<SEC-DOCUMENT>0001137171-16-000307.txt : 20160504
<SEC-HEADER>0001137171-16-000307.hdr.sgml : 20160504
<ACCEPTANCE-DATETIME>20160504105815
ACCESSION NUMBER:		0001137171-16-000307
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		11
CONFORMED PERIOD OF REPORT:	20160331
FILED AS OF DATE:		20160504
DATE AS OF CHANGE:		20160504

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:		161617964

	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>transalta6k05032016.htm
<DESCRIPTION>TRANSALTA CORPORATION - 6-K
<TEXT>
<HTML>
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     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
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<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 12pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Report
of Foreign Private Issuer Pursuant to Rule 13</B></FONT><B>a<FONT STYLE="text-transform: uppercase">-16 or 15</FONT>d<FONT STYLE="text-transform: uppercase">-16
</FONT><BR>
<FONT STYLE="text-transform: uppercase">UNDER the Securities Exchange Act of 1934</FONT></B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt">For the month of May, 2016<BR>
<BR>
Commission File Number 001-15214</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 <U> X&#9;</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: 11pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0.5in">&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-align: justify; 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">333-200773</FONT></TD></TR>
</TABLE>
<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; font-size: 12pt; text-indent: 0in">13.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 12pt; text-indent: 0in"><A HREF="fins.htm">Consolidated comparative interim unaudited financial statements of the registrant for the nine month period ended March 31, 2016.</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 12pt; text-indent: 0in">13.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 12pt; text-indent: 0in"><A HREF="mda.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, 2016.</A></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify; text-indent: 0in">&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-align: justify; text-indent: 0in">The document listed
below as Exhibit 99.1 to this Form 6-K 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>

<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; font-size: 12pt; text-indent: 0in">99.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font-size: 12pt; text-indent: 0in"><A HREF="newsrelease.htm">Press release dated May 3, 2016.</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>


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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 3in; text-indent: 0.5in"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 12pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 38%">&nbsp;</TD>
    <TD STYLE="width: 42%"><b>TransAlta Corporation</b></TD>
    <TD STYLE="width: 20%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>By: <U>/s/Donald Tremblay</U></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Donald Tremblay</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" BORDERCOLOR="White" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0"></P>

<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse">
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 0">Date: May 3, 2016</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="fins.htm">Consolidated comparative interim unaudited financial statements of the registrant for the nine month period ended March 31, 2016.</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"><U><A HREF="mda.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, 2016.</U></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"><A HREF="ex311.htm">Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</A></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">31.2</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in"><A HREF="ex312.htm">Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</A></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"><A HREF="ex321.htm">Certification of Chief Executive Officer regarding Periodic Report Containing Financial Statements.</A></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"><A HREF="ex322.htm">Certification of Chief Financial Officer regarding Periodic Report Containing Financial Statements.</A></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 May 3, 2016.</A></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>2
<FILENAME>fins.htm
<DESCRIPTION>CONSOLIDATED COMPARATIVE INTERIM UNAUDITED FINANCIAL STATEMENTS OF THE REGISTRANT FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2016.
<TEXT>
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     <TITLE>CA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
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<P STYLE="margin: 0"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">TransAlta Corporation&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Condensed Consolidated Statements of Earnings (Loss)</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">(in millions of Canadian dollars except per share
amounts)</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;2016 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;2015 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(Unaudited)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>&nbsp;(Restated)* </I></FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Revenues </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;568 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;593 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Fuel and purchased power </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;208 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;237 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Gross margin</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;360 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;356 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Operations, maintenance, and administration<I> </I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;134 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;122 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;133 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Restructuring</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Taxes, other than income taxes</FONT></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="background-color: white; padding-right: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    &nbsp;8 </B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Operating income </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>107 </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Finance lease income<I> </I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net interest expense<I> (Note 4)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(64)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    &nbsp;(60)</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Foreign exchange gains (losses)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;(6)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Earnings before income taxes </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;53 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Income tax expense (recovery) <I>(Note 5)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(18)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net earnings (loss)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net earnings (loss) attributable to:</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TransAlta shareholders</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interests <I>(Note 6)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings (loss) attributable to TransAlta shareholders</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Preferred share dividends <I>(Note 12)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD COLSPAN="6" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net income (loss) attributable to common shareholders</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (40)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Weighted average number of common shares </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;outstanding in the period </B><I>(millions)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;288 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;277 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net earnings (loss) per share attributable to common </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;shareholders, basic and diluted </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.22 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.14)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&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></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>* See Note 2(A) for prior period restatements.</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>See accompanying notes.</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%"><P STYLE="font: 7pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; text-align: right"><FONT STYLE="font-size: 6pt">transalta
corporation/Q1 2016 </FONT><B>F1</B></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">TransAlta Corporation&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Condensed Consolidated Statements of Comprehensive Income</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">(in millions of Canadian dollars)</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>Unaudited</I></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>&nbsp;(Restated)* </I></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net earnings (loss)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Net actuarial losses on defined benefit plans, net of tax<SUP>(1)</SUP></FONT></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="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Gains on derivatives designated as cash flow hedges, net of tax<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 </FONT></TD></TR>
<TR>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total items that will not be reclassified subsequently to net earnings</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Gains (losses) on translating net assets of foreign operations<SUP>(3)</SUP></FONT></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="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(124)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;110 </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Gains (losses) on financial instruments designated as hedges of </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;foreign operations, net of tax<SUP>(4)</SUP></FONT></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="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(64)</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Gains on derivatives designated as cash flow hedges, net of tax<SUP>(5)</SUP></FONT></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="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;152 </FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Reclassification of (gains) losses on derivatives designated as </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;cash flow hedges to net earnings, net of tax<SUP>(6)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(75)</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total items that will be reclassified subsequently to net earnings</B></FONT></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="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123 </FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Other comprehensive income (loss)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;111 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total comprehensive income </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;97 </FONT></TD></TR>
<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 STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</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-family: Whitney Book"><B>Total comprehensive income attributable to:</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">TransAlta shareholders</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35 </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80 </FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Non-controlling interests <I>(Note 6)</I></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17 </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35 </B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;97 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>* See Note 2(A) for prior period restatements.</I></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(1) Net of income tax recovery of 7 for the three months ended March 31, 2016 (2015 - 5 recovery).</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(2) Net of income tax expense of nil for the three months ended March 31, 2016 (2015 - 1 expense).</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(3) Net of income tax expense of $10 million for the three months ended March 31, 2016 (2015 - nil).</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(4) Net of income tax expense of 4 for the three months ended March 31, 2016 (2015 - 9 recovery).</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(5) Net of income tax expense of 25 for the three months ended March 31, 2016 (2015 - 47 expense).</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(6) Net of income tax recovery of 3 for the three months ended March 31, 2016 (2015 - 25 expense).</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>See accompanying notes.</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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                                         </B>transalta corporation/Q1 2016</FONT></FONT></P>


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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">TransAlta Corporation&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Condensed Consolidated Statements of Financial Position</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">(in millions of Canadian dollars)</P>

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<TR>
    <TD NOWRAP STYLE="width: 53%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>Unaudited</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 4%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 4%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 18%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dec. 31, 2015</FONT></TD></TR>
<TR>
    <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-family: Whitney Book">Cash and cash equivalents<I> </I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Trade and other receivables <I>(Note 8)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;457 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;567 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Prepaid expenses</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Risk management assets <I>(Notes 7 and 8)</I></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;250 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;298 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Inventory </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; 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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;219 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;219 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;985 </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,164 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term portion of finance lease receivables </FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;731 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;775 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Property, plant, and equipment <I>(Note 9)</I></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Cost</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,765 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,854 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Accumulated depreciation</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,735)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,681)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,030 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,173 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Goodwill </FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;464 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;465 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Intangible assets </FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;363 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;369 </FONT></TD></TR>
<TR>
    <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-family: Whitney Book">Deferred income tax assets </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Risk management assets <I>(Notes 7 and 8)</I></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;771 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;797 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other assets </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;136 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;133 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total assets</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,554 </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,947 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Accounts payable and accrued liabilities<I> </I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;336 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;334 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current portion of decommissioning and other provisions<I> </I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;166 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;166 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Risk management liabilities<I> (Notes 7 and 8)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;153 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;200 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Income taxes payable</FONT></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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dividends payable <I>(Note 11)</I></FONT></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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;63 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current portion of long-term debt and finance lease obligations <I>(Note 10)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;103 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;87 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;785 </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;853 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Credit facilities, long-term debt, and finance lease obligations <I>(Note 10)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,927 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,408 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Decommissioning and other provisions<I> </I></FONT></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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;190 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;232 </FONT></TD></TR>
<TR>
    <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-family: Whitney Book">Deferred income tax liabilities<I> </I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;654 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;647 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Risk management liabilities<I> (Notes 7 and 8)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Defined benefit obligation and other long-term liabilities </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;371 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;348 </FONT></TD></TR>
</TABLE>

<P STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 53%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Equity</FONT></TD>
    <TD NOWRAP STYLE="width: 4%; 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 NOWRAP STYLE="vertical-align: bottom; width: 2%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 2%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 15%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Common shares<I> (Note 11)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,093 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,075 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Preferred shares <I>(Note 12)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;942 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;942 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Contributed surplus</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Deficit</FONT></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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(980)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,018)</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Accumulated other comprehensive income </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;314 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;353 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Equity attributable to shareholders</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,378 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,361 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Non-controlling interests<I> (Note 6)</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,164 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,029 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total equity</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,542 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,390 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total liabilities and equity</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,554 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,947 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Commitments and contingencies<I> (Note 13)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>See accompanying notes.</I></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
</TABLE>
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corporation/Q1 2016 </FONT><B>F3</B></P>



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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">TransAlta Corporation&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Condensed Consolidated Statements of Changes in Equity</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><I>(in millions of Canadian dollars)</I></P>

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<TR>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>3 months ended March 31, 2016</B></FONT></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">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" 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 COLSPAN="2" STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><I>Unaudited</I></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Common shares</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Preferred shares</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Contributed </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>surplus</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Deficit</B></FONT></TD>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Accumulated other </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>comprehensive </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>income (loss)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Attributable to </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>shareholders</B></FONT></TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Attributable to </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>non-controlling </B></FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><B>interests</B></FONT></TD>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Total</B></FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Balance, Dec. 31, 2015</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,075</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">942</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">9</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(1,018)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">353</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,361</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">1,029</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">4,390</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net earnings (loss)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">74</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">74</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(3)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">71</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Other comprehensive income (loss):</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net losses on translating net assets of </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;&nbsp;foreign operations, net of hedges and tax</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(62)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(62)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(62)</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net gains on derivatives designated </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;&nbsp;as cash flow hedges, net of tax</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">43</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">43</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">46</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net actuarial losses on defined benefits plans, net of tax</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(20)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(20)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(20)</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Total comprehensive income (loss)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">74</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(39)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">35</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">35</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Common share dividends</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Preferred share dividends</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Changes in non-controlling interests in </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;TransAlta Renewables</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">176</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">164</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Distributions paid, and payable, </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;to non-controlling interests</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(41)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(41)</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 6pt/normal Whitney Book; margin: 0; text-align: left">&nbsp;</P>
        <P STYLE="font: 6pt/normal Whitney Book; margin: 0; text-align: left">Common shares issued</P></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">18</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">18</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">18</FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>Balance, March 31, 2016</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>3,093</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>942</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>9</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>(980)</B></FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>314</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>3,378</B></FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>1,164</B></FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><B>4,542</B></FONT></TD>
    <TD STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" 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">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><I>See accompanying notes.</I></FONT></TD>
    <TD NOWRAP COLSPAN="3" 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 COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" 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 COLSPAN="2" STYLE="text-align: justify; line-height: 18pt; font-size: 8pt">&nbsp;</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"><FONT STYLE="font: 6pt Whitney Book">3 months ended March 31, 2015</FONT></TD>
    <TD NOWRAP COLSPAN="22" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><I>Unaudited</I></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Common shares</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Preferred shares</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Contributed </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">surplus</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Deficit</FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><I>(Restated)*</I></FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Accumulated other </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">comprehensive </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">income (loss)</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Attributable to </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">shareholders</FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><I>(Restated)*</I></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Attributable to </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">non-controlling </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">interests</FONT></TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Total</FONT><BR>
<FONT STYLE="font: 6pt Whitney Book"><I>(Restated)*</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Balance, Dec. 31, 2014</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">2,999</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">942</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">9</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(770)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">104</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,284</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">594</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,878</FONT></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"><FONT STYLE="font: 6pt Whitney Book">Net earnings (loss)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(28)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(28)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">14</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(14)</FONT></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"><FONT STYLE="font: 6pt Whitney Book">Other comprehensive income (loss):</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net gains on translating net assets of </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;foreign operations, net of hedges and tax</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">46</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">46</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">46</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net gains on derivatives designated </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;as cash flow hedges, net of tax</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">76</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">76</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">79</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Net actuarial losses on defined benefits plans, net of tax</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(14)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(14)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(14)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Total comprehensive income (loss)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(28)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">108</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">80</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">17</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">97</FONT></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"><FONT STYLE="font: 6pt Whitney Book">Common share dividends</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(50)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(50)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(50)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">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: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(12)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Distributions paid, and payable, </FONT><BR>
<FONT STYLE="font: 6pt Whitney Book">&nbsp;&nbsp;to non-controlling interests</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(20)</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(20)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Common shares issued</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">20</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">20</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">-</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">20</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">Balance, March 31, 2015</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,019</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">942</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">9</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">(860)</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">212</FONT></TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,322</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">591</FONT></TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book">3,913</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: center; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><I>* See Note 2(A) for prior period restatements.</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="24" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; line-height: 18pt"><FONT STYLE="font: 6pt Whitney Book"><I>See accompanying notes.</I></FONT></TD></TR>
</TABLE>


<P STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
</TABLE>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<!-- Field: Page; Sequence: 5 -->
    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: right; width: 100%"><P STYLE="font: 7pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; text-align: right"><FONT STYLE="font-size: 6pt">transalta
corporation/Q1 2016 </FONT><B>F5</B></P>


</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">TransAlta Corporation</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Condensed Consolidated Statements of Cash Flows</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><I>(in millions of Canadian dollars)</I></P>

<P STYLE="font: 9pt/12pt Whitney Book; 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="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>Unaudited</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Operating activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings (loss)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Depreciation and amortization </FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;136 </B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;147 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Accretion of provisions </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Decommissioning and restoration costs settled </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax expense (recovery) <I>(Note 5)</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Unrealized (gains) losses from risk management activities </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Unrealized foreign exchange losses</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Provisions </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other non-cash items</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash flow from operations before changes in working capital</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;181 </B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;202 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Change in non-cash operating working capital balances</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;94 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(49)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash flow from operating activities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;275 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;153 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Investing activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Additions to property, plant, and equipment <I>(Note 9)</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(85)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(124)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Additions to intangibles<I> </I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Proceeds on sale of property, plant, and equipment<I> </I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Realized gains (losses) on financial instruments</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net increase in collateral paid to counterparties </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Decrease in finance lease receivable<I> </I></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 </B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Change in non-cash investing working capital balances</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash flow used in investing activities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(67)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(143)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Financing activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net increase (decrease) in borrowings under credit facilities<I> (Note 10)</I></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(315)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;583 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Repayment of long-term debt </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(633)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Issuance of long-term debt <I>(Note 10)</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dividends paid on common shares<I> (Note 11)</I></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(30)</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dividends paid on preferred shares <I>(Note 12)</I></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net proceeds on sale of non-controlling interest in subsidiary <I>(Note 3)</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;162 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Realized gains on financial instruments</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Distributions paid to subsidiaries' non-controlling interests <I>(Note 6)</I></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Decrease in finance lease obligation</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash flow from (used in) financing activities</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(230)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </FONT></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"><FONT STYLE="font-family: Whitney Book"><B>Cash flow from (used in) operating, investing, and financing activities</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22)</B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Effect of translation on foreign currency cash</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Increase (decrease) in cash and cash equivalents</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24)</B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Cash and cash equivalents, beginning of period</B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54 </B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43 </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Cash and cash equivalents, end of period</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30 </B></FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash income taxes paid </FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8 </B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash interest paid </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21 </B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41 </FONT></TD></TR>
<TR>
    <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="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>See accompanying notes.</I></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Notes to Condensed Consolidated Financial Statements</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">(Unaudited)</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><I>(Tabular amounts in millions of Canadian dollars, except
as otherwise noted)</I></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">1. Accounting Policies</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Basis of Preparation</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">These unaudited interim condensed consolidated financial
statements have been prepared in accordance with International Accounting Standard (&#8220;IAS&#8221;) 34 <I>Interim Financial
Reporting</I> using the same accounting policies as those used in TransAlta Corporation&#8217;s (&#8220;TransAlta&#8221; or the
&#8220;Corporation&#8221;) most recent annual consolidated financial statements, except as outlined in<BR>
<I>Note 2(A).</I> These unaudited interim condensed consolidated financial statements do not include all of the disclosures included
in the Corporation&#8217;s annual consolidated financial statements. Accordingly, they should be read in conjunction with the Corporation&#8217;s
most recent annual consolidated financial statements which are available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The unaudited interim condensed consolidated financial statements
include the accounts of the Corporation and the subsidiaries that it controls.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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&#8217;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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">These unaudited interim condensed consolidated financial
statements were authorized for issue by the Audit Committee on behalf of the Board of Directors on May 2, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Use of Estimates and Significant Judgments</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The preparation of these unaudited interim condensed consolidated
financial statements in accordance with IAS 34 requires management to use judgment and make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues, and expenses, and disclosures of contingent assets and liabilities. 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 <I>Note 2(Z)</I> of the Corporation&#8217;s most recent annual consolidated financial statements for information regarding
judgments and estimates. An additional judgment applied in the first quarter of 2016 with respect to operating and reportable
segments is described in <I>Note 2(A).</I></P>

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corporation/Q1 2016 </FONT><B>F7</B></P>



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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">2. Significant Accounting Policies</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Current Accounting Changes</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">I. Operating and Reportable Segments</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Beginning this quarter, the Corporation has chosen to disaggregate
presentation of the previous Gas reportable segment into its two operating segments; Canadian Gas and Australian Gas. Previously
included legacy costs of the non-operating U.S. Gas function have been reallocated to U.S. Coal to align with management&#8217;s
internal monitoring practices. Comparative segmented results for 2015 have been restated to align with separate reporting of the
two segments and the reallocation of the non-operating costs.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">II. Restatement of a Prior Quarter</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the fourth quarter of 2015, the Corporation restated
the statement of earnings of the first quarter of 2015, to increase<BR>
deferred tax expense by $47 million. As a result, net earnings attributable to common shareholders of the first quarter of 2015
has decreased from $7 million to a net loss of $40 million. The adjustment is due to the correction of the tax basis of an internally
transferred asset as part of the reorganization of companies giving effect to the sale of an economic interest in Australian assets
to TransAlta Renewables Inc. (&#8220;TransAlta Renewables&#8221;), which closed during the second quarter of 2015. Comparative
information of the first quarter of 2015 presented in this document has been adjusted accordingly.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Future Accounting Changes</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Accounting standards that have been previously issued by
the International Accounting Standards Board (&#8220;IASB&#8221;) but are not yet effective, and have not been applied by the Corporation
include IFRS 9 <I>Financial Instruments</I>, IFRS 15 <I>Revenue from Contracts with Customers, </I>and IFRS 16 <I>Leases</I>. Refer
to <I>Note 3</I> of the Corporation&#8217;s most recent annual consolidated financial statements for information regarding the
requirements of IFRS 9, IFRS 15, and IFRS 16.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">3. Significant Events</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/11.5pt Archer Book; margin: 0; text-align: left">Investment in Sarnia Cogeneration Plant, Le Nordais
Wind Farm, and Ragged Chute Hydro Facility by TransAlta Renewables</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Jan. 6, 2016, TransAlta Renewables completed its investment
in an economic interest based on the cash flows of the Corporation&#8217;s Sarnia cogeneration plant, Le Nordais wind farm, and
Ragged Chute hydro facility (the &#8220;Canadian Assets&#8221;) for a combined value of approximately $540 million. The Canadian
Assets consist of approximately 611 MW of highly contracted power generation assets located in Ontario and Quebec. The transaction
was originally announced on Nov. 23, 2015. The Corporation will continue to own, manage, and operate the Canadian Assets.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As consideration, TransAlta Renewables provided to the Corporation
$173 million in cash, issued 15,640,583 common shares with an aggregate value of $152 million, and issued a $215 million convertible
unsecured subordinated debenture. <FONT STYLE="color: black">The debenture issued by TransAlta Renewables to the Corporation is
on an interest-only basis at a coupon of 4.5 per cent per annum payable semi-annually in arrears on June 30th and December 31st
and will mature on Dec. 31, 2020. On the maturity date, the Corporation will have the right, at its sole option, to convert the
outstanding principal amount of the debenture, in whole or in part, into common shares of TransAlta Renewables at a conversion
price of $13.16 per common share, being a </FONT><BR>
<FONT STYLE="color: black">35 per cent premium to the offering price on the closing date of the investment in the Canadian Assets.
If TransAlta does not exercise its conversion option, TransAlta Renewables may satisfy the principal obligation through issuance
of common shares with a unit value corresponding to 95 per cent of its then-current common share value.</FONT></P>

<P STYLE="color: red; font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">TransAlta Renewables funded the cash proceeds through the
public issuance of 17,692,750 subscription receipts at a price of $9.75 per subscription receipt. Upon the closing of the transaction,
each holder of subscription receipts received one common share of TransAlta Renewables and a cash dividend equivalent payment of
$0.07 for each subscription receipt held. As a result, TransAlta Renewables issued 17,692,750 common shares and paid a total dividend
equivalent of $1 million. Share issuance costs amounted to $8 million, net of $2 million income tax recovery. On Jan. 6, 2016,
TransAlta Renewables declared a dividend increase of 5 per cent.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">4. Net Interest Expense</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The components of net interest expense are as follows:</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: 75%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Interest on debt</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>60</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">57</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Capitalized interest</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(3)</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(3)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Interest on finance lease obligations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Accretion of provisions</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>6</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net interest expense</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>64</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">60</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: bold 14pt/14pt Archer Book; margin: 0; text-align: left">5. Income Taxes</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The components of income tax expense (recovery) are as follows:</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: 75%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(Restated)*</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current 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-family: Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Adjustments in respect of current income tax of prior periods</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(1)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax recovery related to the origination and </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;reversal of temporary differences</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(3)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax expense related to temporary difference on investment in </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;subsidiary<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">55</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax expense resulting from changes in tax rates or laws<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax recovery arising from the writedown of deferred income tax assets<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(23)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(15)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Income tax expense (recovery)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(18)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">43</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>* See Note 2(A) for prior period restatements.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 3pt/normal Courier New, Courier, Monospace; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(1) In order to give
effect to the sale of an economic interest in Australian assets to TransAlta Renewables, a reorganization of certain TransAlta
subsidiaries was completed. The reorganization resulted in the recognition of a $55 million deferred tax liability on TransAlta&#8217;s
investment in a subsidiary. The deferred tax liability had not been recognized previously, as prior to the reorganization, the
taxable temporary difference was not expected to reverse in the foreseeable future.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) Impact of increase
in New Brunswick corporate income tax rate from 12 per cent to 14 per cent, enacted Feb. 3, 2016.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(3) During the three
months ended March 31, 2016, the Corporation reversed a previous writedown of deferred income tax assets of $23 million (2015 -
$15 million) of which $10 million represented an adjustment in respect of deferred income tax of prior periods. The remaining deferred
income tax assets mainly relate to the tax benefits of losses associated with the Corporation&#8217;s directly owned U.S. operations.
The Corporation had written these assets off as it was no longer considered probable that sufficient future taxable income would
be available from the Corporation&#8217;s directly owned U.S. operations to utilize the underlying tax losses, due to reduced price
growth expectations. Recognized other comprehensive income during the period has given rise to taxable temporary differences, which
forms the primary basis for utilization of some of the tax losses and the reversal of the writedown.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Presented in the Condensed Consolidated Statements of Earnings
as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 8pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="width: 76%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(Restated)*</I></FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current 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-family: Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">6</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Deferred income tax expense (recovery)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(23)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">37</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Income tax expense (recovery)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(18)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">43</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>* See Note 2(A) for prior period restatements.</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 2pt/150% Arial, Helvetica, Sans-Serif; margin: 0 0 6pt; text-align: left">&nbsp;</P>


