<SEC-DOCUMENT>0001279569-18-000968.txt : 20180508
<SEC-HEADER>0001279569-18-000968.hdr.sgml : 20180508
<ACCEPTANCE-DATETIME>20180508101513
ACCESSION NUMBER:		0001279569-18-000968
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20180508
FILED AS OF DATE:		20180508
DATE AS OF CHANGE:		20180508

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:		18813312

	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>transalta6k.htm
<DESCRIPTION>FORM 6-K
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<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT><FONT STYLE="font-size: 14pt">UNITED
STATES</FONT><BR>
<FONT STYLE="font-size: 14pt">SECURITIES AND EXCHANGE COMMISSION</FONT><BR>
<FONT STYLE="font-size: 12pt">Washington, D.C. 20549</FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><FONT STYLE="font-size: 18pt"><B>FORM
6-K</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><FONT STYLE="font-size: 12pt"><B>REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 24pt">For the month of May 2018</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 24pt"><B>TRANSALTA
CORPORATION</B></FONT></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 24pt"><B></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt">(Translation
of registrant&rsquo;s name into English)</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>110-12<SUP>th
</SUP>Avenue S.W., Box 1900, Station &ldquo;M&rdquo;, Calgary, Alberta, T2P 2M1</B></FONT></P>

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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><FONT STYLE="font-size: 10pt">(Address
of principal executive offices)</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt"><FONT STYLE="font-size: 10pt">I<FONT STYLE="font-family: Times New Roman, Times, Serif">ndicate
by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.</FONT></FONT></P>

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<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form 20-F &#9744;</FONT></TD>
    <TD STYLE="width: 50%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form 40-F &#9746;</FONT></TD></TR>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">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: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____</P>



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

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

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


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">I</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The document listed below as Exhibit 99.1 to this Form 6-K is a
copy of the Registrant&rsquo;s news release dated May 8, 2018 announcing &ldquo;TransAlta Reports First Quarter 2018 Results&rdquo;.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This news release is being furnished, not filed,
and will not be incorporated by reference into any registration statement filed by TransAlta Corporation under the Securities Act
of 1933, as amended.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

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

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    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font: 12pt Times New Roman, Times, Serif; text-indent: 0in"><FONT STYLE="font-size: 10pt"><A HREF="ex991.htm">99.1</A></FONT></TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-size: 10pt"><A HREF="ex991.htm">&ldquo;TransAlta Reports First Quarter 2018 Results&rdquo;</A></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt 40.5pt; text-indent: 0in">&nbsp;</P>

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



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center"><B>Signatures</B></P>

<P STYLE="font: 10pt 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: 10pt Times New Roman, Times, Serif; margin: 0 0 24pt"></P>

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    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TransAlta
                                         Corporation</B></FONT></P>


</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 43%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD>
    <TD STYLE="width: 57%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:
    &nbsp;<I><U>/s/ Donald Tremblay</U></I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Donald Tremblay</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 24pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</FONT></TD></TR>
</TABLE>


<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 6pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 6pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
May 8, 2018</FONT></P>



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

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-indent: 0in"><B>EXHIBIT INDEX</B></P>

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    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; font: 12pt Times New Roman, Times, Serif; text-indent: 0in"><FONT STYLE="font-size: 10pt"><A HREF="ex991.htm">99.1</A></FONT></TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-left: 5.4pt; font: 12pt Times New Roman, Times, Serif; text-align: justify"><A HREF="ex991.htm"><FONT STYLE="font-size: 10pt">Press release dated May 8, 2018 announcing &ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TransAlta
Reports First Quarter 2018 Results&rdquo;</FONT></FONT></A></TD></TR>
</TABLE>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">&nbsp;</P>



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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
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<DESCRIPTION>NEWS RELEASE DATED MAY 8, 2018
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<P STYLE="margin: 0; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Exhibit 99.1</B></FONT></P>

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

<P STYLE="margin: 0; text-align: right"></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 15pt 0 7.5pt; text-align: left"><IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"></P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"></P>



