solar, and biomass with regeneration.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Spark Spread -</B> A measure of gross
margin per MW (sales price less cost of natural gas).</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Supercritical Combustion Technology:
</B>The most advanced coal-combustion technology in Canada employing a supercritical boiler, high-efficiency multi-stage turbine,
flue gas desulphurization unit (scrubber), bag house, and low nitrogen oxide burners.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Turbine </B>- A machine for generating
rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert kinetic energy
of fluids to mechanical energy through the principles of impulse and reaction or a mixture of the two.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Turnaround: </B>Periodic planned shutdown
of a generating unit for major maintenance and repairs. Duration is normally in weeks. The time is measured from unit shutdown
to putting the unit back on line.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Unplanned Outage</B> - The shut down
of a generating unit due to an unanticipated breakdown.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Uprate</B> - To increase the rated
electrical capability of a power generating facility or unit.</P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Value at Risk (VaR)</B> - A measure
to manage earnings exposure from energy trading activities.</P>


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<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><IMG SRC="image_002.jpg" ALT="" STYLE="height: 40px; width: 150px"></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>TransAlta Corporation</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">110 - 12th Avenue S.W.</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Box 1900, Station &#8220;M&#8221;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Calgary, Alberta Canada T2P 2M1</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Phone</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">403.267.7110</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Website</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">www.transalta.com</P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>CIBC Mellon Trust Company</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">P.O. Box 7010 Adelaide Street Station</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Toronto, Ontario Canada M5C 2W9</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Phone</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Toll-free in North America: 1.800.387.0825</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Toronto or outside North America: 416.643.5500</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Fax </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">416.643.5501</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Website </B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">www.cibcmellon.com</P>

<P STYLE="font: 12pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>FOR MORE INFORMATION</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Media and Investor Inquiries</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Investor Relations</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Phone</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">1.800.387.3598 in Canada and United States</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">or 403.267.2520</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Fax</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">403.267.2590</P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>E-mail</B></P>

<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">investor_relations@transalta.com</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

<P STYLE="font: italic 6.5pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: -9pt">&nbsp;</P>