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corporation/Q1 2016 </FONT><B>F9</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">6. Non-Controlling Interests</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Summarized financial information relating to subsidiaries
with significant non-controlling interests is as follows:</P>

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

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. TransAlta Renewables</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Amounts attributable to the non-controlling interests include
the 17 per cent non-controlling interest in its Kent Hills wind farm.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation&#8217;s share of ownership and equity participation
were as follows over the current and comparative periods:</P>

<P STYLE="font: 9pt/12pt 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: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Period</B></FONT></TD>
    <TD NOWRAP STYLE="width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 5%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD STYLE="width: 21%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Ownership and voting rights percentage</B></FONT></TD>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Equity participation </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>percentage</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">April 29, 2014 to May 6, 2015</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">70.3</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">70.3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">May 7, 2015 to Nov. 25, 2015</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">76.1</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">72.8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Nov. 26, 2015 to Jan. 5, 2016</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">66.6</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">62.0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Jan. 6, 2016 and thereafter</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">64.0</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">59.8</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As the Class B shares in the capital of TransAlta Renewables
issued to the Corporation were determined to constitute financial liabilities of TransAlta Renewables and do not participate in
earnings until commissioning of South Hedland, they are excluded from the allocation of equity and earnings.</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: 72%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Revenues</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>68</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">68</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings (loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(35)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">21</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total comprehensive income (loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(36)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">21</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Amounts attributable to the non-controlling interests:</FONT></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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings (loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(14)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total comprehensive income (loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(14)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Distributions paid to non-controlling interests</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>20</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">8</FONT></TD></TR>
</TABLE>
<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: 73%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>As at</B></FONT></TD>
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>March 31, 2016</B></FONT></TD>
    <TD STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dec. 31, 2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>86</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">74</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,754</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3,262</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(183)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(190)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(1,405)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(1,120)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total equity</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(2,252)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(2,026)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Equity attributable to non-controlling interests</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(927)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(787)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Non-controlling interests share (per cent)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>40.2</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">38.0</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. TransAlta Cogeneration L.P.</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: 72%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="width: 15%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Revenues</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>77</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">75</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>21</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">15</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total comprehensive income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>27</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">19</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Amounts attributable to the non-controlling interest:</FONT></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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net earnings</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>11</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total comprehensive income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>14</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Distributions paid to the non-controlling interest</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>19</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">12</FONT></TD></TR>
</TABLE>
<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: 73%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>As at</B></FONT></TD>
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>March 31, 2016</B></FONT></TD>
    <TD STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dec. 31, 2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>80</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">82</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>516</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">535</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(77)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(75)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(42)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(54)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total equity</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(477)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(488)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Equity attributable to the non-controlling interest</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(237)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(242)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Non-controlling interest share (per cent)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>49.99</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">49.99</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"><B>&nbsp;</B></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">7. Financial Instruments</P>

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

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Financial Assets and Liabilities &#8211; Measurement</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Financial assets and financial liabilities are measured
on an ongoing basis at cost, fair value, or amortized cost.</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Fair Value of Financial Instruments</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">I. Level I, II, and III Fair Value Measurements</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Level I, II, and III classifications in the fair value
hierarchy utilized by the Corporation are defined below. The fair value measurement of a financial instrument is included in only
one of the three levels, the determination of which is based on the lowest level input that is significant to the derivation of
the fair value.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">a. Level I</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Fair values are determined using inputs that are quoted
prices (unadjusted) in active markets for identical assets or liabilities that the Corporation has the ability to access at the
measurement date. In determining Level I fair values, the Corporation uses quoted prices for identically traded commodities obtained
from active exchanges such as the New York Mercantile Exchange.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">b. Level II</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Fair values are determined, directly or indirectly, using
inputs that are observable for the asset or liability.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016 </FONT><B>F11</B></P>


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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation&#8217;s commodity risk management Level
II financial instruments include 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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In determining Level II fair values of other risk management
assets and liabilities and long-term debt measured and carried at fair value, the Corporation uses observable inputs other than
unadjusted quoted prices that are observable for the asset or liability, such as interest rate yield curves 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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">c. Level III</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Fair values are determined using inputs for the assets or
liabilities that are not readily observable.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><BR>
The Corporation 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
non-standard deals and structured products, and/or volatilities and correlations between products derived from historical prices.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation also has commodity contracts with terms
that extend beyond a liquid trading period. As forward market prices 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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has a Commodity Exposure Management Policy
(the &#8220;Policy&#8221;), which governs both the commodity transactions undertaken in its proprietary trading business and those
undertaken to manage commodity price exposures in its generation business. 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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Methodologies and procedures regarding commodity risk management
Level III fair value measurements are determined by the Corporation&#8217;s risk management department. Level III fair values are
calculated within the Corporation&#8217;s energy trading risk management system based on underlying contractual data as well as
observable and non-observable inputs. Development of<BR>
non-observable inputs requires the use of judgment. To ensure reasonability, system-generated Level III fair value measurements
are reviewed and validated by the risk management and finance departments. 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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Information on risk management contracts or groups of risk
management contracts that are included in Level III measurements and the related unobservable inputs and sensitivities, is as follows,
and excludes the effects on fair value of observable inputs such as liquidity and credit discount (described as &#8220;base fair
values&#8221;), as well as inception gains or losses.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Sensitivity ranges for the base fair values are determined
using reasonably possible alternative assumptions for the key unobservable inputs, which may include forward commodity prices,
commodity volatilities and correlations, delivery volumes, and shapes.</P>

<P STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>


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<P STYLE="font: 8pt/18pt 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="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>As at</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>March 31, 2016</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dec. 31, 2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 38%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Description</B></FONT></TD>
    <TD NOWRAP STYLE="width: 18%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Base fair value</B></FONT></TD>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Sensitivity</B></FONT></TD>
    <TD NOWRAP STYLE="width: 18%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Base fair value</FONT></TD>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Sensitivity</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term power sale - U.S.</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>836</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+114</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>863</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+125</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-177</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-186</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term power sale - Alberta</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(5)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+11</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(13)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+13</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-9</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-7</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Unit contingent power purchases</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(47)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+6</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(70)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+9</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-4</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-8</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Structured products - Eastern U.S.</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>34</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+9</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>18</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+6</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-9</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Hydro slice products - Western U.S.</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(8)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+1</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(6)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+1</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-1</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Others</FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+2</B></FONT></TD>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>+2</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-3</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-2</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">i. Long-Term Power Sale - U.S.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has a long-term fixed price power sale contract
in the U.S. for delivery of power at the following capacity levels: 280 MW through Nov. 30, 2016, 380 MW through Dec. 31, 2024,
and 300 MW through Dec. 31, 2025. The contract is designated as an all-in-one cash flow hedge.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For periods beyond 2017, market forward power prices are
not readily observable. For these periods, fundamental-based forecasts and market indications have been used to determine proxies
for base, high, and low power price scenarios. The base price forecast has been developed by averaging external fundamental based
forecasts (providers are independent and widely accepted as industry experts for scenario and planning views). Forward power price
ranges per MWh used in determining the Level III base fair value at March 31, 2016 are US$28 - US$45 (Dec. 31, 2015 - US$28 - US$45).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The contract is denominated in US dollars. With the weakening
of the US dollar relative to the Canadian dollar from<BR>
Dec. 31, 2015 to March 31, 2016, the base fair value and the sensitivity values have decreased by approximately<BR>
$46 million and $10 million, respectively, as a result of the currency movement.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">ii. Long-Term Power Sale - Alberta</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has a long-term 12.5 MW fixed price power
sale contract (monthly shaped) in the Alberta market through December 2024. The contract is accounted for as held for trading.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For periods beyond 2022, market forward power prices are
not readily observable. For these periods, fundamental-based price forecasts and market indications have been used as proxies to
determine base, high, and low power price scenarios. The base scenario uses the most recent price view from an independent external
forecasting service that is accepted within industry as an expert in the Alberta market. Forward power price ranges per MWh used
in determining the Level III base fair value at March 31, 2016 are $84 - $96 (Dec. 31, 2015 - $86 - $93).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016 </FONT><B>F13</B></P>



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<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">iii. Unit Contingent Power Purchases</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Under the unit contingent power purchase agreements the
Corporation has agreed to purchase power contingent upon the actual generation of specific units owned and operated by third parties.
Under these types of agreements, the purchaser pays the supplier an agreed upon fixed price per MWh of output multiplied by the
pro rata share of actual unit production (nil if a plant outage occurs). The contracts are accounted for as held for trading.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The key unobservable inputs used in the valuations are delivered
volume expectations and hourly shapes of production. Hourly shaping of the production will result in realized prices that may be
at a discount (or premium) relative to the average settled power price. Reasonably possible alternative inputs were used to determine
sensitivity on the fair value measurements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In particular, a one standard deviation movement upward
and downward in the volumetric and price discount rates was assessed. This analysis is based on historical production data of the
generation units for available history. Price and volumetric discount ranges per MWh used in the Level III base fair value measurement
at March 31, 2016 are 0 per cent to 2.8 per cent (Dec. 31, 2015 - 0 per cent to 2.8 per cent) and 1.7 per cent to 7.4 per cent
(Dec. 31, 2015 &#8211; 1.7 per cent to 7.4 per cent), respectively.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">iv. Structured Products - Eastern U.S.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has fixed priced power and heat rate contracts
in the eastern United States. Under the fixed priced power contracts the Corporation has agreed to buy or sell power at non-liquid
locations, or during non-standard hours. The Corporation has also bought and sold heat rate contracts at both liquid and non-liquid
locations. Under a heat rate contract, the buyer has the right to purchase power at times when the market heat rate is higher than
the contractual heat rate.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The key unobservable inputs in the valuation of the fixed
priced power contracts are market forward spreads and non-standard shape factors. A historical regression analysis has been performed
to model the spreads between non-liquid and liquid hubs. The non-standard shape factors have been determined using the historical
data. Basis relationship and non-standard shape factors used in the Level III base fair value measurement at March 31, 2016 are
82 per cent to 129 per cent and 65 per cent to 110 per cent (Dec. 31, 2015 &#8211; 85 per cent to 116 per cent and 65 per cent
to 109 per cent), respectively.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The key unobservable inputs in the valuation of the heat
rate contracts are implied volatilities and correlations. Implied volatilities and correlations used in the Level III base fair
value measurement at March 31, 2016 are 18 per cent to 52 per cent and 39 per cent to 80 per cent (Dec. 31, 2015 &#8211; 18 per
cent to 71 per cent and 39 per cent to 80 per cent), respectively.</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">v. Hydro Slice Products &#8211; Western U.S.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has agreed to purchase power contingent
upon the actual generation of specific hydro units owned and operated by third parties. Under these types of agreements, the purchaser
pays the supplier an agreed upon fixed capacity payment. The contracts are accounted for as held for trading.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The key unobservable inputs used in the valuations are delivered
volume expectations. Reasonably possible alternative inputs were used to determine sensitivity on the fair value measurements.
This analysis is based on historical production of the generation units for available history. Volumes used in the Level III base
fair value measurement at March 31, 2016 are within the 50<SUP>th</SUP> percentile of the historical production (Dec. 31, 2015
&#8211; 50<SUP>th</SUP> percentile).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">II. Commodity Risk Management Assets and Liabilities&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Commodity risk management assets and liabilities include
risk management assets and liabilities that are used in the energy marketing and generation businesses 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 these businesses.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The following tables summarize the key factors impacting
the fair value of the commodity risk management assets and liabilities by classification level during the three months ended March
31, 2016 and 2015, respectively:</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 COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Hedges</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Non-Hedges</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 36%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level I</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level II</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level III</B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level I</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level II</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level III</B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level I</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level II</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level III</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left">Net risk management assets</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 0.5in">(liabilities) at Dec. 31, 2015</P></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(58)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">640</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">128</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(98)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">70</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">542</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-family: Whitney Book">Changes attributable to:</FONT></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="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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">Market price changes on existing</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">contracts</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>30</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>66</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>34</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(22)</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>64</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>44</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">Market price changes on new</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">contracts</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Contracts settled</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(13)</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(82)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>65</B></FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(78)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>52</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Change in foreign exchange rates</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(68)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(66)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net risk management assets </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;(liabilities) at March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(19)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>625</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>79</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(49)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>60</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>576</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Additional Level III information:</B></FONT></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="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="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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Losses recognized in OCI</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(2)</B></FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(2)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left">Total gains (losses) included in</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 0.5in">earnings before income taxes</P></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>13</B></FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(16)</B></FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(3)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Unrealized gains included in earnings </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;before income taxes relating to net </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;liabilities held at March 31, 2016</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>49</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>49</B></FONT></TD></TR>
</TABLE>
<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 COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Hedges</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Non-Hedges</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 34%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level I</FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level II</FONT></TD>
    <TD NOWRAP STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level III</FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level I</FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level II</FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level III</FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level I</FONT></TD>
    <TD NOWRAP STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level II</FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Level III</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-family: Whitney Book">Net risk management assets (liabilities) at </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Dec. 31, 2014</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(59)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">314</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">180</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(97)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">121</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">217</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-family: Whitney Book">Changes attributable to:</FONT></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="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="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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">Market price changes on existing</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 8pt">contracts</P></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">17</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">69</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">11</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(9)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">28</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">60</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Market price changes on new contracts</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(5)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(2)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(5)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(2)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Contracts settled</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">5</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(7)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(79)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">42</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(74)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">35</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Change in foreign exchange rates</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(6)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">47</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">9</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(4)</FONT></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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">43</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net risk management assets </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;(liabilities) at March 31, 2015</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(43)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">423</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">116</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(70)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">73</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">353</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Additional Level III information:</FONT></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="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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Gains recognized in OCI</FONT></TD>
    <TD 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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">116</FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">116</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total gains (losses) included in earnings </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;before income taxes</FONT></TD>
    <TD 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; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(15)</FONT></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="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(8)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left">Unrealized gains included in earnings</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 0.5in">before income taxes relating to net</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: left; text-indent: 0.5in">liabilities held at March 31, 2015</P></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">27</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">27</FONT></TD></TR>
</TABLE>
<P STYLE="font: 3pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>


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    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%"><P STYLE="font: 7pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; text-align: right"><FONT STYLE="font-size: 6pt">transalta
corporation/Q1 2016 </FONT><B>F15</B></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->


<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Significant changes in commodity net risk management assets
(liabilities) during the three months ended March 31, 2016 are primarily attributable to the following factors:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify">increases in value related to market movements for power contracts in Alberta (Level II hedges);</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify">changes in value of the long-term power sale contract (Level III hedge) as discussed in the preceding
section (B)(I)(c)(i) of this note;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify">maturities and increases in value related to market movements for power contracts in the Pacific
Northwest<BR>
(Level II non-hedge); and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify">settlement and maturities of unit contingent power purchases described in the section (B)(I)(c)(iii)
of this note<BR>
(Level III non-hedges)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"></TD></TR></TABLE>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">III. Other Risk Management Assets and Liabilities</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Other risk management assets and liabilities primarily include
risk management assets and liabilities that are used in hedging<BR>
non-energy marketing transactions, such as interest rates, the net investment in foreign operations, and other foreign currency
risks. Changes in other risk management assets and liabilities related to hedge positions are reflected within net earnings when
such transactions have settled during the period or when ineffectiveness exists in the hedging relationship.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Other risk management assets and liabilities with a total
net asset fair value of $147 million as at March 31, 2016<BR>
(Dec. 31, 2015 - $214 million net asset) are classified as Level II fair value measurements. The significant changes in other net
risk management assets during the period ended March 31, 2016 are primarily attributable to the weakening of the US dollar relative
to the Canadian dollar on the Corporation&#8217;s foreign currency hedges.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">IV. Other Financial Assets and Liabilities</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The fair value of financial assets and liabilities measured
at other than fair value is as follows:</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; text-align: center; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Fair value</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total carrying value</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level I</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level II</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Level III</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;Total </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 59%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8.05pt"><FONT STYLE="font-family: Whitney Book"><B>Long-term debt<SUP>(1)</SUP> - March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;3,488 </B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;3,488 </B></FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;&nbsp;&nbsp;3,886 </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><FONT STYLE="font-family: Whitney Book">Long-term debt<SUP>(1)</SUP> - Dec. 31, 2015</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,067 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,067 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,344 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="6" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(1) Includes current portion and excludes $65 million (Dec. 31, 2015 - $69 million) of debt measured and carried at fair value.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The fair values of the Corporation&#8217;s debentures and
senior notes are determined using prices observed in secondary markets.<BR>
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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The carrying amount of other short-term financial assets
and liabilities (cash and cash equivalents, trade and other accounts receivable, accounts payable and accrued liabilities, and
dividends payable) approximates fair value due to the liquid nature of the asset or liability.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">C. Inception Gains and Losses</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The majority of derivatives traded by the Corporation are
based on adjusted quoted prices on an active exchange or extend beyond the time period for which exchange-based quotes are available.
The fair values of these derivatives are determined using inputs that are not readily observable. Refer to section B of this note
for fair value Level III valuation techniques used. In some instances, a difference may arise between the fair value of a financial
instrument at initial recognition (the &#8220;transaction price&#8221;) and the amount calculated through a valuation model. This
unrealized gain or loss at inception is recognized in net earnings (loss) only if the fair value of the instrument is evidenced
by a quoted market price in an active market, observable current market transactions that are substantially the same, or a valuation
technique that uses observable market inputs. Where these criteria are not met, the difference is deferred on the Condensed Consolidated
Statements of Financial Position in risk management assets or liabilities, and is recognized in net earnings (loss) over the term
of the related contract. The difference between the transaction price and the fair value determined using a valuation model, yet
to be recognized in net earnings, and a reconciliation of changes is as follows:</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="width: 30%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Unamortized net gain at beginning of period</FONT></TD>
    <TD NOWRAP STYLE="width: 2%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>202</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">188</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">New inception gains</FONT></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Change in foreign exchange rates</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(12)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">16</FONT></TD></TR>
<TR>
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Amortization recorded in net earnings during the period</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(18)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(20)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Unamortized net gain at end of period</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>174</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">185</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>


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corporation/Q1 2016 </FONT><B>F17</B></P>



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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">8. Risk Management Activities</P>

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

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Net Risk Management Assets and Liabilities</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Aggregate net risk management assets and (liabilities) are
as follows:</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&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 COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>As at March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 32%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 2%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net investment hedges</B></FONT></TD>
    <TD STYLE="width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Cash flow hedges</B></FONT></TD>
    <TD STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Fair value hedges</B></FONT></TD>
    <TD STYLE="width: 13%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Not </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>designated </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>as a hedge</B></FONT></TD>
    <TD STYLE="width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Commodity risk management</B></FONT></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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>59</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>29</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>88</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>547</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>548</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net commodity risk management assets</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>606</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>30</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>636</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Other</B></FONT></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="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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>8</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>9</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>137</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>138</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Net other risk management assets (liabilities)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>145</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(7)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>147</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <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="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total net risk management assets</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>751</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>23</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>783</B></FONT></TD></TR>
</TABLE>
<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; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">As at Dec. 31, 2015</FONT></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 COLSPAN="5" STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 24%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 13%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net </FONT><BR>
<FONT STYLE="font-family: Whitney Book">investment </FONT><BR>
<FONT STYLE="font-family: Whitney Book">hedges</FONT></TD>
    <TD STYLE="width: 9%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Cash flow hedges</FONT></TD>
    <TD STYLE="width: 11%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Fair value hedges</FONT></TD>
    <TD STYLE="width: 13%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Not </FONT><BR>
<FONT STYLE="font-family: Whitney Book">designated </FONT><BR>
<FONT STYLE="font-family: Whitney Book">as a hedge</FONT></TD>
    <TD STYLE="width: 9%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total</FONT></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"><FONT STYLE="font-family: Whitney Book">Commodity risk management</FONT></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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">31</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">57</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">88</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">551</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(27)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">524</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net commodity risk management assets</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">582</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">30</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">612</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other</FONT></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="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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Current</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(7)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">20</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(3)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">207</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">5</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(8)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">204</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Net other risk management assets (liabilities)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(7)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">227</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">5</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(11)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">214</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <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="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total net risk management assets (liabilities)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(7)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">809</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">5</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">19</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">826</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Nature and Extent of Risks Arising from Financial Instruments</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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 14(B) of the Corporation&#8217;s
most recent annual consolidated financial statements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">I. Commodity Price Risk</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Value at Risk (&#8220;VaR&#8221;) 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&#8217;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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>