<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"></P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"><B>TransAlta Reports First Quarter 2018 Results</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">CALGARY, May 8, 2018 /CNW/ -&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>First Quarter 2018 Financial Highlights </B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Comparable EBITDA<SUP>(1)</SUP> was up $19 million,
or 8%, to $259 million; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Free cash flow<SUP>(1)</SUP> from ongoing operations
increased 2% to $81 million; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Total consolidated net debt was reduced by almost
$300 million during the quarter; and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Receipt of $157 million in early termination payments
from the Balancing Pool.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">TransAlta Corporation (&quot;TransAlta&quot; or the &quot;Company&quot;)
(TSX: TA; NYSE: TAC) today reported first quarter 2018 financial results, with free cash flow<SUP>(2)</SUP> of $238 million for
the quarter and funds from operations<SUP>(2)</SUP> of $318 million, up $142 and $116 million respectively.&nbsp; The increase
in free cash flow and funds from operations was primarily driven by the receipt of $157 million from the Balancing Pool for the
early termination of the Sundance B and C Power Purchase Arrangements (&quot;PPAs&quot;), and the receipt of $17 million (our net
share after non-controlling interest) from the Ontario Electrical Financial Corporation (&quot;OEFC&quot;) during the first quarter
of 2017 relating to the settlement of an indexation dispute. &nbsp;Excluding these two unusual payments in 2018 and 2017, our free
cash flow would have been $81 million and $79 million, respectively, while our funds from operations would have been $161 and $168
million, respectively.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Comparable EBITDA<SUP>(2)</SUP> for the quarter increased
$142 million compared to last year, also mainly due to the one-time cash flows in 2017 and 2018. &nbsp;Results in the first quarter
for Alberta Coal, compared to last year, were impacted by the expiry of the Sundance A PPA and our decision to shut down Sundance
Unit 1 and mothball Sundance Unit 2. During the first quarter last year, comparable EBITDA generated by these two units totalled
$12 million.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;Results for the first quarter were strong and a great
way to start 2018,&quot; said Dawn Farrell, President and Chief Executive Officer. &quot;We progressed our strategy with the announcement
of two wind projects, the repayment of US$500 million of debt, and the advancement of a gas pipeline to our plants in Alberta.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>First Quarter Highlights</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">TransAlta Renewables, through a subsidiary of TransAlta,
entered into an arrangement to acquire two construction ready wind projects, consisting of a 90 MW project in Pennsylvania and
a 29 MW project in New Hampshire, supported by long-term contracts with highly creditworthy counterparties. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Repaid our 6.650 per cent US$500 million senior notes,
due May 15, 2018, with cash on hand and by drawing down our credit facility. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Purchased and cancelled 374,900 common shares at an
average price of $6.97 per share through our Normal Course Issuer Bid which commenced March 14, 2018. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Received $157 million in compensation from the Balancing
Pool for the early termination of the Sundance B and C PPAs. We are seeking a further $56 million in compensation from the Balancing
Pool for the early termination. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Mothballed Sundance Units 3 and 5 as part of our optimization
plan for the Sundance facility in 2018 and 2019, which will ensure that the two remaining Sundance coal units operate at high capacity
utilizations with lower costs through the period to 2020.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Subsequent Events</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Donald Tremblay, Chief Financial Officer, decided
to leave the Company effective May 8, 2018 and will be relocating to eastern Canada to be closer to his family. TransAlta thanks
Mr. Tremblay for his contributions and leadership during the past four years, particularly his role managing the company's debt
reduction initiative. TransAlta has commenced a recruitment process for a new Chief Financial Officer. Brett Gellner, Chief Investment
Officer, and former Chief Financial Officer, will act as Interim Chief Financial Officer, in addition to his current role. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>2018 Outlook</B><BR>
Due to strong performance in the first quarter we are revising our 2018 financial targets as presented below.&nbsp; This guidance
excludes the impact of the $157 million termination payment received from the Balancing Pool during the first quarter.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Measure</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Low</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>High</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Comparable EBITDA</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1,000 million</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1,050 million</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Funds from operations</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$750 million</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$800 million</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Free cash flow</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$300 million</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$350 million</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sustaining and Productivity Capital</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$215 million</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$235 million</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><I><U>Range of key power price assumptions</U></I>:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Market</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Power Prices ($/MWh)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Alberta Spot </FONT></TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$50 to $60</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Alberta Contracted</FONT></TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$35 to $40</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Mid-C Spot (US$)</FONT></TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$20 to $25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Mid-C Contracted (US$)</FONT></TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$47 to $53</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><I><U>Other assumptions relevant to 2018 outlook:</U></I></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Canadian Coal Capacity Factor</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">65% to 75%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Hydro/Wind Resource</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Long term average</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Summary of Credit Agency Reviews</B><BR>