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<DESCRIPTION>PRESS RELEASE DATED APRIL 23, 2013
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<HTML>
<HEAD>
     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><IMG SRC="image_002.gif" ALT="" STYLE="height: 93px; width: 624px"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>TransAlta Reports Solid First Quarter 2013
Results </B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>HIGHLIGHTS</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">Strong fleet availability of 91.5 per cent
for the quarter - supporting the annual target of 89 to 90 per cent </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">Comparable EBITDA<SUP>(1,2,3)</SUP> increased
to $267 million for the quarter, up $15 million from the same period in 2012 driven by increased production from the generation
segment </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">Funds From Operations<SUP>(2,3)</SUP> (&#8220;FFO&#8221;)
increased $3 million to $192 million compared to prior year</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">Operations Maintenance and Administration costs
(&#8220;OM&amp;A&#8221;) declined $13 million from the same period in 2012</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">Energy Trading results delivered $17 million
of gross margin in the first quarter</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 11pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 11pt">New Richmond wind farm in Quebec began commercial
operation on March 13, 2013, adding 68 MW to TransAlta&#8217;s renewables portfolio</FONT></TD></TR></TABLE>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify"><B>CALGARY, Alberta (Apr. 23, 2013)</B>
&#8211; TransAlta Corporation (TransAlta) (TSX: TA; NYSE: TAC) today reported a comparable EBITDA increase of $15 million to $267
million compared to the first quarter of 2012 and an increase in funds from operations of $3 million to $192 million compared to
the prior year.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&#8220;I am pleased to release results
today that demonstrate another solid quarter for TransAlta with higher year over year production as well as strong fleet availability
which support our annual targets,&#8221; said Dawn Farrell, President and CEO. &#8220;Furthermore, we have been able to offset
declines in revenue from low pricing in our Centralia operations with strong performance by our fleet and growth from our Solomon
acquisition. Our cost reduction efforts from last year are holding and our teams are focused on growth. The addition of the New
Richmond wind farm will be a positive contribution to shareholder value going forward.&#8221;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">Despite delivering a solid operational
quarter and consistent EBITDA, comparable earnings<SUP>(2)</SUP> decreased year over year largely due to lower comparable tax recoveries
in the quarter compared to the same period in 2012 which recorded a substantial recovery from a one-time win.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0"><I>(1) EBITDA refers to Earnings before interest, taxes,
depreciation and amortization.</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0"><I>(2) Comparable earnings (loss), comparable earnings
(loss) per share, comparable EBITDA, and funds from operations, are not defined under International Financial Reporting Standards
(&#8220;IFRS&#8221;). Presenting these measures from period to period provides supplemental information to help management and
shareholders evaluate earnings&#8217; trends in comparison with prior periods' results. Refer to the Non-IFRS Measures section
of the Management's Discussion and Analysis (&quot;MD&amp;A&quot;) for further discussion of these items, including, where applicable,
reconciliations to net earnings (loss) attributable to common shareholders, operating income (loss), and cash flow from operating
activities.</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0"><I>(3) Comparable EBITDA and funds from operations are
key supplemental performance measures for TransAlta which provide additional information regarding the company&#8217;s ability
to cover its capital requirements and dividends as well as strengthen its balance sheet and finance growth.</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>- More -</B></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">The company recorded a loss of $11
million on reported earnings for the quarter primarily driven by the de-designation of hedges. For these contracts that settled
in the first quarter of 2013, the related gain had already been recognized in earnings during the first quarter of 2012, with the
cash received in 2013. TransAlta also recorded a one-time loss due to the realization of pension funding obligations associated
with the management of the Highvale mine which were previously included in the cost of coal.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Consistent Strength in Generation
Performance Helping Offset Unfavorable Contract Pricing Conditions</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify"><FONT STYLE="color: black">F</FONT>leet
availability remained strong for first quarter 2013 at 91.5 per cent compared to 91.7 per cent over the same period last year.
<FONT STYLE="color: black">TransAlta is close to completing one of four major maintenance outages planned on its coal units for
the year and remains on track to deliver on its fleet availability goal of 89 &#8211; 90 per cent for the full year.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 16.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Highlights - TransAlta first quarter
2013</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Financial</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 29.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt">Funds from operations of $192 million or $0.74 per share</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 29.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt">Comparable earnings of $32 million or $0.12 per share</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt">Dividends paid of $0.29 per share to common shareholders</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt">Solomon acquisition contributed $9 million to comparable EBITDA</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 29.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Operating</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><U>Coal</U>: Comparable gross margins from TransAlta&#8217;s coal fleet decreased
$5 million quarter over quarter primarily as a result of higher unplanned outages and higher outage penalties due to higher rolling
average pool prices.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 29.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><U>Gas</U>: Comparable gross margins from TransAlta&#8217;s gas fleet, excluding
contributions from the Solomon acquisition, decreased $4 million quarter over quarter as a result of increased gas input costs</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><U>Renewables</U>: Comparable gross margins increased $5 million quarter
over quarter primarily due to higher hydro margins</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><U>Energy Trading</U>: Gross margins were consistent quarter over quarter
at $17 million for the current quarter</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>- More -</B></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Major maintenance </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-right: 4.5pt">2013 marks the return to a normalized planned major maintenance program. TransAlta has nearly
completed the planned Sundance Unit 4 outage - the first of four major outages scheduled for 2013. The three remaining major maintenance
coal outages are on track to be completed in 2013.</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Growth</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 29.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21pt"></TD><TD STYLE="width: 8.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt">TransAlta expanded its Canadian renewables fleet with the addition of the
68 MW New Richmond wind farm in Quebec, which began commercial operation on March 13, 2013</TD></TR></TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Significant Events</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Keephills Unit 1</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 11pt">On March 26,
2013, TransAlta announced an outage that occurred on March 5, 2013 at Unit 1 of our Keephills facility due to a winding failure
found in the generator. TransAlta has given notice under the Power Purchase Arrangement (&#8220;PPA&#8221;) to the PPA Buyer and
the Balancing Pool of a High Impact Low Probability (&#8220;HILP&#8221;) Force Majeure event. &nbsp;In the event of force majeure,
TransAlta is entitled to continue to receive its PPA capacity payment and is protected under the terms of the PPA from having to
pay availability penalties.&nbsp;As a result, TransAlta does not expect the outage to have a material financial impact on the Corporation.</FONT><FONT STYLE="font: 10pt Verdana, Helvetica, Sans-Serif; color: #545555">
</FONT><FONT STYLE="font-size: 11pt">TransAlta is working with the original equipment manufacturer of the generator to safely return
the Unit to service, which is currently expected to be in early May 2013.</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Centralia Thermal </B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 25, 2012, TransAlta announced that
it had entered into an 11-year agreement to provide electricity from the Centralia Thermal plant to Puget Sound Energy (&#8220;PSE&#8221;).
The agreement was approved, with conditions, by the Washington Utilities and Transportation Commission (&#8220;WUTC&#8221;) on</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">January 9, 2013. On January 23, 2013, it was
announced that PSE had filed a petition for reconsideration of certain conditions within the decision issued by the WUTC. On March
22, 2013, the administrative law judge managing the regulatory hearing process issued two Commission Orders to establish an amended
timeline for addressing the petition for reconsideration. The deadline for filing answers to the reconsideration motion is May
30, 2013, and the timeline for a decision on the reconsideration motion is no later than June 28, 2013.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Sunhills Mining Limited Partnership
</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">Effective January 17, 2013, TransAlta
assumed, through its wholly owned Sunhills Mining Limited Partnership (&#8220;Sunhills&#8221;), operations and management control
of the Highvale Mine. TransAlta and the previous service provider are committed to a seamless transition including continued employment
at the Highvale Mine for more than 600 people and consequently, Sunhills agreed to assume responsibility for certain pension plan
and pension funding obligations which we had previously funded through the payments made under the mining contracts. As a result,
a pre-tax loss of $29 million was recognized, along with the corresponding liabilities.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>- More -</B></P>