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

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">a. Commodity Price Risk - Proprietary Trading</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation&#8217;s Energy Marketing Segment conducts
proprietary trading activities and uses a variety of instruments to manage risk, earn trading revenue, and gain market information.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">VaR at March 31, 2016 associated with the Corporation&#8217;s
proprietary trading activities was $3 million (Dec. 31, 2015 -<BR>
$5 million).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">b. Commodity Price Risk - Generation</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Various commodity contracts and other financial instruments
are used to manage the commodity price risk associated with the Corporation&#8217;s electricity generation, fuel purchases, emissions,
and byproducts, as considered appropriate. VaR at<BR>
March 31, 2016 associated with the Corporation&#8217;s commodity derivative instruments used in these hedging activities was<BR>
$23 million (Dec. 31, 2015 - $24 million). VaR at March 31, 2016 associated with positions and economic hedges that do not meet
hedge accounting requirements was $2 million (Dec. 31, 2015 - $1 million).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">II. Currency Rate Risk</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Corporation has exposure to various currencies, such
as the euro, the US dollar, the Japanese yen, and the Australian dollar, as a result of investments and operations in foreign jurisdictions,
the net earnings from those operations, and the acquisition of equipment and services from foreign suppliers. Further discussion
on Currency Rate Risk can be found in Note 14(B)(c) of the Corporation&#8217;s most recent annual consolidated financial statements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">III. Credit Risk</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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. The Corporation actively manages its exposure
to credit risk by assessing the ability of counterparties to fulfill their obligations under the related contracts prior to entering
into such contracts. TransAlta is exposed to minimal credit risk for Alberta Coal PPAs as receivables are substantially all secured
by letters of credit.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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.
In certain cases, the Corporation will require security instruments such as parental guarantees, letters of credit, cash collateral
or third party credit insurance to reduce overall credit risk. The following table outlines the Corporation&#8217;s maximum exposure
to credit risk without taking into account collateral held or right of set-off, including the distribution of credit ratings, as
at March 31, 2016:</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 36%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 19%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Investment grade</B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><I>(Per cent)</I></FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 21%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Non-investment grade</B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><I>(Per cent)</I></FONT></TD>
    <TD NOWRAP STYLE="width: 1%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><I>(Per cent)</I></FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>amount</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Trade and other receivables<SUP>(1)</SUP></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">89</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">11</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>100</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>457</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term finance lease receivables<SUP>(2)</SUP></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">40</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">60</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>100</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>731</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Risk management assets<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">100</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>100</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1,021</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2,209</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(1) Letters of credit and cash are the primary types of collateral held as security related to these amounts.</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="9" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(2) The Corporation has one non-investment grade customer whose outstanding balances accounted for $415 million (Dec. 31, 2015 - $446 million). Risk of significant loss arising from this counterparty has been assessed as low in the near term, but could increase to moderate in an environment of sustained low commodity prices over the mid-to long term. The Corporation's assessment takes into consideration the counterparty's financial position, external rating assessments, and how the Corporation provides its services in an area of the counterparty's lower-cost operations, and the Corporations other credit risk management practices.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt/normal Courier New, Courier, Monospace; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The maximum credit exposure to any one customer for commodity
trading operations and hedging, including the fair value of open trading, net of any collateral held, at March 31, 2016 was $45
million (Dec. 31, 2015 - $44 million).</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>


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corporation/Q1 2016 </FONT><B>F19</B></P>


</P>






</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left"><FONT STYLE="font-size: 12pt"><B>IV. Liquidity Risk&#9;</B></FONT></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left"><FONT STYLE="font-size: 12pt">&nbsp;</FONT></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left"></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Liquidity risk relates to the Corporation&#8217;s ability
to access capital to be used for proprietary trading activities, commodity hedging, capital projects, debt refinancing, and general
corporate purposes. In December 2015, Moody&#8217;s downgraded the senior unsecured rating on TransAlta&#8217;s US bonds one notch
from Baa3 to Ba1. During the first quarter of 2016, two rating agencies affirmed the Corporation&#8217;s long-term issuer rating
as investment grade, but revised their outlook to negative, from a previous stable outlook. As at March 31, 2016, TransAlta maintains
investment grade ratings from three credit rating agencies. For further details refer to Note 14(B) of the Corporation&#8217;s
most recent annual consolidated financial statements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">A maturity analysis of the Corporation&#8217;s financial
liabilities is as follows:</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: 48%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2017</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2018</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2019</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2020</B></FONT></TD>
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2021 and thereafter</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Accounts payable and accrued liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">336</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">336</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Long-term debt<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">87</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">566</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">899</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">446</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">446</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1,521</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3,965</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Commodity risk management (assets) liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(61)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(78)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(48)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(62)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(67)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(320)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(636)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other risk management (assets) liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(8)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(87)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(55)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(147)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Finance lease obligations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">12</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">14</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">13</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">9</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">7</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">24</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">79</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Interest on long-term debt and finance lease obligations<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">161</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">200</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">158</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">129</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">102</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">758</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1,508</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dividends payable</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">26</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">26</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>553</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>615</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>967</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>524</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>489</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1,983</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>5,131</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="8" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(1) Excludes impact of hedge accounting.</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="8" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><I>(2) Not recognized as a financial liability on the Condensed Consolidated Statements of Financial Position.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 3pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">C. Collateral and Contingent Features in Derivative Instruments</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Collateral is posted in the normal course of business based
on the Corporation&#8217;s senior unsecured credit rating as determined by certain major credit rating agencies. Certain of the
Corporation&#8217;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&#8217;s senior unsecured
debt falling below investment grade, the counterparties to such derivative instruments could request ongoing full collateralization.</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As at March 31, 2016, the Corporation had posted collateral
of $194 million (Dec. 31, 2015 - $220 million) in the form of letters of credit on derivative instruments in a net liability position.&nbsp;Certain
derivative agreements contain credit-risk-contingent features, which if triggered could result in the Corporation having to post
an additional $56 million (Dec. 31, 2015 - $44 million) of collateral to its counterparties.&nbsp;&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">9. Property, Plant, and Equipment</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;A reconciliation of the changes in the carrying amount
of PP&amp;E is as follows:</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 27%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Land</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Coal</B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>generation</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Gas </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>generation</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Renewable generation</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Mining property and equipment</B></FONT></TD>
    <TD STYLE="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Assets under construction</B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Capital spares and other<SUP>(1)</SUP></B></FONT></TD>
    <TD STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Total</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">As at Dec. 31, 2015</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">95</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">2,811</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">611</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">2,455</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">604</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">351</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">246</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">7,173</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Additions</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>90</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(6)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>85</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Additions - finance lease</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Disposals</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(1)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(70)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(18)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(32)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(15)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(139)</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Revisions and additions to </FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">&nbsp;&nbsp;decommissioning</FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">&nbsp;&nbsp;and restoration costs</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(14)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(19)</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Retirement of assets</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(5)</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Change in foreign exchange rates</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(1)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(24)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(6)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(20)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(4)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(7)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(65)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Transfers</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>18</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>7</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>3</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(33)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>As at March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>94</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>2,717</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>584</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>2,406</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>591</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>401</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>237</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>7,030</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="9" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(1) Includes major spare parts and stand-by equipment available, but not in service, and spare parts used for routine, preventative or planned maintenance.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 5pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 5pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 2pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">10. Credit Facilities, Long-Term Debt, and Finance Lease
Obligations</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Credit Facilities, Debt and Letters of Credit</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The amounts outstanding are as follows:</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>As at</B></FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Dec. 31, 2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 49%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Carrying value</B></FONT></TD>
    <TD NOWRAP STYLE="width: -1mm; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Face value</B></FONT></TD>
    <TD NOWRAP STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Interest<SUP>(1)</SUP></B></FONT></TD>
    <TD NOWRAP STYLE="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Carrying value</FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Face value</FONT></TD>
    <TD NOWRAP STYLE="width: 9%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Interest<SUP>(1)</SUP></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Credit facilities<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">315</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">315</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3.1%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Debentures</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1,045</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>1,051</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>6.0%</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1,044</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">1,051</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">6.0%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Senior notes<SUP>(3)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2,073</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2,074</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>5.0%</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2,221</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2,221</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4.9%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Non-recourse<SUP>(4)</SUP></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>754</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>761</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4.5%</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">766</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">773</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4.5%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Other<SUP>(5)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>79</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>79</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>8.1%</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">67</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">67</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">9.3%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,951</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,965</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4,413</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4,427</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Finance lease obligations</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>79</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">82</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4,030</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4,495</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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-family: Whitney Book">Less: current portion of long-term debt</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(87)</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(72)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Less: current portion of finance lease obligations</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(16)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(15)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total current long-term debt and finance lease obligations</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(103)</B></FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(87)</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total credit facilities, long-term debt, </B></FONT><BR>
<FONT STYLE="font-family: Whitney Book"><B>&nbsp;&nbsp;and finance lease obligations</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,927</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4,408</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(1) Interest is an average rate weighted by principal amounts outstanding before the effect of hedging.</I></FONT></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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD COLSPAN="8" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(2) Composed of bankers' acceptances and other commercial borrowings under long-term committed credit facilities.</I></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(3) US face value at March 31, 2016 - US$1.6 billion (Dec. 31, 2015 - US$1.6 billion).</I></FONT></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="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></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(4) Includes US$54 million at March 31, 2016 (Dec. 31, 2015 - US$59 million).</I></FONT></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="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></TR>
</TABLE>



<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 8pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 74%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><I>(5) Includes US$35 million at Dec. 31, 2015 (Dec. 31, 2015 - US$36 million) of tax equity financing.</I></FONT></TD>
    <TD NOWRAP STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

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corporation/Q1 2016 </FONT><B>F21</B></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the first quarter, the Corporation paid out the credit
facilities balance from a combination of cash flows from operations and net cash proceeds of $173 million received from the sale
of the economic interest of the Canadian Assets that closed Jan. 6, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Of the $2.1 billion (Dec. 31, 2015 - $2.2 billion) of committed
credit facilities, $1.5 billion (Dec. 31, 2015 - $1.3 billion) is not drawn. The Corporation is in compliance with the terms of
the credit facility and all undrawn amounts are fully available. In addition to the $1.5 billion available under the credit facilities,
TransAlta also has $30 million of available cash and cash equivalents.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The total outstanding letters of credit as at March 31,
2016 was $588 million (Dec. 31, 2015 - $575 million) with no<BR>
(Dec. 31, 2015 - nil) amounts exercised by third parties under these arrangements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">TransAlta's debt has terms and conditions, including financial
covenants, that are considered normal and customary. As at<BR>
March 31, 2016, the Corporation was in compliance with all debt covenants.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Restrictions on Non-Recourse Debt</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Non-recourse debentures of $229 million (Dec. 31, 2015 -
$230 million) issued by the Corporation&#8217;s Canadian Hydro Developers, Inc. (&#8220;CHD&#8221;) subsidiary include restrictive
covenants requiring the cash proceeds received from the sale of assets to be reinvested into similar renewable assets or to repay
the non-recourse debentures.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Other non-recourse debt of $531 million (Dec. 31, 2015 -
$536 million) is secured by certain renewable generation facilities and subject to customary financing restrictions that restrict
the Corporation&#8217;s ability to access funds generated by the facilities&#8217; operations. Certain bonds are secured by a first
ranking charge over all of the respective assets of the Corporation&#8217;s subsidiaries that issued the bonds, which includes
renewable generation facilities with total carrying amounts of $780 million at March 31, 2016 (Dec. 31, 2015 - $798 million).</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">11. Common Shares</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Issued and Outstanding</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">TransAlta is authorized to issue an unlimited number of
voting common shares without nominal or par value.</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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="background-color: white">
    <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 COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="width: 47%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Common shares </B><I>(millions)</I></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right"><B>Amount</B></P></TD>
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Common </FONT><BR>
<FONT STYLE="font-family: Whitney Book">shares </FONT><BR>
<FONT STYLE="font-family: Whitney Book"><I>(millions)</I></FONT></TD>
    <TD NOWRAP STYLE="width: 14%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 8pt/normal Whitney Book; margin: 0; text-align: right">Amount</P></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Issued and outstanding, beginning of period</FONT></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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>284.0</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,077</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">275.0</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3,001</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Issued under the dividend reinvestment </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;and optional common share purchase plan</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3.9</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>18</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2.0</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">20</FONT></TD></TR>
<TR STYLE="background-color: white">
    <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; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>287.9</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,095</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">277.0</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3,021</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Amounts receivable under </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Employee Share Purchase Plan</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>(2)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">(2)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Issued and outstanding, end of period</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>287.9</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3,093</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">277.0</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">3,019</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>

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corporation/Q1 2016</FONT></P>


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

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Dividends and Shareholder Rights Plan</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Jan. 14, 2016, the Corporation announced the resizing
of its dividend from $0.72 annually to $0.16 annually and the suspension of the Premium Dividend<SUP>TM</SUP>, Dividend Reinvestment
and Optional Common Share Purchase Plan (the &#8220;DRIP&#8221;) effective immediately. These actions were taken as part of a
plan to maximize the Corporation&#8217;s long-term financial flexibility, as well as to stop shareholder dilution relating to
the DRIP.&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Feb. 16, 2016, the Corporation declared a quarterly dividend
of $0.04 per common share, payable on April 1, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On April 21, 2016, the Corporation declared a quarterly
dividend of $0.04 per common share, payable on July 1, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On April 22, 2016, the Shareholder Rights Plan discussed
in Note 22 of the Corporation&#8217;s most recent annual consolidated financial statements was renewed for a new period of approximately
three years.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">There have been no other transactions involving common shares
between the reporting date and the date of completion of these consolidated financial statements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">C. Stock Options</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In February 2016, the Corporation granted executive officers
of the Corporation a total of 1.1 million stock options with an exercise price of $5.93 that vest after a three year period and
expire seven years after issuance.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">12. Preferred Shares</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Issued and Outstanding &#9;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left"></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On March 17, 2016, the Corporation announced that 1,824,620
of its 12.0 million Series A Cumulative Fixed Redeemable Rate Reset Preferred Shares were tendered for conversion, on a one-for-one
basis, into the Series B Cumulative Redeemable Floating Rate Preferred Shares after having taken into account all election notices.
As a result of the conversion, the Corporation has 10.2 million Series A Shares and 1.8 million Series B Shares issued and outstanding
at March 31, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Series A Shares pay fixed cumulative preferential cash
dividends on a quarterly basis, for the five-year period from and including March 31, 2016 to but excluding March 31, 2021, if,
as and when declared by the Board based on an annual fixed dividend rate of 2.709 per cent.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The Series B Shares pay quarterly floating rate cumulative
preferential cash dividends for the five-year period from and including March 31, 2016 to but excluding March 31, 2021, if, as
and when declared by the Board. The annualized dividend rate for the Series B Shares for the 3-month floating rate period from
and including March 31, 2016 to but excluding June 30, 2016 is 2.492 per cent and will reset every quarter.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Additionally, at March 31, 2016, the Corporation also had
11.0 million Series C, 9.0 million Series E, and 6.6 million Series G Cumulative Redeemable Rate Reset Preferred Shares issued
and outstanding.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

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corporation/Q1 2016 </FONT><B>F23</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Dividends</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The following table summarizes the preferred share dividends
declared within the three months ended March 31:</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">&nbsp;</TD>
    <TD STYLE="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 COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 34%; background-color: white; 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 ROWSPAN="2" STYLE="width: 18%; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Quarterly amounts </FONT><BR>
<FONT STYLE="font-family: Whitney Book">per share</FONT></TD>
    <TD NOWRAP STYLE="width: 21%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD STYLE="width: 4%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 19%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Series</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>Total</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Total</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-family: Whitney Book"><I>A</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">0.2875</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>4</B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">4</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-family: Whitney Book"><I>C</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">0.2875</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3</B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">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-family: Whitney Book"><I>E</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">0.3125</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3</B></FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">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-family: Whitney Book"><I>G</I></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">0.33125</FONT></TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2</FONT></TD></TR>
</TABLE>

<P STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></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: 56%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; border-top: Black 1pt solid"><FONT STYLE="font-family: Whitney Book"><B>Total for the period</B></FONT></TD>
    <TD STYLE="width: 21%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>12</B></FONT></TD>
    <TD STYLE="width: 4%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">12</FONT></TD></TR>
</TABLE>
<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">On April 21, 2016, the Corporation declared
a quarterly dividend of $0.16931 per share on the Series A preferred shares, $0.15490 per share on the Series B preferred shares,
$0.2875 per share on the Series C preferred shares, $0.3125 per share on the Series E preferred shares, and $0.33125 per share
on the Series G preferred shares, all payable June 30, 2016.</P>

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

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corporation/Q1 2016</FONT></P>


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

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">13. Contingencies</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">TransAlta is occasionally named as a party in various claims
and legal and regulatory 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&#8217;s favour or that such claims may not have a material
adverse effect on TransAlta. Inquiries from regulatory bodies may also arise in the normal course of business, to which the Corporation
responds as required.</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">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">14. Segment Disclosures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Reported Statement of Earnings (Loss)</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 33%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>3 months ended March 31, 2016</B></FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Canadian </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Coal</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>U.S. </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Coal</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Canadian </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Gas</B></FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Australian</B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Gas</B></FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Wind and </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Solar</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Hydro</B></FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Energy </B></FONT><BR>
<FONT STYLE="font: 7pt Whitney Book"><B>Marketing</B></FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Corporate</B></FONT></TD>
    <TD NOWRAP STYLE="width: 7%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>Total</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Revenues</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>234</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>56</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>105</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>29</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>84</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>28</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>32</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>568</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Fuel and purchased power</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>98</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>52</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>42</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>9</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>208</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Gross margin</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>136</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>4</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>63</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>24</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>75</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>26</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>32</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>360</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Operations, maintenance, and administration</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>45</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>12</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>14</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>6</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>12</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>7</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>9</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>18</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>123</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>61</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(3)</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>14</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>5</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>30</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>7</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>7</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>122</B></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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Taxes, other than income taxes</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>3</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>2</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>1</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>8</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Operating income (loss)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>27</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(6)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>34</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>13</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>31</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>11</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>22</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(25)</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>107</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Finance lease income</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>3</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>13</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>-</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>16</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Net interest expense</FONT></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="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="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; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(64)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Foreign exchange gain</FONT></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="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="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; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>(6)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Earnings before income taxes</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book"><B>53</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left">&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: 36%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">3 months ended March 31, 2015</FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">(Restated - See Note 2)</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Canadian </FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">Coal</FONT></TD>
    <TD STYLE="width: 7%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">U.S. </FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">Coal</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Canadian </FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">Gas</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Australian</FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">Gas</FONT></TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Wind</FONT></TD>
    <TD NOWRAP STYLE="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Hydro</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Energy </FONT><BR>
<FONT STYLE="font: 7pt Whitney Book">Marketing</FONT></TD>
    <TD STYLE="width: 8%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Corporate</FONT></TD>
    <TD NOWRAP STYLE="width: 5%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Total</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Revenues</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">246</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">51</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">141</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">26</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">73</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">25</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">31</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">593</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Fuel and purchased power</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">113</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">47</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">67</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">5</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">4</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">1</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">237</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Gross margin</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">133</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">4</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">74</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">21</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">69</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">24</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">31</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">356</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Operations, maintenance, and administration</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">49</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">12</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">18</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">6</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">12</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">11</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">8</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">18</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">134</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Depreciation and amortization</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">57</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">15</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">23</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">4</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">22</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">6</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">6</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">133</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Restructuring provision</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">7</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">7</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Taxes, other than income taxes</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">3</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">1</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">1</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">2</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Operating income (loss)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">17</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">(24)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">32</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">11</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">33</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">7</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">23</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">(24)</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">75</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-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Finance lease income</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">1</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">12</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">-</FONT></TD>
    <TD NOWRAP STYLE="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">13</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Net interest expense</FONT></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="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="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; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">(60)</FONT></TD></TR>
</TABLE>



<P STYLE="font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

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<TR STYLE="vertical-align: bottom; background-color: white">
    <TD NOWRAP STYLE="width: 36%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Foreign exchange gain</FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">1</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">Earnings before income taxes</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 7pt"><FONT STYLE="font: 7pt Whitney Book">29</FONT></TD></TR>
</TABLE>
<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left">&nbsp;</P>

<!-- Field: Page; Sequence: 25 -->
    <DIV STYLE="margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%"><P STYLE="font: 7pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-transform: uppercase; text-align: right"><FONT STYLE="font-size: 6pt">transalta
corporation/Q1 2016 </FONT><B>F25</B></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"></P>

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

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the three months ended March 31, 2016, coal inventory
at the Corporation&#8217;s Centralia plant was written down by<BR>
$6 million (2015 - $10 million) to its net realizable value. The writedown is included in fuel and purchased power of the U.S.
Coal Segment.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Included in revenues of the Wind and Solar Segment for the
three months ended March 31, 2016 are $7 million<BR>
(2015 - $6 million) of incentives received under a Government of Canada program in respect of power generation from qualifying
wind projects.</P>

<P STYLE="font: 8pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="background-color: yellow">&nbsp;</FONT></P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Depreciation and Amortization on the Condensed Consolidated
Statements of Cash Flows&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The reconciliation between depreciation and amortization
reported on the Condensed Consolidated Statements of Earnings (Loss) and the Condensed Consolidated Statements of Cash Flows is
presented below:</P>

<P STYLE="font: 8pt/12pt Whitney Book; 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: 68%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>3 months ended March 31</B></FONT></TD>
    <TD NOWRAP STYLE="width: 16%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">2015</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Depreciation and amortization expense on the Condensed&nbsp;&nbsp;</FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;&nbsp;Consolidated Statement of Earnings (Loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>122</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">133</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Depreciation included in fuel and purchased power</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>14</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">14</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">Depreciation and amortization expense on the Condensed </FONT><BR>
<FONT STYLE="font-family: Whitney Book">&nbsp;&nbsp;Consolidated Statements of Cash Flows</FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book"><B>136</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><FONT STYLE="font-family: Whitney Book">147</FONT></TD></TR>
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corporation/Q1 2016</FONT></P>


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<DOCUMENT>
<TYPE>EX-13.2
<SEQUENCE>3
<FILENAME>mda.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, 2016.
<TEXT>
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<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
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<TD STYLE="vertical-align: top; width: 50%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><IMG SRC="image_003.jpg"></font></td>
<TD STYLE="vertical-align: bottom; text-align: right; width: 50%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline">TRANSALTA CORPORATION</font> </font>

<div style="MARGIN-LEFT: 0pt; DISPLAY: block; MARGIN-RIGHT: 0pt; TEXT-INDENT: 0pt" align="right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline">FIRST QUARTER REPORT FOR 2016</font></font></div>
</td>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Management&rsquo;s Discussion and Analysis</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">This Management&rsquo;s Discussion and Analysis (&ldquo;MD&amp;A&rdquo;)
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/12pt 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">This MD&amp;A should be read in conjunction with the unaudited
interim condensed consolidated financial statements of TransAlta Corporation as at and for the three months ended March 31, 2016
and 2015, and should also be read in conjunction with the audited annual consolidated financial statements and MD&amp;A contained
within our 2015 Annual Integrated Report. In this MD&amp;A, unless the context otherwise requires, &ldquo;we&rdquo;, &ldquo;our&rdquo;,
&ldquo;us&rdquo;, the &ldquo;Corporation&rdquo;, and &ldquo;TransAlta&rdquo; refers to TransAlta Corporation and its subsidiaries.
Our condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(&ldquo;IFRS&rdquo;) International Accounting Standards (&ldquo;<I>IAS&rdquo;) 34 Interim</I> <I>Financial Reporting</I> for Canadian
publically accountable enterprises as issued by the International Accounting Standards Board (&ldquo;IASB&rdquo;) and in effect
at March 31, 2016. All tabular amounts in the following discussion are in millions of Canadian dollars unless otherwise noted.
This MD&amp;A is dated May 2, 2016. Additional information respecting TransAlta, including its Annual Information Form, is available
on SEDAR at <B>www.sedar.com</B>, on EDGAR at <B>www.sec.gov</B>, and on our website at <B>www.transalta.com</B>. Information on
or connected to our website is not incorporated by reference herein.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Additional IFRS Measures and Non-IFRS Measures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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 gross margin and operating income in our Condensed Consolidated Statements of
Earnings (Loss) for the three months ended March 31, 2016, and 2015. Presenting these line items provides management and investors
with a measurement of ongoing operating performance that is readily comparable from period to period.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We evaluate our performance and the performance of our business
segments using a variety of measures. Certain of the financial measures discussed 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 measures may not be comparable to similar measures presented by other issuers and should not be
considered in isolation or as a substitute for measures prepared in accordance with IFRS. See the Comparable Funds from Operations
and Comparable Free Cash Flow, Discussion of Segmented Comparable Results, and Earnings and Other Measures on a Comparable Basis
sections of this MD&amp;A for additional information.</P>


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corporation/Q1 2016</FONT> <B>M1</B></P>



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<P STYLE="font: 14pt/150% Times New Roman, Times, Serif; margin: 0; text-align: justify">Forward-Looking Statements</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">This MD&amp;A, the
documents incorporated herein by reference, and other reports and filings made with securities regulatory authorities include forward-looking
statements or information (collectively referred to herein as &ldquo;forward-looking statements&rdquo;) within the meaning of applicable
securities legislation. Forward-looking statements, including the 2016 Financial Outlook section of this MD&amp;A, are presented
for general information purposes only and not as specific investment advice. All forward-looking statements are based on our beliefs
as well as assumptions based on information available at the time the assumptions were made and on management&rsquo;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 &ldquo;may&rdquo;, &ldquo;will&rdquo;, &ldquo;believe&rdquo;, &ldquo;expect&rdquo;,
&ldquo;anticipate&rdquo;, &ldquo;intend&rdquo;, &ldquo;plan&rdquo;, &ldquo;project&rdquo;, &ldquo;forecast&rdquo;, &ldquo;foresee&rdquo;,
&ldquo;potential&rdquo;, &ldquo;enable&rdquo;, &ldquo;continue&rdquo;, 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In particular, this MD&amp;A contains forward-looking statements
pertaining to our business and anticipated future financial performance; our success in executing on our growth projects; the timing
of the construction and commissioning of projects under development, including major projects such as the South Hedland power project,
and their attendant costs; spending on growth and sustaining capital and productivity projects; expectations in terms of the cost
of operations, capital spending, and maintenance, and the variability of those costs; expected decommissioning costs; the impact
of certain hedges on future reported earnings and cash flows, including future reversals of unrealized gains or losses; expectations
related to future earnings and cash flow from operating and contracting activities (including estimates of full-year 2016 comparable
earnings before interest, taxes, depreciation, and amortization (&ldquo;EBITDA&rdquo;), comparable funds from operations (&ldquo;FFO&rdquo;),
comparable free cash flow (&ldquo;FCF&rdquo;), and expected sustaining capital expenditures for 2016); expectations in respect
of financial ratios and targets (including comparable FFO before interest to adjusted interest coverage, adjusted comparable FFO
to adjusted net debt, and adjusted net debt to comparable EBITDA); the Corporation&rsquo;s plans and strategies relating to repositioning
its capital structure and strengthening its balance sheet and the debt reductions that are expected to occur in 2016 and beyond;
expected governmental regulatory regimes and legislation (including the Government of Alberta&rsquo;s Climate Leadership Plan and
the Government of Ontario&rsquo;s greenhouse gas cap and trade program) and their expected impact on TransAlta and the timing of
the implementation of such regimes and regulations, as well as the cost of complying with resulting regulations and laws; the outcome
of negotiations with the Government of Alberta in relation to coal-fired generation transition under the Climate Leadership Plan;
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; the impact of 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; our trading strategies and the risk involved in these strategies; estimates of future tax rates, future
tax expense, and the adequacy of tax provisions; accounting estimates; our expectations regarding the outcome of existing or potential
legal and contractual claims, regulatory investigations, and disputes; our expectations on dividend payments; 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 US dollar, the Australian dollar, and other currencies in which we do business; the monitoring
of our exposure to liquidity risk; expectations regarding the impact of the slowdown in the oil and gas sector; expectations in
respect of the global economic environment and growing scrutiny by investors relating to sustainability performance; our credit
practices; expected cost savings following the implementation of our efficiency and productivity initiatives; the estimated contribution
of Energy Marketing activities to gross margin; expectations regarding our continued ownership of TransAlta Renewables Inc. (&ldquo;TransAlta
Renewables&rdquo;) common shares; expectations on the impact of the potential transfer of the Alberta Power Purchase Arrangements
(&ldquo;PPA&rdquo;) to the Balancing Pool; and expectations of the financial impact of our agreement with the Government of Alberta
in respect of flood and drought mitigation.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: right">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">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; increasingly stringent 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 or man-made
disasters; the threat of terrorism and cyberattacks; equipment failure and our ability to carry out or have completed the repairs
in a cost-effective or timely manner; commodity risk management; industry risk and competition; fluctuations in the value of foreign
currencies and foreign political risks;&nbsp;the need for additional financing and the ability to access financing at a reasonable
cost; our ability to fund our growth projects; our ability to maintain our investment grade credit ratings; structural subordination
of securities; counterparty credit risk; our ability to recover our losses through our insurance coverage; our provision for income
taxes; legal, regulatory, and contractual proceedings involving the Corporation; outcomes of investigations and disputes; reliance
on key personnel;&nbsp;labour relations matters; development projects and acquisitions, including delays or changes in costs in
the construction of the South Hedland power project; and the satisfactory receipt of applicable regulatory approvals for existing
and proposed operations and growth initiatives.</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The foregoing risk factors, among others, are described
in further detail in the Governance and Risk Management section of our 2015 Annual MD&amp;A and under the heading &ldquo;Risk Factors&rdquo;
in our 2016 Annual Information Form.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M3</B></P>



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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Highlights</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Consolidated Financial Highlights</P>

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

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Revenues</font></td>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; width: 83px; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>568</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; width: 83px; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">593</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable EBITDA<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>279</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">275</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Net earnings (loss) attributable to common shareholders <i>(Restated<sup>(2)</sup>)</i></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>62</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">(40)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable net earnings attributable to common shareholders<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>14</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">26</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable FFO<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>196</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">211</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Cash flow from operating activities</font></td>
    <td nowrap style="border-bottom: Black 1pt solid">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>275</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">153</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable FCF<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>86</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">110</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Net earnings (loss) per share attributable to common </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;shareholders, basic and diluted <i>(Restated<sup>(2)</sup>)</i></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>0.22</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">(0.14)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable net earnings per share<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>0.05</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">0.09</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable FFO per share<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>0.68</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">0.76</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable FCF per share<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>0.30</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">0.40</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Dividends declared per common share</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16.05pt"><font style="font: 8pt Whitney Book"><b>0.04</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-left: 0.25in; text-align: right; line-height: 18pt; text-indent: 16pt"><font style="font: 8pt Whitney Book">0.18</font></td></tr>
</table>
<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0.5in"><SUP>([1])(2)
([2])</SUP></P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at</b></font></td>
    <td nowrap style="width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="width: 15%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Total assets</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>10,554</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10,947</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Total credit facilities, long-term debt, tax equity, </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;and finance lease obligations<sup>(3)</sup>, net of cash</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,000</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,441</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Total long-term liabilities</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5,227</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5,704</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; letter-spacing: -0.1pt">&#167;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">Comparable EBITDA for the quarter increased by $4 million
to $279 million compared to the same period in 2015 with all segments other than U.S. Coal delivering similar or improved results
over last year. Low prices in Alberta were largely mitigated through our hedging strategies and cost reduction initiatives. Asset
acquisitions in 2015 contributed positively to our results in the first quarter of 2016. The decreased contribution from U.S. Coal
is attributable to unfavourable market conditions in the Pacific Northwest.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">Comparable FFO for the quarter decreased by $15 million to $196 million compared to the same period
in 2015. Last year, FFO was positively impacted by realized currency gains.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">Comparable net earnings attributable to common shareholders for the three months ended March 31,
2016 was<BR>

$14 million ($0.05 net earnings per share), down from comparable net earnings of $26 million ($0.09 net earnings per share) during
the three months ended March 31, 2015. The decrease was primarily due to higher earnings attributable to non-controlling interests,
resulting from higher outstanding shares of TransAlta Renewables owned by the public.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">Reported net earnings attributable to common shareholders was $62 million ($0.22 net earnings per
share) compared to a net loss of $40 million ($0.14 net loss per share) for the same period in 2015. Last year, net earnings were
reduced by a $55 million income tax charge associated with the sale of an economic interest in our Australian business to TransAlta
Renewables and a $31 million ($20 million after-tax) negative change in the fair value of de-designated and economic hedges at
U.S. Coal. Reported earnings in 2016 include $29 million of non-comparable unrealized losses on intercompany financial instruments
that are attributable only to the non-controlling interests.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">The decrease in credit facilities, long-term debt, and finance lease obligations is primarily due
to the repayment of our credit facilities with cash received from the sale of economic interests in certain Canadian assets completed
in January. The strengthening of the Canadian dollar at the end of March also contributed to the reduction in balances from December.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"></TD></TR></TABLE>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left"></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-size: 7pt"><I>(<FONT STYLE="font-family: Whitney Light; color: black"><B>1</B></FONT>)
These 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 Comparable FFO
and Comparable FCF and Earnings and Other Measures on a Comparable Basis sections of this MD&amp;A for further discussion of these
items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.</I></FONT></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-size: 7pt"><I>(2)
2015 restated to reflect prior period correction to tax. Refer to the Accounting Changes section of this MD&amp;A.</I></FONT></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-size: 7pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-size: 7pt"><I>(3)
Includes current portion</I></FONT>.</P>



<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left"></P>

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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Highlights</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the quarter, we continued to work on strengthening
our financial condition and flexibility, improving our operating performance, and progressing our transition to clean power generation
through the following initiatives:</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 114.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">On Jan. 6, 2016, TransAlta Renewables acquired from us an economic interest based on the cash flows
of the Sarnia cogeneration facility and of two renewable energy facilities for proceeds valued at $540 million. Cash proceeds of
this transaction were $173 million. We also received 15.6 million common shares of TransAlta Renewables and a<BR>
$215 million convertible debenture.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">During the quarter, our 12 million Series A Preferred Shares reached their first reset date. Approximately
10.2 million shares will now pay fixed dividends of nearly $0.68 per share annually (2.7 per cent) until their next reset date
in 2021 (down from $1.15 per share) and approximately 1.8 million shares were converted into Series B Preferred Shares, which currently
pay dividends of approximately $0.62 per share (down from $1.15 per share) on an annualized basis<BR>
(2.5 per cent), adjusted quarterly. Declaration of dividends remains subject to approval by the Board of Directors<BR>
(the &ldquo;Board&rdquo;).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">We continued to advance the construction of the South Hedland power project. The bulk of the major
equipment has arrived at site. We continue to expect the project to be delivered on schedule and on budget in mid-2017.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">On Jan. 14, 2016, we revised our dividend to $0.16 per common share on an annualized basis from
$0.72 previously, and suspended our dividend reinvestment plan. As a result, our annual dividend going forward will be approximately<BR>
$46 million, down from $205 million, increasing our financial flexibility.</TD></TR></TABLE>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">In March 2016, the buyers under the legislated
Sundance and Sheerness PPAs announced their intention to transfer their respective obligations under the PPAs to the Balancing
Pool as a result of a Change in Law.&nbsp;The Balancing Pool is presently investigating whether these transfers are permitted by
the terms of the PPAs in the current circumstances and, if so, when the transfers would become effective. The outcome remains uncertain.&nbsp;If
the Balancing Pool confirms the transfers, it will assume the role of the buyers and carry out the responsibilities of the buyers
under the PPAs, including dispatching the generating units and making the capacity and energy payments to TransAlta until the end
of the PPA terms. Pursuant to the <I>Electric Utilities Act</I> (Alberta), it could also choose to terminate the PPAs after following
the requirements of legislation, which would include paying TransAlta an amount equal to the applicable closing net book value
of the generating units.&nbsp;TransAlta does not presently expect the transfer of the PPAs to the Balancing Pool to have a material
impact on our business.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">On March 16, 2016, the Alberta Government
appointed Terry Boston, the former CEO of North America&rsquo;s largest power system, as Coal Phase-out Facilitator to lead discussions
on coal transition as part of the Climate Leadership Plan. Discussions with the coal-fired generators, including TransAlta, are
now in progress.</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">On April 27, 2016, we announced that we
entered into a five-year agreement with the Government of Alberta to manage water for flood mitigation and drought mitigation through
our Ghost reservoir and our Kananaskis hydro system. The Alberta government will provide us with $5.5 million in compensation annually
to offset the impacts modified operations will have on our ability to generate power at these facilities.</P>


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corporation/Q1 2016</FONT> <B>M5</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Segmented Operational Results</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable EBITDA and operational performance for the business
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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Availability (%)</font></td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>92.3</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">89.8</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Adjusted availability (%)</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>92.3</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">91.3</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Production (GWh)</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>8,867</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9,900</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 Whitney Book"><b>Comparable EBITDA</b></font></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></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 Whitney Book">Canadian Coal</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>103</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">95</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-size: 12pt"><font style="font: 8pt Whitney Book">U.S. Coal</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(4)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">22</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-size: 12pt"><font style="font: 8pt Whitney Book">Canadian Gas</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>65</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">57</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-size: 12pt"><font style="font: 8pt Whitney Book">Australian Gas</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>31</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">27</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 Whitney Book">Wind and Solar</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>61</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">55</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 Whitney Book">Hydro</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>18</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">14</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 Whitney Book">Energy Marketing</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>23</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</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 Whitney Book">Corporate</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(18)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(18)</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total comparable EBITDA</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>279</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">275</font></td></tr>
</table>
<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><U>[3]</U></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0 0 0 0.25in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;
</FONT><U>Canadian Coal:</U> Comparable EBITDA increased by $8 million to $103 million in the first quarter, compared to the same
period in 2015, as cost reductions and effective hedging strategies have offset lower prices on uncontracted generation. Availability
was also higher than last year.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>U.S. Coal</U>: Comparable EBITDA was a $4 million loss for the quarter, compared to earnings
of $22 million for the same period in 2015 due to lower realized prices and mark-to-market losses on financial contracts put in
place to hedge our future generation. The first quarter of 2015 benefited from higher price hedges entered into during a higher
price environment in 2014.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>Canadian Gas: </U>Comparable EBITDA increased by $8 million during the first quarter to $65
million compared to the same period in 2015. Last year&rsquo;s results included $4 million unrealized mark-to-market on our gas
position, compared to a gain of $3 million this quarter.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings; letter-spacing: -0.1pt">&#167;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="letter-spacing: -0.1pt"><U>Australian Gas</U>: Comparable EBITDA increased by $4 million
during the first quarter to $31 million, compared to the same period in 2015, largely as a result of additional revenues from the
natural gas pipeline that was commissioned in late March 2015.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>Wind and Solar</U>: Comparable EBITDA is up $6 million during the quarter, compared to the same
period in 2015, due to the contribution of projects with a combined capacity of 136 MW acquired during the second half of 2015.
Higher generation from our portfolio caused by stronger wind resources compared to last year offset the impact of lower prices
in Alberta.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>Hydro</U>: Comparable EBITDA increased by $4 million to $18 million, primarily due to an adjustment
of prior years&rsquo; production volumes, and cost reduction initiatives.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>Energy Marketing</U>: Comparable EBITDA remained consistent with 2015.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify"><U>Corporate:</U> Our Corporate overhead costs during the quarter have remained similar to 2015,
as our cost reductions were offset by reduced allocations to our business segments.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(1) Adjusted for economic
dispatching at U.S. Coal.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) See the Accounting
Changes section of this MD&amp;A for information on changes in the presentation of the Gas reportable segment.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>



<P STYLE="margin-top: 0; margin-bottom: 0"></P>


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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Availability and Production</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Availability for the three months ended March 31, 2016 improved
over same period in 2015 as a result of lower unplanned outages at Canadian Coal.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Production for the three months ended March 31, 2016 decreased
by 1,033 gigawatt hours (&ldquo;GWh&rdquo;) compared to the same period in 2015, primarily due to the restructuring of our contractual
arrangement at Poplar Creek in the third quarter of 2015, and low prices in Ontario and the Pacific Northwest.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Electricity Prices</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The average spot electricity prices for the three months
ended March 31, 2016 decreased compared to 2015 in both Alberta and the Pacific Northwest markets. Lower natural gas prices and
seasonally low demand have muted volatility and depressed prices. We do not expect prices to increase significantly in Alberta
during the balance of 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0; text-align: center"><IMG SRC="image_001.gif" ALT="">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M7</B></P>



</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Comparable Funds from Operations and Comparable Free Cash
Flow</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable FFO and comparable FCF provide a proxy for the
amount of cash generated from operating activities before changes in working capital, and provide the ability to evaluate cash
flow trends more readily in comparison with results from prior periods. Comparable FFO per share and comparable FCF per share are
calculated using the weighted average number of common shares outstanding during the period.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</font></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"><font style="font: 8pt Whitney Book">Cash flow from operating activities</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>275</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">153</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Change in non-cash operating working capital balances</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(94)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">49</font></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"><font style="font: 8pt Whitney Book"><b>Cash flow from operations before changes in working capital</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>181</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">202</font></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"><font style="font: 8pt Whitney Book">Adjustments</font></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="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></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Decrease in finance lease receivable</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>14</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Payment of restructuring costs</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Maintenance costs related to Alberta flood of 2013, </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;net of insurance recoveries</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 1%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 21%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Other</font></td>
    <td nowrap style="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 47%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 3%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 12%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="width: 14%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></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"><font style="font: 8pt Whitney Book"><b>Comparable FFO</b></font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>196</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">211</font></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"><font style="font: 8pt Whitney Book">Deduct:</font></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="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></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; text-indent: 8pt"><font style="font: 8pt Whitney Book">Sustaining capital</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(59)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(70)</font></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; text-indent: 8pt"><font style="font: 8pt Whitney Book">Dividends paid on preferred shares</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(12)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(12)</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; text-indent: 8pt"><font style="font: 8pt Whitney Book">Distributions paid to subsidiaries' non-controlling interests</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(39)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(19)</font></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"><font style="font: 8pt Whitney Book"><b>Comparable FCF</b></font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>86</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">110</font></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"><font style="font: 8pt Whitney Book">Weighted average number of common shares </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;outstanding in the period</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>288</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">277</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable FFO per share</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>0.68</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">0.76</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable FCF per share</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>0.30</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">0.40</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable FCF for the three months ended March 31, 2016
decreased by $24 million as a result of lower comparable FFO and increased non-controlling interest dividend payments associated
with the additional shares issued and sold to<BR>
non-controlling interests in TransAlta Renewables in 2015 and 2016. Lower than last year sustaining capital partly offset the shortfall
in comparable FCF.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">A reconciliation of comparable EBITDA to comparable FFO
is as follows:</P>

<P STYLE="color: white; font: 8pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 23%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 48%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 3%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 12%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td style="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Comparable EBITDA</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>279</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">275</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Interest expense</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(58)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(55)</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unrealized (gains) losses from risk management activities</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(7)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Current income tax expense</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(5)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(6)</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Provisions</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(9)</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Decommissioning and restoration costs settled</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(3)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(5)</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Realized foreign exchange gain (loss)</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">8</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Other non-cash items</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(10)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(2)</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable FFO</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>196</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">211</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For the first quarter 2016, comparable FFO decreased by
$15 million to $196 million compared to the first quarter 2015, mainly due to higher unrealized gains included in EBITDA, lower
realized foreign exchange gains, and an increase in long-term receivables, partially offset by a reduction to provisions.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Key Financial Ratios&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The methodologies and ratios used by rating agencies to
assess our credit rating are not publicly disclosed. We have developed our own definitions of ratios and targets to help evaluate
the strength of our financial position. These metrics and ratios are not defined under IFRS, and may not be comparable to those
used by other entities or by rating agencies. We are focused on strengthening our financial position and flexibility and aim to
meet all our target ranges by 2018.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Comparable Funds from Operations before Interest to Adjusted
Interest Coverage</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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Comparable FFO</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 16%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>725</b></font></td>
    <td nowrap style="width: 13%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">740</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Add:&nbsp;&nbsp;Interest on debt net of capitalized interest</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>226</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">223</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book"><b>Comparable FFO before interest</b></font><b><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></b></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>951</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">963</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-size: 12pt"><font style="font: 8pt Whitney Book">Interest on debt</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>235</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">232</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Add:&nbsp;&nbsp;50 per cent of dividends paid on preferred shares</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>23</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</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-size: 12pt"><font style="font: 8pt Whitney Book"><b>Adjusted interest</b></font><b><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></b></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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>258</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">255</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable FFO before interest to adjusted interest coverage (times)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3.7</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3.8</font></td></tr>
</table>
<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our target for comparable FFO before interest to adjusted
interest coverage is four to five times. The ratio deteriorated slightly compared to Dec. 31, 2015 primarily due to lower FFO over
the last 12 months.</P>

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

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Adjusted Comparable Funds from Operations to Adjusted
Net Debt</P>

<P STYLE="color: red; 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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Comparable FFO</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 16%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>725</b></font></td>
    <td nowrap style="width: 13%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">740</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Less:&nbsp;&nbsp;50 per cent of dividends paid on preferred shares</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(23)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(23)</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book"><b>Adjusted comparable FFO</b></font><b><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></b></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>702</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">717</font></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; font-size: 12pt"><font style="font: 8pt Whitney Book">Period-end long-term debt</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,030</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,495</font></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"><font style="font: 8pt Whitney Book">Add:&nbsp;&nbsp;50 per cent of issued preferred shares</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>471</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">471</font></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"><font style="font: 8pt Whitney Book">Less:&nbsp;&nbsp;Cash and cash equivalents</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(30)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(54)</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Fair value asset of hedging instruments on debt<sup>(3)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(125)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(190)</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 Whitney Book"><b>Adjusted net debt</b></font></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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,346</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,722</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="4" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Adjusted comparable FFO to adjusted net debt (%)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>16.2</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">15.2</font></td></tr>
</table>
<P STYLE="color: white; font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><SUP>[4]</SUP></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our target for adjusted comparable FFO to adjusted net debt
is 20 to 25 per cent. The improvement in the ratio during the first quarter is primarily due to our repayment of amounts borrowed
under the credit facility following receipt of proceeds from the public offering of additional common shares of TransAlta Renewables
and reduction of debt due to the strengthening of the Canadian dollar in March.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(1) Last 12 months.
Our target range for comparable FFO in 2016 is $755 million to $835 million.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) Includes finance
lease obligations and tax equity financing.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(3) Included in risk
management assets and/or liabilities on the condensed consolidated financial statements as at March 31, 2016 and Dec. 31, 2015.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>