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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">Sunhills also entered into a finance
lease for certain mining equipment that was used by the service provider in mining operations. As a result, $21 million in mining
equipment has been capitalized to property, plant and equipment and the related finance lease obligation recognized. Sunhills is
eligible to purchase the assets subject to lease, at the end of the lease term, for a nominal amount.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>The following table depicts key
financial results and statistical operating data:</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>First Quarter 2013 Highlights</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: #DBE5F1">
    <TD STYLE="width: 60%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>In $CAD millions, unless otherwise stated</B></FONT></TD>
    <TD STYLE="width: 20%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>3 months ended March 31, 2013</B></FONT></TD>
    <TD STYLE="width: 20%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>3 months ended March 31, 2012</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Availability (%)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">91.5</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">91.7</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Production (GWh)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">10,644</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">9,441</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Revenue</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$540</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$644</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Gross margin<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$339</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$469</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Operating income<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$76</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$171</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Net earnings (loss) attributable to common shareholders</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$(11)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$88</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Comparable earnings<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$32</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$44</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Basic and diluted earnings (loss) per common share</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$(0.04)</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$0.39</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Comparable earnings per share<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$0.12</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$0.20</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Comparable Earnings before interest, taxes, depreciation, and amortization (EBITDA)<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$267</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$252</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Funds from operations<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$192</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$189</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Funds from operations per share<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$0.74</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$0.84</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Cash flow from operations</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$256</FONT></TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">$183</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 7.5pt 7.5pt 7.5pt 0; text-align: justify"><I>(1) Gross margin and operating
income are Additional IFRS measures. Refer to the Additional IFRS measures section of the MD&amp;A.</I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>(2) Comparable earnings, comparable earnings
per share, comparable EBITDA, funds from operations, and funds from operations per share are not defined under IFRS. Refer to the
Non-IFRS financial measures section of the MD&amp;A for an explanation and, where applicable, reconciliations to net earnings (loss)
attributable to common shareholders, operating income (loss) and cash flow from operating activities.</I></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 7.5pt 7.5pt 7.5pt 0">The complete first quarter report for 2013, including
MD&amp;A and unaudited interim financial statements, as well as our first quarter presentation is available on the Investors section
of our website: www.transalta.com.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Conference call</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">TransAlta will hold a conference
call and web cast at 2:30 p.m. MT (4:30 p.m. ET) today to discuss first quarter 2013 results. The call will begin with a short
address by Dawn Farrell, President and CEO, and Brett Gellner, Chief Financial Officer, followed by a question and answer period
for investment analysts, investors, and other interested parties. A question and answer period for the media will immediately follow.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">Please contact the conference operator
five minutes prior to the call, noting &quot;TransAlta Corporation&quot; as the company and &quot;Brent Ward&quot; as moderator.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>- More -</B></P>