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corporation/Q1 2016</FONT></P>


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<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Adjusted Net Debt to Comparable EBITDA<FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><I>
</I></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></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; font-size: 12pt"><font style="font: 8pt Whitney Book">Period-end long-term debt</font><font style="font: 9pt Whitney Book"><sup>(1)</sup></font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,030</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,495</font></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"><font style="font: 8pt Whitney Book">Less:&nbsp;&nbsp;Cash and cash equivalents</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(30)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(54)</font></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"><font style="font: 8pt Whitney Book">Add:&nbsp;&nbsp;50 per cent of issued preferred shares</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>471</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">471</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Fair value asset of hedging instruments on debt<sup>(2)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(125)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(190)</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 222px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Adjusted net debt</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 76px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 105px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 100px; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,346</b></font></td>
    <td nowrap style="width: 78px; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,722</font></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; font-size: 12pt"><font style="font: 8pt Whitney Book"><b>Comparable EBITDA</b></font><b><font style="font: 9pt Whitney Book"><sup>(3)</sup></font></b></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>949</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">945</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="4" style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Adjusted net debt to comparable EBITDA (times)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4.6</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5.0</font></td></tr>
<tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
</table>
<P STYLE="color: white; font: 8pt/18pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><SUP>[5]</SUP></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our target for adjusted net debt to comparable EBITDA is
3.0 to 3.5 times. During the first quarter, our ratio improved compared to Dec. 31, 2015, mainly as a result of a lower debt balance.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Significant and Subsequent Events</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&#9;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Sundance and Sheerness PPA Terminations</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">In March 2016, the buyers under the legislated
Sundance and Sheerness PPAs announced their intention to transfer their respective obligations under the PPAs to the Balancing
Pool as a result of a Change in Law.&nbsp;The Balancing Pool is presently investigating whether these transfers are permitted by
the terms of the PPAs in the current circumstances and, if so, when the transfers would become effective. The outcome remains uncertain.&nbsp;If
the Balancing Pool confirms the transfers, it will assume the role of the buyers and carry out the responsibilities of the buyers
under the PPAs, including dispatching the generating units and making the capacity and energy payments to TransAlta until the end
of the PPA terms. Pursuant to the <I>Electric Utilities Act</I> (Alberta), it could also choose to terminate the PPAs after following
the requirements of legislation, which would include paying TransAlta an amount equal to the applicable closing net book value
of the generating units.&nbsp;TransAlta does not presently expect the transfer of the PPAs to the Balancing Pool to have a material
impact on our business.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Credit Ratings Outlook</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As at March 31, 2016, we maintain investment grade ratings
from three credit rating agencies, but during the first quarter, DBRS and Fitch changed their outlooks from stable to negative.
Their negative outlooks are a reflection of low energy prices and concerns over coal generation transition in Alberta. We remain
focused on strengthening our financial position by<BR>
de-leveraging our capital structure and securing a fair agreement with the Government of Alberta to assist them in their goal to
transition the generation in the province to gas and renewables.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Flood and Drought Mitigation Agreement</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">On April 27, 2016, we announced that we
entered into a five-year agreement with the Government of Alberta to manage water on the Bow River at our Ghost reservoir facility
to aid in potential flood mitigation efforts, as well as our Kananaskis Lakes system (which includes Interlakes, Pocaterra and
Barrier), for drought mitigation efforts. As far as is possible, this agreement has been structured to be break-even. TransAlta
expects to cover lost revenue if and when water levels must be lowered and power cannot be generated for customers, but does not
expect to make a profit. The Alberta government will provide us with $5.5 million in compensation annually to offset the impacts
modified operations will have on our ability to generate power at these facilities.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic 7pt Whitney Light; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">(1) Includes finance
lease obligations and tax equity financing.</P>

<P STYLE="font: italic 7pt Whitney Light; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">&nbsp;</P>

<P STYLE="font: italic 7pt Whitney Light; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">(2) Included in risk
management assets and/or liabilities on the consolidated financial statements as at March 31, 2016 and Dec. 31, 2015.</P>

<P STYLE="font: italic 7pt Whitney Light; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">&nbsp;</P>

<P STYLE="font: italic 7pt Whitney Light; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">(3) Last 12 months.
Our target range for comparable EBITDA in 2016 is $990 million to $1,100 million.</P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"></P>


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corporation/Q1 2016</FONT> <B>M9</B></P>



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<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Conversion of Series A Preferred Shares to Series B
Preferred Shares&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On March 17, 2016, 1,824,620 of our 12 million Series A
Cumulative Redeemable Fixed Rate Reset Preferred Shares were tendered for conversion, on a one-for-one basis, into Series B Cumulative
Redeemable Floating Rate Preferred Shares. For the next five years, the Series A Shares will pay a fixed cumulative preferential
cash dividend of $0.67725 per share annually (down from $1.15 per share), subject to the Board&rsquo;s dividend declaration. The
Series B Shares will pay quarterly floating rate cumulative preferential cash dividends set at the sum of the 90 day Government
of Canada Treasury Bill rate plus 2.03 per cent. The annualized quarterly dividend rate for the Series B Shares for the 3-month
floating rate period for the second quarter 2016 is $0.623 per share.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">South Hedland</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We continued to advance the construction of the South Hedland
power project. Major equipment has been arriving on schedule. The bulk of the major equipment has arrived at site. We continue
to expect the project to be delivered on schedule and on budget in mid-2017.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Environmental Regulation Updates</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Refer to the Environmental and Local Communities Capital
section of our 2015 Annual MD&amp;A for further details that supplement the recent developments as discussed below.</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">Alberta</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">On Nov. 22, 2015, the Government of Alberta
announced through the Climate Leadership Plan its intent, among other things, to phase out emissions from coal-fired generation
by 2030, replace two-thirds of the retiring coal-fired generation with renewable generation, and impose a new carbon price of $30
per tonne of CO<SUB>2</SUB> emissions based on an industry-wide performance standard. On March 16, 2016, the Government of Alberta
announced the appointment of Terry Boston, the former CEO of PJM, North America&rsquo;s largest power system, as the Coal Phase-out
Facilitator to work with coal-fired electricity generators, the Alberta Electric System Operator, and the Government of Alberta
to develop options to phase out emissions from coal-fired generation by 2030. Mr. Boston is tasked with presenting options to the
government that will strive to maintain the reliability of Alberta&rsquo;s electricity grid, maintain stability of prices for consumers,
and avoid unnecessarily stranding capital. Discussions with the coal-fired generators, including TransAlta, are now in progress.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">In
March 2016, Alberta began the development of its renewable energy procurement process designed for the Alberta Electric System
Operator to procure a first block of renewable generation projects to be in-service by mid-2019.</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">Ontario</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Feb. 25, 2016, Ontario released draft regulations for
its greenhouse gas cap and trade program. The regulations are to become effective Jan. 1, 2017, and will apply to all fossil fuel
used for electricity generation. The majority of our gas-fired generation in Ontario will not be significantly impacted by virtue
of change-in-law provisions within existing power purchase agreements. Further details of the regulations are being developed with
public consultation, in which we are participating.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">A separate offset regulation will be drafted later in 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 9pt/12pt Whitney Medium; margin: 0; text-align: left">U.S. Federal and Pacific Northwest</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Feb. 9, 2016, the U.S. Supreme Court stayed the implementation
of the Clean Power Plan pending consideration as to whether the regulations are lawful. It is not clear yet how this may affect
the future of the Clean Power Plan. As a result of our 2011 agreement for coal transition with the State of Washington, we do not
expect the proposed regulations to significantly affect our U.S. operations.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 14pt/normal Archer Book; margin: 0; text-align: left"><FONT STYLE="text-transform: none; letter-spacing: 0pt"><B>Discussion
of Segmented Comparable Results </B></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In January 2016, we began reporting Canadian Gas and Australian
Gas as separate business segments. Previously these segments were reported as one business segment, Gas. The segment has now been
differentiated geographically to provide additional information to our readers. See the Current Accounting Changes section of this
MD&amp;A for additional information.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable figures are not defined under IFRS. Refer to
the Earnings and Other Measures on a Comparable Basis section of this MD&amp;A for further discussion of these items, including,
where applicable, reconciliations to net earnings attributable to common shareholders.</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left"></P>

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corporation/Q1 2016</FONT></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Canadian Coal</P>

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

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Availability (%)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>86.6</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">84.5</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 Whitney Book">Contract production (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4,919</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,916</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Merchant production (GWh)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>909</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,021</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 Whitney Book">Total production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5,828</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5,937</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3,786</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3,771</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>234</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">246</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>83</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">99</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>151</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">147</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>45</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">49</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 Whitney Book">Taxes, other than income taxes</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>103</b></font></td>
    <td style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">95</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>76</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">71</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>27</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">24</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Routine capital</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">8</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 Whitney Book">Mine capital</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">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 Whitney Book">Finance leases</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</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 Whitney Book">Planned major maintenance</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>37</b></font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">30</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total sustaining capital expenditures</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>42</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">45</font></td></tr>
</table>
<P STYLE="font: 3pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Production for the three months ended March 31, 2016 decreased
109 GWh compared to the same period in 2015, primarily due to higher economic dispatching and paid curtailments as a result of
lower prices in Alberta. Availability for the quarter was higher than last year despite execution of significant planned major
maintenance activities.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable EBITDA for the three months ended March 31, 2016
was $103 million compared to $95 million for the same period in 2015 due to better availability, lower cost of coal, reduction
in our gas consumption, and lower operations, maintenance, and administration costs. Our high level of hedges mitigated most of
the impact of low power prices on uncontracted generation.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Depreciation and amortization for the three months ended
March 31, 2016 increased compared to the same period in 2015 mainly due to higher asset retirements and a higher asset base than
2015.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Sustaining capital expenditures were higher by $3 million
in the first quarter of 2015 as a result of coal hauler rebuilds during the period. In the first quarter of 2016, we completed
limited-scope planned major maintenance on two units and started the major overhaul of another unit that was returned to service
in April. A partner also completed major maintenance of one unit that we do not operate.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M11</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">U.S. Coal</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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">2015</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></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 Whitney Book">Availability (%)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>100.0</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">91.0</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 Whitney Book">Adjusted availability (%)<sup>(1)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>100.0</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">100.0</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 Whitney Book">Contract sales volume (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>915</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">689</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 Whitney Book">Merchant sales volume (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>402</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">577</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Purchased power (GWh)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(945)</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(711)</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 Whitney Book">Total production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>372</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">555</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,340</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,340</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>61</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">82</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>52</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">47</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>9</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">35</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>12</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12</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 Whitney Book">Taxes, other than income taxes</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(4)</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">22</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(3)</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">15</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income (loss)</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Routine capital</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</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 Whitney Book">Planned major maintenance</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For the three months ended March 31, 2016, production decreased
183 GWh compared to the same period in 2015 due mainly to an earlier start to seasonal economic dispatching. Lower prices during
the quarter provided us the opportunity to shut down our generation earlier and supply our contractual obligation by buying cheaper
power in the market. We are using that time to execute planned major maintenance on both units. We expect the units to be available
in June when prices are expected to be higher.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable EBITDA decreased by $26 million for the three
months ended March 31, 2016 compared to the same period in 2015, primarily as a result of much lower realized prices. Results of
the first quarter of 2015 benefited from higher priced hedges entered into in 2014.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Depreciation and amortization was in a recovery position
in the first quarter of 2016 as a result of higher discount rates being applied to our decommissioning obligation of the Centralia
mine. As the mine is in the reclamation stage, the adjustment flows directly to earnings.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(<FONT STYLE="font: 7pt Whitney Light; color: black"><B>1</B></FONT>)
Adjusted for economic dispatching.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) Restated to include
non-operating legacy U.S. Gas costs. Refer to the Accounting Changes section of this MD&amp;A.</P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT> <B>M11</B></P>



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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Canadian Gas</P>

<P STYLE="color: red; font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Availability (%)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>99.4</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">99.8</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 Whitney Book">Contract production (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>743</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,026</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Merchant production (GWh)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">695</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 Whitney Book">Total production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>743</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,721</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)<sup>(1)</sup></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,057</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,183</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>122</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">143</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>42</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">67</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>80</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">76</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>14</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">18</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Taxes, other than income taxes</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</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 Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>65</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">57</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>28</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">24</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>37</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">33</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Routine capital</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">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 Whitney Book">Planned major maintenance</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9</font></td></tr>
</table>
<P STYLE="color: red; 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"><B><SUP>[7]</SUP></B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Production for the three months ended March 31, 2016 decreased
978 GWh compared to the same period in 2015, primarily due to the restructuring of our contract with Suncor at Poplar Creek in
the third quarter of 2015 and low prices in Ontario.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 140.85pt">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable EBITDA for the three months ended March 31, 2016
was $65 million compared to $57 million for the same period in 2015, primarily as result of a year over year change in mark-to-market
on our gas position. Last year included losses of<BR>
$4 million compared to a gain of $3 million this quarter.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Depreciation and amortization increased $4 million during
the first quarter compared to the same period in 2015 due to the Poplar Creek restructuring that resulted in a higher asset base
under a finance lease.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Sustaining capital decreased by $7 million during the first
quarter of 2016 compared to the same period in 2015, primarily as a result of the refurbishment of a spare engine during 2015.
Also, the obligation to maintain the Poplar Creek facility has been transferred to our customer as part of our new contract arrangement.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt"><I>(<FONT STYLE="font-family: Whitney Light; color: black"><B>1</B></FONT>)
Includes production capacity for the Fort Saskatchewan power station, which has been accounted for as a finance lease. During
2015, operational control of our Poplar Creek facility was transferred to Suncor. We continue to own a portion of the facility
and have included our portion as a part of gross capacity measures. Poplar Creek has been removed from our availability and production
metrics, effective Sept. 1, 2015.</I></FONT></P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT></P>



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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Australian Gas</P>

<P STYLE="color: red; font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Availability (%)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>90.1</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">88.6</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 Whitney Book">Contract production (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>372</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">303</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)<sup>(1)</sup></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>348</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">348</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>42</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">38</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>37</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">33</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>6</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6</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 Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>31</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">27</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>26</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Routine capital</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></td></tr>
</table>
<P STYLE="color: red; 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"><B><SUP>[8]</SUP></B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">The production increase of 69 GWh during
the first quarter of 2016 compared to the same period in 2015 was due to a change in the power import regime at one of our customer&rsquo;s
location. Due to the nature of our contract, the change did not have a significant financial impact.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">Comparable
EBITDA increased by $4 million during the first quarter of 2016 to $31 million compared to the same period in 2015, largely as
a result of additional revenues from the natural gas pipeline that was commissioned in late March 2015.</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt"></FONT></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(<FONT STYLE="font: 7pt Whitney Light; color: black"><B>1</B></FONT>)
Includes production capacity for the Solomon power station, which has been accounted for as a finance lease.</P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt"></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>


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corporation/Q1 2016</FONT> <B>M13</B></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Wind and Solar</P>

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

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Availability (%)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>96.8</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">95.0</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 Whitney Book">Contract production (GWh)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>711</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">637</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Merchant production (GWh)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>420</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">340</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 Whitney Book">Total production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,131</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">977</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)<sup>(1)</sup></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,424</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,289</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>84</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">73</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>9</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>75</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">69</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>12</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12</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 Whitney Book">Taxes, other than income taxes</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>61</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">55</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>30</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">22</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>31</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">33</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Planned major maintenance</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2</font></td></tr>
</table>
<P STYLE="color: red; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify; background-color: white"><B><I><SUP>[9]</SUP></I></B></P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">Production for the first quarter of 2016 increased by
154 GWh compared to the same period in 2015, mainly due to the contribution from assets acquired during the second half of 2015
(97 GWh), and increased generation from our portfolio caused by higher wind volumes across our fleet (57 GWh). Units acquired in
2015 contributed nearly $6 million of comparable EBITDA during the quarter. Higher generation from our portfolio compared to last
year offset the impact of lower prices in Alberta. Outside of Alberta, all of our generation is contracted.</P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">Depreciation and amortization during the first quarter
of 2016 increased by $8 million compared to the same period in 2015, primarily due to the addition of new projects during the
second half of 2015 and a $1 million impact from the retirement of Cowley Ridge, the first commercial wind farm in Canada.</P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-style: normal">(1</FONT>)
Our 2015 capacity excludes acquisitions completed during the second half of 2015.</P>



<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Hydro</P>

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

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Contract production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>417</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">398</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Merchant production (GWh)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">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 Whitney Book">Total production (GWh)</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>421</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">407</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Gross installed capacity (MW)</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>926</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">913</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 Whitney Book">Revenues</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>28</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">25</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 Whitney Book">Fuel and purchased power</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable gross margin</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>26</b></font></td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">24</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>7</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10</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 Whitney Book">Taxes, other than income taxes</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>18</b></font></td>
    <td style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">14</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>7</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>11</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">8</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="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></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 Whitney Book"><b>Sustaining capital:</b></font></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></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 Whitney Book">Hydro life extension</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Planned major maintenance</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td></tr>
</table>
<P STYLE="color: red; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">Production for the first quarter of 2016 increased by
14 GWh compared to the same period in 2015 due to increased water resource over last year.</P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable EBITDA increased by $4 million to $18 million,
primarily due to a correction with a buyer of prior years&rsquo; production volumes, and cost reduction initiatives.</P>


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corporation/Q1 2016</FONT> <B>M15</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Energy Marketing</P>

<P STYLE="font: 8pt/12pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Revenues and comparable gross margin</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>32</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">31</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 Whitney Book">Operations, maintenance, and administration</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>9</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">8</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 Whitney Book"><b>Comparable EBITDA</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>23</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation and amortization</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating income</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>22</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">Comparable EBITDA remained similar to
2015 and in line with our expectations for the first quarter.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Corporate</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The expenses incurred by the Corporate Segment are as follows:</P>

<P STYLE="font: 8pt/12pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 68%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Operations, maintenance, and administration </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;and taxes other than income taxes</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>18</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">18</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 Whitney Book">Depreciation and amortization</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>7</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable operating loss</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>25</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">24</font></td></tr>
<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 style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book"><b>Sustaining capital:</b></font></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></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Routine capital</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0 0 0 14.2pt; text-align: justify; text-indent: -14.2pt">&nbsp;</P>

<P STYLE="font: 9pt/10.75pt Whitney Book; margin: 0; text-align: justify">Our Corporate overhead costs during the quarter have
remained comparable to 2015. Benefits of lower costs in the segment from our recent restructuring amounting to approximately $3
million this period have been primarily passed on to our operating segments.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>


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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Other Consolidated Analysis&#9;</P>

<P STYLE="color: red; font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Income Taxes</P>

<P STYLE="color: white; font: 8pt/12pt Whitney Book; margin: 0; text-align: justify">[10]</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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="color: red; font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 76%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 11%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</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 Whitney Book">Earnings before income taxes</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>53</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">29</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable adjustments:</font></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></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 Whitney Book">Impacts associated with certain de-designated and economic hedges</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">31</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Economic hedges of non-controlling interest in </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;intercompany foreign exchange contracts</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(2)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</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 Whitney Book">Restructuring expense</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Flood-related maintenance costs, net of insurance recovery</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</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 Whitney Book">Comparable earnings before tax</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>56</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">68</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable earnings attributable to non-controlling interests before tax</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(27)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(16)</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable earnings attributable to TransAlta shareholders </b></font><br>
<font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;subject to tax</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>29</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">52</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 Whitney Book">Income tax expense (recovery) <i>(Restated<sup>(1)</sup>)</i></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(18)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">43</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 Whitney Book"><b>Comparable income tax expense adjustments:</b></font></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></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 Whitney Book">Income tax expense related to impacts associated </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;with certain de-designated and economic hedges</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">11</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 Whitney Book">Income tax recovery related to restructuring provision</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2</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 Whitney Book">Income tax recovery related to writedown of deferred income tax assets</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>23</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">15</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Income tax expense related to investment in subsidiary <i>(Restated<sup>(1)</sup>)</i></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(55)</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 Whitney Book">Income tax expense related to changes in corporate income tax rates</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Income tax expense related to non-comparable items attributable to economic </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;hedges of non-controlling interest in intercompany foreign exchange contracts</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</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 Whitney Book"><b>Comparable income tax expense</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">16</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable income tax expense attributable to non-controlling interests</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(2)</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 Whitney Book"><b>Comparable income tax expense attributable to TransAlta shareholders</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">14</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Comparable effective tax rate on earnings attributable to TransAlta </b></font><br>
<font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;shareholders (%)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>10</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">27</font></td></tr>
</table>
<P STYLE="color: red; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The comparable income tax expense attributable to TransAlta
shareholders for the three months ended March 31, 2016 decreased compared to the same period in 2015 primarily due to lower comparable
earnings.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The comparable effective tax rate on earnings attributable
to TransAlta shareholders decreased for the three months ended March 31, 2016 compared to the same period in 2015 primarily due
to the effect of certain deductions that do not fluctuate with earnings and changes in the amount of earnings between the jurisdictions
in which the pre-tax income was earned.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(1) 2015 restated
to reflect prior period correction. Refer to the Accounting Changes section of this MD&amp;A. &#9;</P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT> <B>M17</B></P>



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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the three months ended March 31, 2016, we reversed
a previous writedown of deferred income tax assets of<BR>
$23 million (March 31, 2015 - $15 million) of which $10 million represented an adjustment in respect of deferred income tax of
prior periods. The remaining deferred income tax assets mainly relate to the tax benefits of losses associated with our directly
owned U.S. operations. We had written these assets off as it was no longer considered probable that sufficient future taxable income
would be available from our directly owned U.S. operations to utilize the underlying tax losses, due to reduced price growth expectations.
We recognized other comprehensive income during the period that has given rise to taxable temporary differences, which forms the
primary basis for utilization of some of the tax losses and the reversal of the writedown.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In order to give effect to the sale of an economic interest
in Australian assets with TransAlta Renewables, a reorganization of certain TransAlta subsidiaries was completed. The reorganization
resulted in the recognition in the first quarter of 2015 of a $55 million deferred tax liability on TransAlta's investment in
a subsidiary. The deferred tax liability had not been recognized previously, since prior to the reorganization, the taxable temporary
difference was not expected to reverse in the foreseeable future.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="font-size: 12pt"><B>Capital Structure and
Liquidity</B></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our capital structure consisted of the following components
as shown below:</P>

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

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td nowrap style="vertical-align: bottom; width: 11%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at</b></font></td>
    <td nowrap style="vertical-align: bottom; width: 26%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; width: 6%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; width: 3%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; width: 3%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; width: 9%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>$</b></font></td>
    <td nowrap style="vertical-align: bottom; width: 9%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>%</b></font></td>
    <td nowrap style="vertical-align: bottom; width: 11%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">$</font></td>
    <td nowrap style="vertical-align: bottom; width: 11%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">%</font></td>
    <td style="width: 11%; text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td colspan="5" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Recourse debt - CAD debentures</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,045</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>12</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,044</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td colspan="5" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Recourse debt - U.S. senior notes</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2,073</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>24</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2,221</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">26</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td colspan="5" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Credit facilities</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">315</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td colspan="5" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">U.S. tax equity financing</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>45</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">50</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td colspan="5" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Other</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>34</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">17</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">-</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr>
    <td nowrap colspan="2" style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Less: cash and cash equivalents</font></td>
    <td style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(30)</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(54)</font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(1)</font></td>
    <td style="text-align: justify; line-height: 18pt; font-size: 12pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="5" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Less: fair value asset of hedging instruments on debt</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(125)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(1)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(190)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(2)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt">&nbsp;</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 Whitney Book">Net recourse debt</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td 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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3,042</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>36</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3,403</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">40</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Non-recourse debt</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>754</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>9</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">766</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Finance lease obligations</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>79</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">82</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Total net debt</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3,875</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>46</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4,251</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">50</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Non-controlling interests</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1,164</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>14</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1,029</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Equity attributable to shareholders</font></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="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 style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Common shares</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3,093</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>37</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3,075</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">35</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Preferred shares</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>942</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>11</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">942</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">11</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td colspan="5" style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Contributed surplus, deficit, and </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accumulated other comprehensive income</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(657)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(8)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(656)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(8)</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total capital</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>8,417</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>100</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">8,641</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">100</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
</table>
<P STYLE="color: red; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the quarter, we paid out the credit facilities balance
of approximately $315 million through a combination of cash flows from operations and cash proceeds of $173 million received from
the sale to TransAlta Renewables of an economic interest in the 506 MW Sarnia cogeneration facility and two renewable energy facilities
that closed Jan. 6, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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corporation/Q1 2016</FONT></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">The weakening of the US dollar decreased
our long-term debt balances by $155 million since Dec. 31, 2015. Almost all of our U.S.-denominated debt is hedged either through
financial contracts or net investments in our U.S. operations. During the quarter, these changes in our U.S.-denominated debt were
offset 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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;2016 </b></font></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"><font style="font: 8pt Whitney Book">Effects of foreign exchange on carrying amounts of U.S. operations </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;(net investment hedge) and finance lease receivable</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(81)</b></font></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"><font style="font: 8pt Whitney Book">Foreign currency cash flow hedges on debt</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(68)</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Economic hedges and other</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 33%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td nowrap style="width: 3%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 3%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 23%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 21%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(155)</b></font></td></tr>
<tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the period through Dec. 31, 2018, we have approximately
$1.6 billion of recourse and non-recourse debt maturing. We expect to refinance some of these upcoming debt maturities by raising
debt secured by some of our contracted assets in Canada and the U.S. We also expect to continue our de-leveraging strategy and
most of our free cash flow over the next three years, after funding of the South Hedland project, will be allocated to debt reduction.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Credit Facilities</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">Our credit facilities
provide us with significant liquidity. At March 31, 2016, we had a total of $2.1 billion </FONT><BR>
<FONT STYLE="letter-spacing: -0.1pt">(Dec. 31, 2015 - $2.2 billion) of committed credit facilities, of which $1.5 billion (Dec.
31, 2015 - $1.3 billion) was available. We are in compliance with the terms of the credit facilities. At March 31, 2016, the $0.6
billion (Dec. 31, 2015 - $0.9 billion) of credit utilized under these facilities was comprised of actual drawings of nil (Dec.
31, 2015 - $0.3 billion) and letters of credit of </FONT><BR>
<FONT STYLE="letter-spacing: -0.1pt">$0.6 billion (Dec. 31, 2015 - $0.6 billion). These facilities are comprised of a $1.5 billion
committed syndicated bank facility expiring in 2019, and four bilateral credit facilities expiring in 2017. We anticipate renewing
these facilities, based on reasonable commercial terms, prior to their maturities.</FONT></P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Share Capital</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On March 17, 2016, we announced that 1,824,620 of our 12
million Series A Cumulative Fixed Redeemable Rate Reset Preferred Shares were tendered for conversion, on a one-for-one basis,
into the Series B Cumulative Redeemable Floating Rate Preferred Shares. Refer to the Highlights and Significant and Subsequent
Events sections of this MD&amp;A for further details.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The following table outlines the common and preferred shares
issued and outstanding:</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 58%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>As at </b></font></td>
    <td nowrap style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>May 2, 2016</b></font></td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Number of shares </b><i>(millions)</i></font></td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Common shares issued and outstanding, end of period</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>287.9</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>287.9</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">284.0</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Preferred shares </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 10pt">&nbsp;</td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Series A</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10.2</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10.2</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12.0</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Series B</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1.8</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1.8</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></font></td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Series C</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">11.0</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">11.0</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">11.0</font></td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Series E</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9.0</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9.0</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">9.0</font></td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Series G</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6.6</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6.6</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">6.6</font></td></tr>
<tr style="background-color: white">
    <td nowrap style="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Preferred shares issued and outstanding, end of period</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>38.6</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>38.6</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">38.6</font></td></tr>
</table>
<P STYLE="font: 12pt/18pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M19</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Non-Controlling Interests</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify; text-indent: 0in">As of March 31, 2016, we own 64.0 per
cent (Dec. 31, 2015 &ndash; 66.6 per cent) of TransAlta Renewables. On Jan. 6, 2016, we completed the sale of an economic interest
of the 506 MW Sarnia cogeneration facility and of two renewable energy facilities with total capacity of 105 MW for $540 million.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We remain committed to maintaining our position as the majority
shareholder and sponsor of TransAlta Renewables with a stated goal of maintaining our interest between 60 to 80 per cent.</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Returns to Providers of Capital</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Net Interest Expense</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 76%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 11%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Interest on debt</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>60</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">57</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Capitalized interest</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(3)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(3)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Interest on finance lease obligations</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Accretion of provisions</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>6</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Net interest expense</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>64</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">60</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For the three months ended March 31, 2016, net interest
expense increased compared to the same period in 2015, primarily due to higher interest expense on foreign-denominated debt due
to the stronger US dollar relative to the same period last year.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="background-color: yellow">&nbsp;</FONT></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Dividends to Shareholders</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Jan. 14, 2016, we announced a reduction of our common
share dividend from $0.72 annually to $0.16 annually and the suspension of the Premium Dividend<SUP>TM</SUP>, Dividend Reinvestment
and Optional Common Share Purchase Plan effective immediately. These actions were taken as part of a plan to maximize our long-term
financial flexibility. Declaration of dividends is at the discretion of the Board.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On Feb. 16, 2016, we declared a quarterly dividend of $0.04
per share on common shares, payable on April 1, 2016 and a quarterly dividend of $0.2875 per share on the Series A and Series C
preferred shares, $0.3125 per share on the Series E preferred shares, and $0.33125 per share on the Series G preferred shares,
all payable on March 31, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">On April 21, 2016, we declared a quarterly dividend of $0.04
per share on common shares, payable on July 1, 2016 and a quarterly dividend of $0.16931 per share on the Series A preferred shares,
$0.15940 per share on the Series B preferred shares, $0.2875 on the Series C preferred shares, $0.3125 per share on the Series
E preferred shares, and $0.33125 per share on the Series G preferred shares, all payable on June 30, 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Non-Controlling Interests</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable earnings attributable to non-controlling interests
for the three months ended March 31, 2016 increased<BR>
$12 million to $26 million compared to the same period in 2015, primarily due to the additional common shares issued to the public
by TransAlta Renewables in relation to the Australian and Canadian portfolio dropdowns in addition to higher earnings of TransAlta
Renewables on a larger asset base, partially offset by unrealized foreign exchange losses on some of the financial interests in
the Australian Assets.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT></P>


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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Financial Position</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The following charts highlight significant changes in the
Condensed Consolidated Statements of Financial Position from<BR>
Dec. 31, 2015 to March 31, 2016:</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Increase/</b></font></td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(decrease)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Primary factors explaining change</b></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 Whitney Book">Cash and cash equivalents</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Timing of receipts and payments, repayment of credit facilities</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 Whitney Book">Trade and other receivables</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(110)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Timing of customer receipts, offset by increases in collateral paid ($27 million) and seasonality of revenue</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 Whitney Book">Finance lease receivables (long-term)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(44)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unfavourable changes in foreign exchange rates </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 Whitney Book">Property, plant, and equipment, net </font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(143)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Depreciation for the period ($139 million), unfavourable changes in foreign exchange rates ($65 million), and revisions to decommissioning and restoration costs ($19 million), partially offset by additions ($85 million)</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 Whitney Book">Risk management assets (current and long-term)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(74)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Changes in foreign exchange rates </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 Whitney Book">Other</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total decrease in assets</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(393)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
</table>
<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 Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Increase/</b></font></td>
    <td nowrap style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(decrease)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Primary factors explaining change</b></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 Whitney Book">Credit facilities, long-term debt, and finance lease </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;obligations (including current portion)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(465)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Favourable effects of changes in foreign exchange rates </font><br>
<font style="font: 8pt Whitney Book">($155 million) and credit facility repayment ($315 million)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Decommissioning and other provisions (current </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;and long-term)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(42)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Increase in risk-adjusted discount rates</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 Whitney Book">Defined benefit obligation and other </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;long-term liabilities</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">23</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Decrease in risk free discount rates</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 Whitney Book">Risk management liabilities (current and </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;long-term)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(31)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Contract settlements</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 Whitney Book">Equity attributable to shareholders</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">17</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Net earnings ($64 million), issuance of common shares </font><br>
<font style="font: 8pt Whitney Book">($18 million), and gains on cash flow hedges ($43 million), partially offset by net losses on translating net assets of foreign operations ($52 million) and actuarial losses on defined benefit plans ($20 million)</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 Whitney Book">Non-controlling interests</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">135</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Sale of economic interests to TransAlta Renewables, partially offset by net loss for the period, and distributions paid and payable to non-controlling interests</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Other</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">(30)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total decrease in liabilities and equity</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>(393)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
</table>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

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corporation/Q1 2016</FONT> <B>M21</B></P>



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<P STYLE="font: 12pt/18pt Archer Book; margin: 0; text-align: justify"><B>Cash Flows</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The following chart highlights significant changes in the
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 compared to the same period in 2015:</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 37%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="width: 8%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2015</font></td>
    <td nowrap style="width: 47%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Primary factors explaining change</b></font></td></tr>
<tr style="background-color: white">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Cash and cash equivalents, beginning of period</font></td>
    <td nowrap style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54 </b></font></td>
    <td nowrap style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43 </font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Provided by (used in):</font></td>
    <td nowrap style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Operating activities</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;275 </b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;153 </font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Favourable change in non-cash working capital of $143 million, partially offset by lower cash earnings</font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Investing activities</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(67)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(143)</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Lower additions to property, plant, and equipment, realized gains on financial instruments, and a higher decrease in finance lease receivables as a result of the Poplar Creek restructuring during late 2015</font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;Financing activities</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(230)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Repayment of credit facilities, an increase in distributions to non-controlling interests, and lower realized gains on financial instruments, partially offset by the proceeds from the sale of additional non-controlling interests</font></td></tr>
<tr style="background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Translation of foreign currency cash</font></td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</b></font></td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td></tr>
<tr style="background-color: white">
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Cash and cash equivalents, end of period</font></td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30 </b></font></td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61 </font></td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</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: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Unconsolidated Structured Entities or Arrangements</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Disclosure is required of all unconsolidated structured
entities or arrangements such as transactions, agreements, or contractual arrangements with unconsolidated entities, structured
finance entities, special purpose entities, or variable interest entities that are reasonably likely to materially affect liquidity
or the availability of, or requirements for, capital resources. We currently have no such unconsolidated structured entities or
arrangements.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Guarantee Contracts</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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,
commodity risk management and hedging activities, construction projects, and purchase obligations. At March 31, 2016, we provided
letters of credit totalling $588 million (Dec. 31, 2015 -<BR>
$575 million) and cash collateral of $101 million (Dec. 31, 2015 - $74 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left"><FONT STYLE="text-transform: none; letter-spacing: 0pt"><B>Earnings
and Other Measures on a Comparable Basis</B></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; 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 measures are not necessarily comparable to a similarly titled measure of another company.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Each business segment assumes responsibility for its operating
results measured to gross margin and operating income. Operating income and gross margin provides management and investors with
a measurement of operating performance that is readily comparable from period to period.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In calculating these items, we exclude certain items 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During 2016, prior period restatements were made to the
2015 period. Refer to the Accounting Changes section of this MD&amp;A for a description of these items.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The adjustments made to calculate comparable EBITDA and
comparable earnings for the three months ended March 31, 2016 and the same period in 2015 are as follows. References are to the
reconciliation presented on the following pages.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3 months ended March 31</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;2016 </b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;2015 </font></td></tr>
<tr style="vertical-align: bottom">
    <td style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Reference </b></font><br>
<font style="font: 8pt Whitney Book"><b>number</b></font></td>
    <td style="width: 41%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Adjustment </b></font></td>
    <td style="width: 26%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Segment </b></font></td>
    <td nowrap style="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td 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></tr>
<tr style="vertical-align: bottom">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Reclassifications:</b></font></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></tr>
<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 style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td rowspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">1</font></td>
    <td rowspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Finance lease income used as a proxy for </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;operating revenue</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Australian Gas</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13 </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12 </font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Canadian Gas</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3 </b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">2</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Decrease in finance lease receivable used as </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;a proxy for operating revenue and depreciation</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Canadian Gas</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Reclassification of mine depreciation from fuel </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;and purchased power</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Canadian Coal</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15 </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14 </font></td></tr>
<tr style="vertical-align: top">
    <td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Adjustments (increasing (decreasing) earnings to arrive at comparable results):</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">4</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Impacts to revenue associated with certain </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;de-designated and economic hedges</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">U.S. Coal</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5 </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31 </font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Maintenance costs related to the Alberta flood </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;of 2013, net of insurance recoveries</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Hydro</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">6</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Restructuring expense </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Canadian Coal</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 </font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">7</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Economic hedges of non-controlling interest in </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;intercompany foreign exchange contracts</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">8</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Net tax effect on comparable adjustments </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;subject to tax </font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13)</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">9</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Deferred income tax rate adjustment</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">10</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Reversal of writedown of deferred income tax assets </font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15)</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">11</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Income tax expense related to temporary difference on </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;investment in subsidiary <i>(Restated)*</i></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55 </font></td></tr>
<tr style="vertical-align: top; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">12</font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Non-comparable items attributable to </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;non-controlling interests</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Unassigned</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(29)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">* 2015 restated to
reflect prior period correction. Refer to the Accounting Changes section of this MD&amp;A. &#9;</P>



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


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corporation/Q1 2016</FONT> <B>M23</B></P>



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<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">A reconciliation of comparable results to reported results
for the three months ended March 31, 2016 and the same period in 2015 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 Times New Roman, Times, 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 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="6" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>3 months ended March 31, 2016</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap colspan="6" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">3 months ended March 31, 2015</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 96px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 24px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 47px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Reported</b></font></td>
    <td style="width: 72px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 6pt/normal Whitney Book; margin: 0; text-align: right"><b>Comparable </b></P>
        <P STYLE="font: 6pt/normal Whitney Book; margin: 0; text-align: right"><b>reclassifications</b></P></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 58px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Comparable </b></font><br>
<font style="font: 6pt Whitney Book"><b>adjustments</b></font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Comparable </b></font><br>
<font style="font: 6pt Whitney Book"><b>total</b></font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 25px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Reported</font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Comparable </font><br>
<font style="font: 6pt Whitney Book">reclassifications</font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 56px; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Comparable </font><br>
<font style="font: 6pt Whitney Book">adjustments</font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Comparable </font><br>
<font style="font: 6pt Whitney Book">total</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-size: 6pt"><font style="font: 6pt Whitney Book">Revenues</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>568</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>30</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(1, 2)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>5</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(4)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>603</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">593</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">14</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(1, 2)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">31</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(4)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">638</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book">Fuel and purchased power</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>208</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(15)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(3)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>193</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">237</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(14)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(3)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">223</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Gross margin</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>360</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>45</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>5</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>410</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">356</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">28</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">31</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">415</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book">Operations, maintenance, and administration</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>123</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>123</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">134</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(1)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(5)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">133</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-size: 6pt"><font style="font: 6pt Whitney Book">Restructuring provision</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">7</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(7)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(6)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Taxes, other than income taxes</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>8</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>8</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">7</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">7</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>EBITDA</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>229</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>45</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>5</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>279</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">208</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">28</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">39</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">275</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book">Depreciation and amortization</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>122</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>29</b></font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(2, 3)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>151</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">133</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">15</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(2, 3)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">148</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Operating income</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>107</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>16</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>5</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>128</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">75</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">13</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">39</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">127</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-size: 6pt"><font style="font: 6pt Whitney Book">Finance lease income</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>16</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(16)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(1)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">13</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(13)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(1)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Foreign exchange gain (loss)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(6)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(2)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(7)</sup></b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(8)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">1</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">1</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Earnings before interest and taxes</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>117</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>3</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>120</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">89</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">39</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">128</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-size: 6pt"><font style="font: 6pt Whitney Book">Net interest expense</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>64</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>64</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">60</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">60</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book">Income tax expense (recovery)</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(18)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>22</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(8, 9, 10)</sup></b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>4</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">43</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(27)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><sup>(8, 10, 11)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">16</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Net earnings (loss)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>71</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(19)</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>52</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(14)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-top: Black 1pt solid; 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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">66</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">52</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Non-controlling interests</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(3)</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>29</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b><sup>(12)</sup></b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>26</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">14</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">14</font></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; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Net earnings (loss) attributable to </b></font><br>
<font style="font: 6pt Whitney Book"><b>&nbsp;&nbsp;TransAlta shareholders</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>74</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(48)</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>26</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(28)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">66</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">38</font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Preferred share dividends</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>12</b></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>12</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">12</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">12</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Net earnings (loss) attributable to </b></font><br>
<font style="font: 6pt Whitney Book"><b>&nbsp;&nbsp;common shareholders</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>62</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>-</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>(48)</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>14</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(40)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">-</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">66</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">26</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">Weighted average number of common </font><br>
<font style="font: 6pt Whitney Book">&nbsp;&nbsp;shares outstanding in the period</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>288</b></font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>288</b></font></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; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">277</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">277</font></td></tr>
<tr style="vertical-align: bottom">
    <td colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>Net earnings (loss) per share attributable </b></font><br>
<font style="font: 6pt Whitney Book"><b>&nbsp;&nbsp;to common shareholders</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>0.22</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book"><b>0.05</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">(0.14)</font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 6pt"><font style="font: 6pt Whitney Book">0.09</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>

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corporation/Q1 2016</FONT></P>


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

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Financial Instruments</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Refer to Note 13 of the notes to the audited annual consolidated
financial statements within our 2015 Annual Integrated Report and Note 7 of our unaudited interim condensed consolidated financial
statements as at and for the three months ended March 31, 2016 for details on Financial Instruments. Refer to the Governance and
Risk Management section of our 2015 Annual Integrated Report and Note 8 of our unaudited 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<BR>
Dec. 31, 2015.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We may enter into commodity transactions involving non-standard
features for which observable market 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 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We may also have various contracts with terms that extend
beyond a liquid trading period.&nbsp;As forward market prices 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As at March 31, 2016, total Level III financial instruments
had a net asset carrying value of $576 million<BR>
(Dec. 31, 2015 - $542 million net asset). The increase during the period is attributable to a decrease in estimated long-term power
prices on a long-term power sale contract designated as an all-in-one cash flow hedge, for which changes in fair value are recognized
in other comprehensive income, and maturities of gas contracts, partially offset by unfavourable changes in foreign exchange rates
due to the weakening of the US dollar relative to the Canadian dollar.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

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corporation/Q1 2016</FONT> <B>M25</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left"><FONT STYLE="text-transform: none; letter-spacing: 0pt"><B>2016
Financial Outlook</B></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">Despite continuing
low prices in Alberta and Pacific Northwest, our expected key financial target ranges for 2016 remain as previously disclosed:</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">&nbsp;</FONT></P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 34%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Measure </b></font></td>
    <td nowrap style="width: 66%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;Target </b></font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;Comparable EBITDA </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;$990 million to $1,100 million </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;Comparable FFO </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;$755 million to $835 million </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;Comparable FCF </font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;$250 million to $300 million&nbsp;&nbsp;</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;Dividend </font></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;$0.16 per share, 15 to 18 per cent payout of Comparable FCF </font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Market</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">For 2016, power prices in Alberta are expected to be substantially
lower than 2015 as a result of persistent low natural gas prices, low demand growth, and the current level of supply. However,
prices can vary based on supply and weather conditions. In the Pacific Northwest we expect power prices to be lower as well due
to low natural gas prices. We do not have significant uncontracted positions in other jurisdictions.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Operations</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Availability and Operating Costs</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Availability of our coal fleet in Canada is expected to
be in the range of 87 to 89 per cent in 2016. Availability of our other generating assets (gas, renewables) generally exceeds
95 per cent. All of our businesses are sustaining cost reduction initiatives completed in 2015. We continue to explore ways to
further reduce our costs and be more competitive.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Contracted Cash Flows</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">As a result of Alberta PPAs and long-term contracts, approximately
75 per cent of our capacity is contracted over the next two years. This is reduced to 65 per cent when our Alberta PPAs for Sundance
units 1 and 2 expire in 2017. More than half of our non-contracted generation is sold forward 12 to 18 months ahead of time using
short-term physical or financial contracts, such that 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, approximately 88 per cent
of our 2016 capacity was contracted. The average prices of our short-term physical and financial contracts for 2016 are approximately
$50 per MWh in Alberta and approximately US$45 per MWh in the Pacific Northwest.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Fuel Costs</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Mining costs at our Alberta coal mine are expected to decrease
in 2016 due to improved efficiency, lower diesel cost, and production improvements. Seasonal variations in coal costs at our Alberta
mine are minimized through the application of standard costing. Coal costs for 2016, on a standard cost per tonne basis, are expected
to be one to four per cent lower than 2015 unit costs.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">In the Pacific Northwest, our U.S. Coal mine, adjacent to our power plant,
is in the reclamation stage. Fuel at U.S. Coal is purchased primarily from external suppliers in the Powder River Basin and delivered
by rail. The delivered cost of fuel per MWh for 2016 is expected to decrease by approximately three per cent due to lower diesel
surcharge costs on coal deliveries.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The value of coal inventories is assessed for impairment
at the end of each reporting period.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Most of our generation from gas is sold under contracts with pass-through provisions for fuel.
For gas generation with no pass-through provision, we typically purchase natural gas from outside companies coincident with production,
thereby minimizing our risk to changes in prices.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">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.</FONT></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left; background-color: White">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left; background-color: White"></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Energy Marketing</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">EBITDA from our Energy Marketing Segment is affected by
prices and volatility in the market, overall strategies adopted, and changes in regulation and legislation. We continuously monitor
both the market and our exposure to maximize earnings while still maintaining an acceptable risk profile. Our 2016 objective for
Energy Marketing is to contribute between $60 million to $80 million in gross margin for the year. Gross margin in the first quarter
was in line with our expectations.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Exposure to Fluctuations in Foreign Currencies</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.1pt">Our strategy is to
minimize the impact of fluctuations in the Canadian dollar against the US dollar 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 partly offset our net foreign-denominated revenues.</FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Net Interest Expense</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Net interest expense for 2016 is expected to be lower than
in 2015 primarily due to higher capitalized interest. However, changes in interest rates and in the value of the Canadian dollar
relative to the US dollar can affect the amount of net interest expense incurred. Most of our debt is at fixed interest rates.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Liquidity
and Capital Resources</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">We expect to maintain adequate available liquidity under
our committed credit facilities. Free cash flows generated by the business should be sufficient to support the construction of
the South Hedland power station in 2016.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Income Taxes</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The effective tax rate on earnings, excluding non-comparable
items for 2016, is expected to be approximately 10 to 15 per cent, which is lower than the statutory tax rate of 27 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>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><I>&nbsp;</I></P>