<!-- Field: Page; Sequence: 4 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%">&nbsp;</TD><TD STYLE="text-align: center; width: 34%">&nbsp;</TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Dial-in numbers:</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Toll-free North American participants &#8211;
1-800-319-4610<BR>
Outside of Canada &amp; USA call &#8211; 1-604-638-5340</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 21pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="color: black">A link to the
live webcast will be available </FONT>on the Investor Centre section of TransAlta&#8217;s website at
http://www.transalta.com/investor-centre/events-presentations/webcasts-conference-calls. <FONT STYLE="color: black">If you
are unable to participate in the call, the </FONT>instant replay is accessible at 1-604-638-9010 with TransAlta pass code
2231 followed by the # sign. A transcript of the broadcast will be posted on TransAlta&#8217;s website once it becomes
available.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Note: If using a hands-free phone, lift the
handset and press one to ask a question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><I>TransAlta is a
power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate
risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta&#8217;s
focus is to efficiently operate geothermal, wind, hydro, natural gas and coal facilities in order to provide customers with a reliable,
low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities
in which it works and lives. TransAlta has been selected by Jantzi-Sustainalytics as one of Canada&#8217;s Top 50 Socially Responsible
Companies since 2009 and is recognized globally for its leadership on sustainability and corporate responsibility standards by
FTSE4Good. TransAlta is Canada&#8217;s largest investor-owned renewable energy provider.</I></P>

<P STYLE="color: #545555; font: 10pt Verdana, Helvetica, Sans-Serif; margin: 0 4.5pt 0 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify; text-indent: 0in"><I>This news release
may contain forward looking statements, including statements regarding the business and anticipated financial performance of TransAlta
Corporation. These statements are based on TransAlta Corporation&#8217;s belief and assumptions based on information available
at the time the assumption was made. These statements are subject to a number of risks and uncertainties that may cause actual
results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such
differences include legislative or regulatory developments, competition, global capital markets activity, changes in prevailing
interest rates, currency exchange rates, inflation levels, commodity prices and general economic conditions in geographic areas
where TransAlta Corporation operates.</I></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify; text-indent: 0in">Note: All financial
figures are in Canadian dollars unless noted otherwise.</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>-30-</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">For more information:</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 52%"><B><I>Investor inquiries:</I></B></TD>
    <TD STYLE="width: 48%"><B><I>Media inquiries:&#9;</I></B></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>Brent Ward</TD>
    <TD><P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">Stacey Hatcher</P>

</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>Director, Corporate Finance and Investor Relations</TD>
    <TD>Senior Corporate
Relations Advisor</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>Phone: 1-800-387-3598 in Canada and U.S.</TD>
    <TD>Cell: 587-216-2242</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>Email: investor_relations@transalta.com</TD>
    <TD>Toll-free
media number: 1-855-255-9184</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>Alternate local number: 403-267-2540</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0"><B><I>&#9;</I></B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&#9;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&#9;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&#9;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0">&#9;</P>



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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