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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">Capital Expenditures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our major projects are focused on sustaining our current
operations and supporting our growth strategy.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Growth and Major Project Expenditures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">A summary of the significant growth and major projects that
are in progress 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 Times New Roman, Times, 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 colspan="2" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total Project</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2016</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Target</b></font></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></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;</b></font></td>
    <td style="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Estimated spend</b></font></td>
    <td style="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Spent to date<sup>(1)</sup></b></font></td>
    <td style="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td style="width: 10%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Estimated spend</b></font></td>
    <td style="width: 12%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>completion</b></font><br>
<font style="font: 8pt Whitney Book"><b>date</b></font></td>
    <td style="width: 2%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 40%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Details</b></font></td></tr>
<tr>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Project</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr>
    <td 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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td 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 style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">South Hedland power station<sup>(2)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">593</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">274</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">119</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Q2 2017</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">150 MW combined cycle power plant</font></td></tr>
<tr>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Solomon load bank facility<sup>(3)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">2</font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Q2 2016</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Installation of 20 MW load bank facility required to complete the Solomon power station</font></td></tr>
<tr>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Transmission</font></td>
    <td nowrap colspan="2" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Not applicable</font><font style="font: 9pt Whitney Book"><sup> (4)</sup></font></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; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">13</font></td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Ongoing</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Regulated transmission that receives a return on investment</font></td></tr>
<tr>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>598</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>276</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>135</b></font></td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="border-top: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
</table>
<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><SUP>[12][13][14][15]</SUP></P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Sustaining and Productivity Expenditures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">A significant portion of our sustaining and productivity
capital is planned major maintenance, which includes inspection, repair and maintenance of existing components, and the replacement
of existing components. Planned major maintenance costs are capitalized as part of property, plant, and equipment and are amortized
on a straight-line basis over the term until the next major maintenance event. It excludes amounts for day-to-day routine maintenance,
unplanned maintenance activities, and minor inspections and overhauls, which are expensed as incurred.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our estimate for total sustaining and productivity capital
is allocated among the following:</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Category</b></font></td>
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Description</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book"><b>Spent to </b></font><br>
<font style="font: 8pt Whitney Book"><b>date</b></font><b><font style="font: 10.5pt Whitney Book"><sup>(1)</sup></font></b></td>
    <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Expected </b></font><br>
<font style="font: 8pt Whitney Book"><b>spend </b></font><br>
<font style="font: 8pt Whitney Book"><b>in 2016</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 26%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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 Whitney Book">Routine capital<sup>(5)</sup></font></td>
    <td colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Capital required to maintain our existing generating capacity</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">100 - 105</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 Whitney Book">Planned major maintenance</font></td>
    <td colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Regularly scheduled major maintenance</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">46</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">155 - 165</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 Whitney Book">Mine capital</font></td>
    <td colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Capital related to mining equipment and land purchases</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt; text-indent: 8pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">30 - 35</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 Whitney Book">Finance leases</font></td>
    <td colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Payments on finance leases</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">15 - 20</font></td></tr>
<tr>
    <td nowrap style="vertical-align: bottom; border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total sustaining capital excluding flood-recovery capital</b></font></td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: top; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>59</b></font></td>
    <td nowrap style="vertical-align: top; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>300 - 325</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Flood-recovery capital</font></td>
    <td colspan="4" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Capital arising from the 2013 Alberta flood</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td>
    <td nowrap style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5</font></td></tr>
<tr>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total sustaining capital </b></font></td>
    <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="vertical-align: top; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>59</b></font></td>
    <td nowrap style="vertical-align: top; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>305 - 330</b></font></td></tr>
<tr>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Productivity capital</font></td>
    <td colspan="4" style="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Projects to improve power production efficiency and </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;corporate improvement initiatives</font></td>
    <td nowrap style="vertical-align: bottom; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </font></td>
    <td nowrap style="vertical-align: bottom; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">10 - 15</font></td></tr>
<tr>
    <td nowrap colspan="4" style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total sustaining and productivity capital</b></font></td>
    <td nowrap style="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="vertical-align: top; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>59</b></font></td>
    <td nowrap style="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>315 - 345</b></font></td></tr>
</table>
<P STYLE="color: white; font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><SUP>[16</SUP></P>

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

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(1) As at March 31,
2016.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) Estimated project
spend is AUD$570 million. Total estimated project spend is stated in CAD$ and includes estimated capital interest costs. The total
estimated project spend may change due to fluctuation in foreign exchange rates.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(3) Includes certain
natural gas conversion costs at the Solomon power station that will be recognized as a finance lease receivable. The total estimated
project spend may change due to fluctuations in foreign exchange rates.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(4) Transmission projects
are aggregated and develop on an ongoing basis. Consequently, discrete project spend is not available.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(5) <FONT STYLE="letter-spacing: -0.1pt">Includes
hydro life extension spend.</FONT></P>



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

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corporation/Q1 2016</FONT> <B>M27</B></P>



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

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Planned major outages for 2016 include full major turnarounds
of two Canadian Coal units that we operate, and two that our partners operate. During the first quarter, we replaced one planned
full scope major turnaround with limited scope major turnaround work on two units that we operate. Our planned outages also includes
significant work at our hydro facilities, including a stator/generator replacement.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">One of our partners completed a major turnaround of one
Canadian Coal unit that we do not operate in the first quarter of 2016, and in April we completed the planned outage of a second
unit that we operate. The two limited scope turnaround projects were also completed in the first quarter. As a result, we now have
only one more planned major outage at the Canadian Coal facilities that we operate for the rest of this year, and one at units
that our partners operate.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the first quarter of 2016, we reduced our estimate
of sustaining capital expenditures for the full year from our previous estimate by approximately $25 million, to reflect the reduced
scope of a major turnaround, deferral of the Ghost river diversion project to a subsequent year, and other savings and deferrals.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Lost production as a result of planned major maintenance,
excluding planned major maintenance for U.S. Coal, which is scheduled during a period of economic dispatching, and limited-scope
major maintenance projects executed during unplanned outages, is estimated as follows for 2016:</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td nowrap style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 12%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 21%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Coal</b></font></td>
    <td style="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Gas and Renewables</b></font></td>
    <td style="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Total</b></font></td>
    <td style="width: 13%; border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Arial, Helvetica, Sans-Serif"><b>Lost to </b></font><br>
<font style="font: 8pt Arial, Helvetica, Sans-Serif"><b>date<sup>(1)</sup></b></font></td></tr>
<tr style="vertical-align: bottom">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">GWh lost</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">825 - 835</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">135 - 145</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">960 - 980</font></td>
    <td style="border-bottom: Black 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">357</font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">The reduction in estimated lost production from previous
estimates is attributable to the reduced maintenance activities described above.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">Financing</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Financing for these capital expenditures is expected to
be provided by cash flow from operating activities. We have access to approximately $1.5 billion in liquidity, if required. The
funds required for committed growth, sustaining capital, and productivity projects are not expected to be significantly impacted
by the current economic environment.</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt"><FONT STYLE="font-style: normal; letter-spacing: -0.1pt">(1</FONT><FONT STYLE="letter-spacing: -0.1pt">)
As at March 31, 2016.</FONT></P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>


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corporation/Q1 2016</FONT></P>


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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left"><FONT STYLE="text-transform: none; letter-spacing: 0pt"><B>Accounting
Changes </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: bold 11pt/12pt Archer Book; margin: 0; text-align: left">A. Current Accounting Changes</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">I. Operating and Reportable Segments</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Beginning this quarter, we have chosen to disaggregate presentation
of the Gas reportable segment into its two operating segments, Canadian Gas and Australian Gas. Previously included legacy costs
of the non-operating U.S. Gas function have been re-allocated to U.S. Coal to align with management&rsquo;s internal monitoring
practices. Comparative segmented results for 2015 have been restated to align with separate reporting of the two segments and the
reallocation of the non-operating costs.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/normal Whitney Semibold; margin: 0; text-align: left">II. Restatement of a Prior Quarter</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the fourth quarter of 2015, we restated the statement
of earnings of the first quarter of 2015, to increase<BR>
non-comparable deferred tax expense by $47 million. As a result, net earnings attributable to common shareholders of the first
quarter of 2015 has decreased from $7 million to a net loss of $40 million. The adjustment is due to the correction of the tax
basis of an internally transferred asset as part of the reorganization of companies giving effect to the sale of an economic interest
in Australian Assets to TransAlta Renewables which closed during the second quarter of 2015. Comparative information of the first
quarter of 2015 presented in this document has been adjusted accordingly.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">B. Future Accounting Changes</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Accounting standards that have been previously issued by
the IASB but are not yet effective, and have not been applied include IFRS 9 <I>Financial Instruments</I>, IFRS 15 <I>Revenue from
Contracts with Customers, </I>and IFRS 16 <I>Leases</I>. Refer to <I>Note 3</I> of the most recent annual consolidated financial
statements for information regarding the requirements of IFRS 9, IFRS 15, and<BR>
IFRS 16.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M29</B></P>


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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Selected Quarterly Information</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Our results are seasonal due to the nature of the electricity
market and related fuel costs. Higher maintenance costs are usually incurred in the spring and fall when electricity prices are
expected to be lower, as electricity prices generally increase in the peak winter and summer months in our main markets due to
increased heating and cooling loads. Margins are also typically impacted in the second quarter due to the volume of hydro production
resulting from spring runoff and rainfall in the Pacific Northwest, which impacts production at U.S. Coal. Typically, hydro facilities
generate most of their electricity and revenues during the spring months when melting snow starts feeding watersheds and rivers.
Inversely, wind speeds are historically greater during the cold winter months and lower in the warm summer months.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 33%; 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 nowrap style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q2 2015</font></td>
    <td nowrap style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q3 2015</font></td>
    <td nowrap style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q4 2015</font></td>
    <td nowrap style="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>Q1 2016</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</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"><font style="font: 8pt Whitney Book">Revenues</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">438</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">641</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">595</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>568</b></font></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"><font style="font: 8pt Whitney Book">Comparable EBITDA</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">183</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">219</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">268</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>279</b></font></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"><font style="font: 8pt Whitney Book">Comparable FFO</font></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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">160</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">126</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">243</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>196</b></font></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"><font style="font: 8pt Whitney Book">Net earnings (loss) attributable to common shareholders</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(131)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">154</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(7)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>62</b></font></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"><font style="font: 8pt Whitney Book">Comparable net earnings (loss) attributable to common shareholders</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(44)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(33)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">3</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>14</b></font></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"><font style="font: 8pt Whitney Book">Net earnings (loss) per share attributable to common shareholders, </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;basic and diluted<sup>(1)</sup></font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.47)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">0.55</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.02)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>0.22</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable net earnings (loss) per share, basic and diluted<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.16)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.12)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">0.01</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>0.05</b></font></td></tr>
<tr style="vertical-align: bottom">
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; 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="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></tr>
<tr style="vertical-align: bottom">
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="background-color: white; 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="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q2 2014</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q3 2014</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q4 2014</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">Q1 2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <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="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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book"><i>*Restated</i></font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-top: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Revenues</font></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; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">491</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">639</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">718</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">593</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 Whitney Book">Comparable EBITDA</font></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; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">213</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">212</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">301</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">275</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 Whitney Book">Comparable FFO</font></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; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">154</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">145</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">225</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">211</font></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"><font style="font: 8pt Whitney Book">Net earnings (loss) attributable to common shareholders</font></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; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(50)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(6)</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">148</font></td>
    <td nowrap style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(40)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable net earnings (loss) attributable to common shareholders</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(12)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(13)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">46</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">26</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Net earnings (loss) per share attributable to common shareholders, </font><br>
<font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;basic and diluted<sup>(1)</sup></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.18)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.03)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">0.54</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.14)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="3" style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Comparable net earnings (loss) per share, basic and diluted<sup>(1)</sup></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.04)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">(0.05)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">0.17</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; line-height: 18pt"><font style="font: 8pt Whitney Book">0.09</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><i>* See Accounting Changes for restatement.</i></font> </td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td 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="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td colspan="8" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book"><i>(1) Basic and diluted earnings per share attributable to common shareholders and comparable earnings per share are calculated each period using </i></font><br>
<font style="font: 8pt Whitney Book"><i>&nbsp;&nbsp;&nbsp;&nbsp;the weighted average common shares outstanding during the period. As a result, the sum of the earnings per share for the four quarters making </i></font><br>
<font style="font: 8pt Whitney Book"><i>&nbsp;&nbsp;&nbsp;&nbsp;up the calendar year may sometimes differ from the annual earnings per share.</i></font></td></tr>
</table>
<P STYLE="font: 8pt/150% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Comparable net earnings, comparable EBITDA, and comparable
FFO are generally higher in the first and fourth quarters due to higher demand associated with winter cold in the markets in which
we operate and lower planned outages. Market volatility can also impact quarterly contributions from our Energy Marketing Segment.
Following sales of non-controlling interest in TransAlta Renewables in the second quarter of 2015, the fourth quarter of 2015,
and the first quarter of 2016, an increasing portion of earnings is attributable to non-controlling interests.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Revenues are impacted by market and operational factors
listed above, and by changes in future power prices in the Pacific Northwest, which cause de-designated and economic hedges in
the region to fluctuate in value. These hedges significantly depreciated in the second quarter of 2014 and first half of 2015,
and significantly increased in value in the second half of 2014 over the third quarter of 2015. Revenues in the fourth quarter
of 2015 was also impacted by a significant increase to a provision related to Force Majeure events associated mostly to prior years.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT></P>


</TD></TR></TABLE></DIV>
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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Net earnings attributable to common shareholders have also
been impacted by the following variations and events:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">gain on disposal of assets, following the Poplar Creek contract restructuring in the third quarter
of 2015;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">MSA provision in the third quarter of 2015;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">writedown of deferred tax assets in the second quarter of 2014, a recovery in the fourth quarter
of 2014, a recovery in the third quarter of 2014, and a recovery in the first quarter of 2016;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">change in income tax rates in Alberta in the second quarter of 2015;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">deferred income tax impacts of the sale of an economic interest in Australian assets to TransAlta
Renewables transaction in the first and second quarters of 2015; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 9pt/12pt Whitney Book; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#167;</FONT></TD><TD STYLE="text-align: justify">effects of non-comparable unrealized losses on intercompany financial instruments that are attributable
only to the<BR>
non-controlling interests in the first quarter of 2016.</TD></TR></TABLE>

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

<P STYLE="font: bold 11pt/12pt Archer Book; margin: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Disclosure<FONT STYLE="text-transform: uppercase; letter-spacing: 1.5pt">
</FONT>Controls and Procedures</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">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 Securities Exchange Act of 1934,<I> </I>as
amended (&ldquo;Exchange Act&rdquo;) are recorded, processed, summarized, and reported within the time periods specified in the
rules and forms of the U.S. 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">During the first quarter of 2016, we completed the implementation
of a new energy trading and risk management system. In connection with the implementation, we updated the processes that constitute
our internal control over financial reporting, as necessary, to accommodate related changes to our business processes and accounting
procedures.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">Except as otherwise described above, there have been no
other changes in our internal control over financial reporting during the three months ended March 31, 2016, 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, 2016, 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>


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corporation/Q1 2016</FONT> <B>M31</B></P>



</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Supplemental Information</P>

<P STYLE="color: white; font: 8pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: left"><SUP>(<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">[17]</FONT>)(2)(<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">[18]</FONT>)</SUP></P>

<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="width: 59%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 6%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 1%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>March 31, 2016</b></font></td>
    <td nowrap style="width: 18%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">Dec. 31, 2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Closing market price (TSX) ($)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>6.04</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4.91</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Price range for the last 12 months (TSX) ($)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">High</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>12.34</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">12.34</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Low</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3.76</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4.13</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Adjusted net debt to invested capital<sup>(1) </sup>(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>51.6</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">54.6</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Adjusted net debt to invested capital excluding non-recourse debt<sup>(1)</sup> (%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>46.9</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">50.2</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Adjusted net debt to comparable EBITDA</font><font style="font: 9pt Whitney Book"><sup>(1, 2)</sup></font><font style="font: 8pt Whitney Book"> (times)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4.6</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">5.0</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Return on equity attributable to common shareholders</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font><font style="font: 8pt Whitney Book">(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3.7</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1.2)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Comparable return on equity attributable to common shareholders</font><font style="font: 9pt Whitney Book"><sup>(1, 2)</sup></font><font style="font: 8pt Whitney Book">(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.8)</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.3)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Return on capital employed</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font><font style="font: 8pt Whitney Book">(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>5.2</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">4.6</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Comparable return on capital employed</font><font style="font: 9pt Whitney Book"><sup>(1, 2)</sup></font><font style="font: 8pt Whitney Book">(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>2.8</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3.0</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Earnings coverage</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font><font style="font: 8pt Whitney Book">(times)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>1.6</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">1.5</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt"><font style="font: 8pt Whitney Book">Dividend payout ratio based on comparable funds from operations<sup>(1, 2, 3)</sup>(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>23.5</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">28.3</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Dividend coverage</font><font style="font: 10.5pt Whitney Book"><sup>(2,3)</sup></font><font style="font: 8pt Whitney Book">(times)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>4.5</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3.6</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Dividend yield</font><font style="font: 10.5pt Whitney Book"><sup>(2,3)</sup></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>11.9</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">14.7</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Adjusted comparable FFO to adjusted net debt</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font><font style="font: 8pt Whitney Book">(%)</font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>16.2</b></font></td>
    <td nowrap style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">15.2</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt; font-size: 12pt"><font style="font: 8pt Whitney Book">Comparable FFO before interest to adjusted interest coverage</font><font style="font: 9pt Whitney Book"><sup>(2)</sup></font><font style="font: 8pt Whitney Book">(times)</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; line-height: 18pt">&nbsp;</td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book"><b>3.7</b></font></td>
    <td nowrap style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; line-height: 18pt"><font style="font: 8pt Whitney Book">3.8</font></td></tr>
</table>
<P STYLE="font: 12pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: left">&nbsp;&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">Ratio Formulas</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Adjusted net debt to invested capital</B> = long-term
debt and finance lease obligations including current portion and fair value (asset) liability of hedging instruments on debt +
50 per cent issued preferred shares - cash and cash equivalents / adjusted net debt + non-controlling interests + equity attributable
to shareholders - 50 per cent issued preferred shares</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Adjusted net debt to comparable EBITDA</B> = long-term
debt and finance lease obligations including current portion and fair value (asset) liability of hedging instruments on debt -
cash and cash equivalents + 50 per cent issued preferred shares / comparable EBITDA&#9;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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 / equity attributable to common shareholders
excluding AOCI</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><FONT STYLE="font-size: 7pt"><I>(<FONT STYLE="font-family: Whitney Light; color: black"><B>1</B></FONT>)
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&rsquo;s reported financial performance or position as presented in accordance with IFRS. These
ratios are useful complementary measurements for assessing the Corporation&rsquo;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 these calculations, refer to the Non-IFRS Measures section of this MD&amp;A.</I></FONT></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(2) Last 12 months.</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">&nbsp;</P>

<P STYLE="font: italic 7pt/9pt Whitney Light; margin: 0 0 0 7.1pt; text-align: justify; text-indent: -7.1pt">(3) On Jan. 14, 2016,
we revised our dividend to $0.16 per common share on an annualized basis from $0.72 previously. The effect of the change is not
reflected in these historical ratios.</P>



<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

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corporation/Q1 2016</FONT></P>


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<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

<P STYLE="font: 9pt/12pt Whitney Book; 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 / invested capital excluding AOCI</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Earnings coverage</B> = net earnings attributable to
shareholders + income taxes + net interest expense / interest on debt + 50 per cent dividends paid on preferred shares - interest
income</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Dividend payout ratio</B> = dividends declared per common
/ funds from operations - 50 per cent dividends paid on preferred shares</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Dividend yield</B> = dividend paid per common share /
current period&rsquo;s closing market price</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Adjusted comparable funds from operations to adjusted
net debt</B> = comparable funds from operations - 50 per cent dividends paid on preferred shares / period end long-term debt and
finance lease obligations including fair value (asset) liability of hedging instruments on debt + 50 per cent issued preferred
shares - cash and cash equivalents</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Comparable funds from operations before interest to adjusted
interest coverage</B> = comparable funds from operations + interest on debt - interest income - capitalized interest / interest
on debt + 50 per cent dividends paid on preferred shares - interest income</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 14pt/14pt Archer Book; margin: 0; text-align: left">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: 9pt/12pt Whitney Book; 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Capacity</B> - The rated continuous load-carrying ability,
expressed in megawatts, of generation equipment.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Force Majeure </B>-<B> </B>Literally means &ldquo;greater
force&rdquo;. 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Gigawatt</B> - A measure of electric power equal to 1,000
megawatts.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Megawatt (MW)</B> - A measure of electric power equal
to 1,000,000 watts.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; 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 buyers.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Specified Gas Emitters Regulation (SGER)</B> - Rules
under the&nbsp;Alberta Climate Change and Emissions Management Act which lays out emission intensity reduction targets for specified
entities and guidelines for achieving compliance.</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"><B>Unplanned Outage</B> - The shut down of a generating
unit due to an unanticipated breakdown.</P>


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corporation/Q1 2016</FONT> <B>M33</B></P>



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

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><IMG SRC="image_003.jpg" ALT=""></P>

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

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>TransAlta Corporation</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">110 - 12th Avenue S.W.</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Box 1900, Station &ldquo;M&rdquo;</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Calgary, Alberta Canada T2P 2M1</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Phone </B></P>

<P STYLE="font: 9pt/150% Whitney Book; 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: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Website</B></P>

<P STYLE="font: 9pt/150% Whitney Book; 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: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>CST Trust Company</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">P.O. Box 700 Station &ldquo;B&rdquo;</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Montreal, Qu&eacute;bec Canada H3B 3K3</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Phone </B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Toll-free in North America: 1.800.387.0825</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Toronto or outside North America: 416.682.3860</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Fax </B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">514.985.8843</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>E-mail</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">inquiries@canstockta.com</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Website </B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">www.canstockta.com</P>

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

<P STYLE="font: 9pt/150% Whitney Book; 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: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Media and Investor Inquiries</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">Investor Relations</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Phone</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">1.800.387.3598 in Canada and United States</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">or 403.267.2520</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>Fax</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">403.267.7405</P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify"><B>E-mail</B></P>

<P STYLE="font: 9pt/150% Whitney Book; margin: 0; text-align: justify">investor_relations@transalta.com</P>

<P STYLE="font: 9pt/12pt Whitney Book; margin: 0; text-align: justify"></P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>ex311.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
<TEXT>
<HTML>
<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<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: 11pt 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></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in">&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: 0.5in"></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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><U></U></TD>
    <TD STYLE="width: 50%"><U>/s/ Dawn L. Farrell</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;Dated May 3, 2016</TD>
    <TD>Dawn L. Farrell</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">President and Chief Executive Officer</P></TD></TR></TABLE>


</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>ex312.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
<TEXT>
<HTML>
<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<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: 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, Donald Tremblay, 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; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%"><U>/s/ Donald Tremblay</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;Dated May 3, 2016</TD>
    <TD>Donald Tremblay</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR>
</TABLE>



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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>ex321.htm
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER REGARDING PERIODIC REPORT CONTAINING FINANCIAL STATEMENTS.
<TEXT>
<HTML>
<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0.25in 12pt 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>

<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: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(i)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">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</FONT></TD></TR></TABLE>

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

<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; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><U></U></TD>
    <TD STYLE="width: 50%"><U>&#9;/s/ Dawn L. Farrell</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;Dated May 3, 2016</TD>
    <TD>Dawn L. Farrell</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>President and Chief Executive Officer</TD></TR></TABLE>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>ex322.htm
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER REGARDING PERIODIC REPORT CONTAINING FINANCIAL STATEMENTS.
<TEXT>
<HTML>
<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<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>

<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: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD STYLE="text-align: justify">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</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 211.5pt; text-align: justify; 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; font: 10pt Times New Roman, Times, Serif; width: 100%"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 50%"></TD>
    <TD STYLE="width: 50%"><U>/s/ Donald Tremblay</U></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;Dated May 3, 2016</TD>
    <TD>Donald Tremblay</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR></TABLE>


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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>8
<FILENAME>newsrelease.htm
<DESCRIPTION>PRESS RELEASE DATED MAY 3, 2015.
<TEXT>
<HTML>
<HEAD>
     <TITLE>JA Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font-size: 14pt; width: 100%">
<tr style="vertical-align: top; text-align: left">
    <TD STYLE="vertical-align: bottom; text-align: left; width: 50%">&nbsp;<img src="image_001.jpg" alt="" style="width: 236px; height: 60px"></td>
    <TD STYLE="width: 50%">
        <P>&nbsp;</P>
        <P STYLE="font: 30pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: right">News
        Release</P></td></tr>
<tr style="vertical-align: top; text-align: left">
    <TD STYLE="border-bottom: rgb(0,204,255) 2pt solid">&nbsp;</td>
    <TD STYLE="border-bottom: rgb(0,204,255) 2pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top; text-align: left">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td></tr>
</TABLE>

<P STYLE="font: 14pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 14pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TransAlta Reports First Quarter 2016
Results</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>CALGARY, Alberta (May 3, 2016)</B>
&#8211; TransAlta Corporation (&#8220;TransAlta&#8221; or the &#8220;Company&#8221;) (TSX: TA; NYSE: TAC) today reported first
quarter 2016 comparable EBITDA<SUP>([1])</SUP> of $279 million and comparable FFO<SUP>(1)</SUP> of $196 million, in line with expectations
and tracking to the guidance provided for 2016. Comparable EBITDA increased by $4 million compared to the same period in 2015 with
all segments other than U.S. Coal delivering similar or improved results over last year. Power prices in Alberta were at historic
low levels during the quarter and impacted our hydro and wind assets in the province. The impact of lower prices on our coal facilities
was mostly mitigated by our high level of contracts and hedges. Cost reduction initiatives and contributions from renewables assets
acquired last year also offset the impact of lower prices in Alberta. Comparable FFO for the quarter decreased by $15 million compared
to the same period in 2015. Last year, comparable FFO was positively impacted by realized currency gains.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&#8220;We delivered strong operational
and financial performance in the first quarter this year despite persisting low prices in Alberta and the Pacific Northwest. We
remain on track to achieve our guidance ranges for 2016 as previously disclosed,&#8221; said Dawn Farrell, President and Chief
Executive Officer. &#8220;We believe the operating and financial steps taken in 2015, along with our commitment to work with the
provincial government to secure a mutually beneficial coal transition arrangement, provide a solid foundation and have positioned
the Company for the future. We continue to focus on supporting a transition that works for all stakeholders while maintaining maximum
financial flexibility and benefiting from growth in gas-fired and renewable generation as we transition to clean power.&#8221;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter, we repaid the balance
on our credit facilities of approximately $315 million through a combination of cash flows from operations and cash proceeds received
from TransAlta Renewables for its purchase of economic interests in certain Canadian assets completed in January. The strengthening
of the Canadian dollar at the end of March also contributed to the reduction in debt balances from December.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><B>First Quarter Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">Continued to advance the construction of
the South Hedland power project. The bulk of the major equipment has arrived at site. We continue to expect the project to be delivered
on schedule and on budget in mid-2017.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">On Jan. 14, 2016, we revised our dividend
to $0.16 per common share on an annualized basis from $0.72 previously, and suspended our dividend reinvestment plan. As a result,
our annual dividend payments going forward will
be approximately $46 million, down from $205 million, increasing our financial flexibility.</FONT></TD></TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">On March 16, 2016, the Alberta Government
appointed Terry Boston, the former CEO of North America&#8217;s largest power system, as Coal Phase-out Facilitator to lead discussions
on coal transition as part of the Climate Leadership Plan. Discussions with the coal-fired generators, including TransAlta, are
now in progress.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">At March 31, 2016, we had a total of $2.1
billion of committed credit facilities, of which $1.5 billion was available, compared to $1.3 billion as at December 31, 2015.
The $0.6 billion of credit utilized under these facilities was comprised entirely of letters of credit. We are in compliance with
the terms of the credit facilities and all undrawn amounts are fully available. These facilities are comprised of a $1.5 billion
committed syndicated bank facility expiring in 2019, and four bilateral credit facilities expiring in 2017. We anticipate renewing
these facilities, based on reasonable commercial terms, prior to their maturities. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">During the quarter, TransAlta&#8217;s 12
million Series A Preferred Shares reached their first reset date. Approximately 10.2 million shares will now pay fixed dividends
of nearly $0.68 per share annually until their next reset date in 2021 (down from $1.15 per share) and approximately 1.8 million
shares were converted into Series B Preferred Shares, which currently pay dividends of approximately $0.62 per share (down from
$1.15 per share) on an annualized basis, adjusted quarterly. The declaration of dividends remains subject to approval by the Board
of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0"><I>(1) These 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 Comparable FFO and Comparable FCF and Earnings and Other Measures on a Comparable
Basis sections of this quarter&rsquo;s MD&amp;A for further discussion of these items, including, where applicable, reconciliations
to measures calculated in accordance with IFRS.</I></P>





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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.5in; text-align: justify"></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.3pt 0 0; text-align: center"><B>First Quarter 2016 Review
by Segment</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: #DCE6F1">
    <TD ROWSPAN="2" STYLE="border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>Comparable EBITDA</B></FONT><BR>
<FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>(in CAD$ millions)</B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>3 Months Ended</B></FONT></TD></TR>
<TR STYLE="background-color: #DCE6F1">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>March&nbsp;&nbsp;31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>March 31, 2015</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 46%; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Canadian Coal</FONT></TD>
    <TD NOWRAP STYLE="width: 28%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">103</FONT></TD>
    <TD NOWRAP STYLE="width: 26%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">95</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">U.S. Coal<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">(4)</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">22</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Canadian Gas<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">65</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">57</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Australian Gas<SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">31</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">27</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Wind and Solar</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">61</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">55</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Hydro</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">18</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">14</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Energy Marketing </FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">23</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">23</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Corporate</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">(18)</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">(18)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>Total Comparable EBITDA</B></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>279</B></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>275</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Canadian Coal:</U> Comparable EBITDA
in the first quarter was $103 million, $8 million higher than the same period last year as cost reductions and effective hedging
strategies have offset lower prices on uncontracted generation. Availability was also higher than last year.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>U.S.
                                         Coal:</U> Comparable EBITDA was a $4 million loss for the quarter, down $26 million compared
                                         to the same period in 2015 due to lower realized prices and mark-to-market losses </FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif">on
                                         financial contracts put in place to hedge our future generation. The first quarter of
                                         2015 benefited from higher price hedges entered into in a higher price environment in
                                         2014.</FONT></TD></TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Canadian Gas:</U> Comparable EBITDA increased
by $8 million during the first quarter to $65 million compared to the same period in 2015. Last year&#8217;s results included $4
million of unrealized mark-to-market losses on our gas, compared to a gain of $3 million this quarter.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Australian Gas:</U> Comparable EBITDA
increased by $4 million during the first quarter compared to the same period in 2015, due to additional revenues from the natural
gas pipeline that was commissioned in late March 2015.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Wind and Solar:</U> Comparable EBITDA
increased $6 million during the quarter, compared to the same period in 2015, due to the contribution of projects with a combined
capacity of 136 MW acquired during the second half of 2015. Higher generation from the portfolio caused by stronger wind resources
compared to last year offset the impact of lower prices in Alberta.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Hydro:</U> Comparable EBITDA increased
by $4 million to $18 million, primarily due to an adjustment of prior year production volumes and cost reduction initiatives.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Energy Marketing:</U> Comparable EBITDA
remained consistent with 2015.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 12pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><U>Corporate:</U> Our Corporate overhead
costs during the quarter have remained similar to 2015, as our cost reductions were offset by reduced allocations to our business
segments.</FONT></TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0"><I>(1) Beginning this quarter, we have chosen to disaggregate presentation
of the Gas reportable segment into its two operating segments, Canadian Gas and Australian Gas. Previously included legacy costs
of the non-operating U.S. Gas function have been re-allocated to U.S. Coal to align with management&rsquo;s internal monitoring
practices. Comparative segmented results for 2015 have been restated to align with separate reporting of the two segments and
the reallocation of the non-operating costs.</I></P>





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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><B>Consolidated Financial Review
</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">Comparable EBITDA for the quarter totaled
$279 million, up slightly from $275 million in the same period last year with all segments other than U.S. Coal delivering similar
or improved levels over last year. Asset acquisitions in 2015 contributed positively to our results in the first quarter of 2016.</P>

<P STYLE="font: 12pt/115% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">Comparable FFO for the quarter decreased
by $15 million to $196 million compared to the same period in 2015, mainly due to lower realized foreign exchange gains, and an
increase in long-term receivables, partially offset by a reduction to provisions. Comparable free cash flow decreased by $24 million
as a result of lower comparable FFO and increased non-controlling interest dividend payments associated with the additional shares
issued and sold to non-controlling interests in TransAlta Renewables in 2015 and 2016.</P>

<P STYLE="font: 12pt/115% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter, comparable net earnings
attributable to common shareholders was $14 million ($0.05 net earnings per share), down from comparable net earnings of $26 million
($0.09 net earnings per share) in 2015. The decrease was primarily due to higher earnings attributable to non-controlling interests,
resulting from higher outstanding shares of TransAlta Renewables owned by the public.</P>

<P STYLE="font: 12pt/115% Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">Reported net earnings
attributable to common shareholders<SUP>([3])</SUP> was $62 million ($0.22 net earnings per share) compared to a net loss of
$40 million ($0.14 net loss per share) for the same period in 2015. Last year, net earnings were reduced by a $55 million
income tax charge associated with the sale of an economic interest in our Australia business to TransAlta Renewables and a
negative change in the fair value of de-designated and economic hedges at U.S. Coal. Reported earnings in 2016 includes the
effects of non-comparable unrealized losses on intercompany financial instruments that are attributable only to the
non-controlling interests.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0"><I>(<FONT STYLE="line-height: 115%"><B><SUP></SUP>1</B></FONT>)
2015 restated to reflect prior period correction to tax. Refer to the Accounting Changes section of this quarter&rsquo;s MD&amp;A.</I></P>



<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B></B></P>

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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify"><B>Operating Review </B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">Availability for the quarter,
after adjusting for economic dispatching at U.S. Coal, was 92.3 per cent compared to 91.3 per cent in 2015, as a result of lower
unplanned outages at Canadian Coal.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Production for the three months
ended March 31, 2016 decreased by 1,033 gigawatt hours compared to the same period in 2015, primarily due to the restructuring
of the Poplar Creek contractual arrangement that was completed in late 2015 and low prices in Ontario and the Pacific Northwest.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">Total sustaining capital expenditures
(including flood recovery capital) were $59 million for the quarter compared to $70 million last year. Planned major outages for
2016 include full major turnarounds of two Canadian Coal units that we operate, and two that our partners operate. During the first
quarter, we replaced one planned full scope major turnaround with limited scope major turnaround work on two units that we operate.
Our planned outages also include significant work at our hydro facilities, including a stator/generator replacement. One of our
partners completed a major turnaround of one Canadian Coal unit that we do not operate in the first quarter of 2016, and in April
we completed the planned outage of a second unit that we operate. The two limited scope turnaround projects were also completed
in the first quarter. As a result, we now have only one more planned major outage at the Canadian Coal facilities that we operate
for the rest of this year, and one at units that our partners operate.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">During the first quarter of 2016, we reduced
our estimate of sustaining capital expenditures for the full year from our previous estimate by approximately $25 million, to reflect
the reduced scope of a major turnaround, deferral of the Ghost river diversion project to a subsequent year, and other savings
and deferrals.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 8pt"><I>(1) 2015
restated to reflect prior period correction to tax. Refer to the Accounting Changes section of this quarter&rsquo;s MD&amp;A.</I></FONT></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><B>Recent Events</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Sundance and Sheerness PPA Terminations</U></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the buyers under the
legislated Sundance and Sheerness PPAs announced their intention to transfer their respective obligations under the PPAs to
the Balancing Pool as a result of a Change in Law. The Balancing Pool is presently investigating whether these transfers are
permitted by the terms of the PPAs in the current circumstances and, if so, when the transfers would become effective. The
outcome remains uncertain. If the Balancing Pool confirms the transfers, it will assume the role of the buyers and carry out
the responsibilities of the buyers under the PPAs, including dispatching the generating units and making capacity and energy
payments to TransAlta until the end of the PPA terms. Pursuant to the <I>Electric Utilities Act</I> (Alberta), the Balancing
Pool can also choose to terminate the PPAs after following the requirements of legislation, which would include paying
TransAlta an amount equal to the applicable. closing net book value of the generating units. TransAlta does not presently
expect the transfer of the PPAs to the Balancing Pool to have a material impact on our business.</P>

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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">Credit Ratings Outlook</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">As at March 31, 2016 we maintain
investment grade ratings from three credit rating agencies. During the first quarter of 2016, credit rating agencies DBRS and Fitch
affirmed our investment grade credit rating with negative outlooks. The negative outlook is a reflection of low energy prices and
concerns over coal transition in Alberta. We remain focused on strengthening our financial position by de-leveraging our capital
structure and securing a fair agreement with the Government of Alberta to assist them in their goal to transition the generation
in the province to gas and renewables.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>South Hedland</U></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">We continued to advance the construction
of the South Hedland power project. Major equipment has been arriving on schedule and the bulk of the major equipment has arrived
at site. We continue to expect the project to be delivered on schedule and on budget in mid-2017. When completed, the project is
expected to contribute approximately $80 million of EBITDA annually. Total construction cost for the project is still AUD$570 million
and will be funded by cash generated by the business.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Conversion of Series A Preferred Shares
to Series B Preferred Shares</U></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 17, 2016, 1,824,620 of our 12
million Series A Cumulative Redeemable Fixed Rate Reset Preferred Shares were tendered for conversion, on a one-for-one basis,
into Series B Cumulative Redeemable Floating Rate Preferred Shares. For the next five years, the Series A Shares will pay a fixed
cumulative preferential cash dividend of $0.67725 per share annually (down from $1.15 per share), subject to the Board&#8217;s
dividend declaration. The Series B Shares will pay quarterly floating rate cumulative preferential cash dividends set at the sum
of the 90 day Government of Canada Treasury Bill rate plus 2.03 per cent. The annualized quarterly dividend rate for the Series
B Shares for the 3-month floating rate period for the second quarter 2016 is $0.623 per share.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>First Quarter 2016 Financial
and Operational Highlights</B></P>

<P STYLE="font: 9pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: #DCE6F1">
    <TD ROWSPAN="2" STYLE="border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>In $CAD millions, unless otherwise stated </B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-top: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>3 Months Ended</B></FONT></TD></TR>
<TR STYLE="background-color: #DCE6F1">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>March 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif"><B>March 31, 2015</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="width: 62%; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Adjusted availability (%)<SUP> (1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="width: 19%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">92.3%</FONT></TD>
    <TD NOWRAP STYLE="width: 19%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">91.3%</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Production (GWh) <SUP>(1)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">8,867</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">9,900</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Revenue</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$568</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$593</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable EBITDA</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$279</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$275</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Net earnings (loss) attributable to common shareholders<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$62</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">($40)</FONT></TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable net earnings attributable&nbsp;&nbsp;to common shareholders</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$14</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$26</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable Funds from Operations</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$196</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$211</FONT></TD></TR>
</TABLE>



<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 62%; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Cash Flow from Operating Activities</FONT></TD>
    <TD NOWRAP STYLE="width: 19%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$275</FONT></TD>
    <TD NOWRAP STYLE="width: 19%; border-bottom: Black 1pt solid; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$153</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable Free Cash Flow<SUP> </SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$86</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$110</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Net earnings (loss) per common share attributable to common shareholders<SUP>(2)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.22</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">($0.14)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable net earnings per share</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.05</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.09</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable Funds from Operations per share</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.68</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.76</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Comparable Free Cash Flow per share</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.30</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.40</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">Dividends declared per common share</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.04</FONT></TD>
    <TD NOWRAP STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">$0.18</FONT></TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 8pt"><I>(<FONT STYLE="line-height: 115%"><B>1</B></FONT>)
Adjusted for economic dispatching at U.S. Coal. </I></FONT></P>

<P STYLE="margin: 0"><FONT STYLE="font-size: 8pt"><I>(2) 2015 restated to reflect prior period correction to tax. Refer to the
Accounting Changes section of this quarter&rsquo;s MD&amp;A.</I></FONT></P>

<P STYLE="font: 8pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 8pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><I></I>&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">The complete report for the quarter, including
MD&amp;A and unaudited interim financial statements, as well as our quarterly presentation, will be available on the Investors
section of our website: www.transalta.com.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0"><B>Conference call</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: justify">We will hold a conference call
and webcast at 9:00 a.m. MT (11:00 a.m. ET) today to discuss our first quarter 2016 results. The call will begin with a short address
by Dawn Farrell, President and CEO, and Donald Tremblay, Chief Financial Officer,<B><I> </I></B>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. Please contact the conference operator five minutes prior to the call, noting &quot;TransAlta Corporation&quot; as the
company and &quot;Jaeson Jaman&quot; as moderator.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 4.5pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Dial-in numbers:<BR>
Toll-free North American participants call: 1-800-319-4610<FONT STYLE="font: 12pt/115% Times New Roman, Times, Serif">&nbsp;</FONT></B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Outside of Canada &amp; USA call: 1-604-638-5340</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">A link to the live webcast will be available
on the Investor Centre section of TransAlta&#8217;s website at http://www.transalta.com/powering-investors/events-and-presentations.
If you are unable to participate in the call, the instant replay is accessible at 1-855-669-9658 (Canada and USA toll free) or
1-604-674-8052 (Outside of Canada) with TransAlta pass code 00391 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/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>About TransAlta</I></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><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 wind, hydro, solar, 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 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.
</I></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>For more information about TransAlta,
visit our web site at www.transalta.com or follow us on Twitter @TransAlta.</I></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; border-top: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Cautionary Statement Regarding Forward
Looking Information</I></B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>This news release contains forward-looking
statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words &quot;expect&quot;,
&quot;anticipate&quot;, &quot;continue&quot;, &quot;estimate&quot;, &quot;may&quot;, &quot;will&quot;, &quot;project&quot;, &quot;should&quot;,
&quot;believe&quot;, &quot;plans&quot;, &quot;intends&quot; and similar expressions are intended to identify forward-looking information
or statements. More particularly, and without limitation, this news release contains forward-looking statements and information
relating to: TransAlta&#8217;s business and anticipated future financial performance; our expected strategies and opportunities;
expected comparable EBITDA, comparable FFO and comparable free cash flow ranges for 2016; our annual dividend amount; expected
governmental regulatory regimes and legislation (including the Government of Alberta&#8217;s Climate Leadership Plan) and the timing
of the implementation of such regimes and regulations; our ability to achieve a beneficial outcome in connection with the coal-fired
generation transition being pursued pursuant to the Alberta Climate Leadership Plan; the impact of the transfer of the Alberta
PPAs to the Balancing Pool; our plans and strategies relating to repositioning our capital structure and strengthening our balance
sheet, including as it relates to our ability to renew our credit facilities; and the construction and commissioning of the South
Hedland power project and its expected timing, costs and benefits. By their nature, forward-looking information requires us to
make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking
information will not prove to be accurate and readers are cautioned not to place undue reliance on our forward-looking information
as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets,
expectations, estimates or intentions expressed in the forward-looking information. Some of the factors that could cause such differences
include: operational risks involving our facilities; changes in market prices where we operate; equipment failure and our ability
to carry out repairs in a cost effective and timely manner, including unplanned outages at generating facilities and associated
capital investments; the effects of weather; disruptions in the source of fuels, water or wind required to operate our facilities;
energy trading risks; failure to obtain necessary regulatory approvals in a timely fashion; legislative or regulatory developments
and their impacts, including the outcome of the coal-fired generation transition under the Government of Alberta&#8217;s Climate
Leadership Plan; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets
activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange
rates; inflation levels and commodity prices; general economic conditions in the geographic areas where we operate; deterioration
of credit markets; and impediments to the construction of South Hedland. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect TransAlta&#8217;s expectations only as of the date of this news release. TransAlta disclaims
any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.</I></P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>For more information:</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt; width: 52%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Investor
    Inquiries:</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; width: 3%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt; width: 45%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Media
    Inquiries:</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Jaeson Jaman</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><P STYLE="margin: 0">Stacey Hatcher</P>


</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Manager, Investor Relations</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Manager, Communications</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phone: 1-800-387-3598 in Canada and U.S.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phone: Toll-free media number: 1-855-255-9184</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Email: <FONT STYLE="color: blue">investor_relations@transalta.com</FONT></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 10pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Email: ta_media_relations@transalta.com</FONT></TD></TR>
</TABLE>

</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><I></I></P>

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