DBRS Limited reaffirmed our Unsecured Debt rating and Medium-Term Notes rating as BBB (low), the Preferred Shares rating as Pfd-3
(low), and Issuer Rating as BBB (low).</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>First Quarter 2018 Review by Segment</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Comparable EBITDA</B></FONT><BR>
<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(in CAD$ millions)</B></FONT></TD>
    <TD COLSPAN="2" STYLE="padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>3 Months Ended</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>March 31, 2018</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>March 31, 2017</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Canadian Coal</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp;&nbsp; 222<SUP>(a)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">91</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">U.S. Coal</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">27</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">10</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Canadian Gas</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">65</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp;&nbsp; 88<SUP>(b)</SUP></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Australian Gas</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">31</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Wind and Solar</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">65</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">68</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Hydro</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">17</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">14</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Energy Marketing </FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">9</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(4)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Corporate</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(20)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(24)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Total Comparable EBITDA</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>416</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>274</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="3" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">a) Includes $157 million in compensation from the Balancing Pool for the early termination of the </FONT><BR>
<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sundance B and C PPAs.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">b)&nbsp;Includes $34 million payment from the OEFC relating to the settlement of an indexation dispute.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Canadian Coal:</U> Comparable EBITDA for the three
months ended March 31, 2018 increased $131 million compared to 2017. Comparable EBITDA for the quarter was positively impacted
by the $157 million termination payment related to the Sundance B and C PPAs, while gross margin was negatively impacted by the
expiry of the Sundance A PPA. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>U.S. Coal:</U> Comparable EBITDA increased $17
million compared to 2017, primarily due to our ability to purchase lower cost power to fulfill our contract and hedge obligations,
as well as favourable changes to the mark-to-market value of certain forward financial contracts. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Canadian Gas:</U> Comparable EBITDA for the first
quarter of 2018 decreased by $23 million compared to 2017, mainly due to the $34 million contract indexation dispute settlement
received in 2017. This was partially offset by higher margin received in 2018 as a result of the Mississauga re-contracting and
the settlement of contract indices adjustments at Sarnia. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Australian Gas:</U> Comparable EBITDA for the first
three months of 2018 was in line with the same period in 2017. The addition of South Hedland was largely offset by the loss of
the contribution from the Solomon Power Station contract. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Wind and Solar:</U> Comparable EBITDA for the first
quarter of 2018 was down $3 million compared to 2017 mainly due to the recognition of unrealized mark-to-market losses this period.
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Hydro:</U> Comparable EBITDA for the first quarter
this year increased $3 million compared to the first quarter of 2017, primarily due to an increase in revenues from ancillary services,
which more than offset the lower generation. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Energy Marketing:</U> Comparable EBITDA for the
first quarter was $13 million higher than last year, reflecting a return to typical returns after weak performance in the first
quarter of 2017. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt"><U>Corporate:</U> Our Corporate overhead costs of
$20 million were $4 million lower, due to lower incentive payments, than the comparable period in 2017.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Consolidated Earnings Review </B><BR>
Net earnings attributable to common shareholders during the quarter was $65 million higher than last year mainly due to the $157
million received from the early termination of the Sundance B and C PPAs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">No planned major maintenance capital was invested in the first
quarter of 2018, resulting in total sustaining capital for the quarter being $22 million lower than Q1 2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Operating Review </B><BR>
Adjusted availability for the three months ended March 31, 2018 was 93.9 per cent compared to 88.5 per cent for the same period
in 2017.&nbsp; There were no planned outages in the first quarter of 2018 and the number of unplanned outages was reduced compared
to the first quarter of 2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Production for the three months ended March 31, 2018 decreased
1,880 GWh compared to 2017, despite higher availability, due to the retirement of Sundance Unit 1 and the mothballing of Sundance
Unit 2 as well as higher paid curtailments on units under contract. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>First Quarter 2018 Financial and Operational Highlights</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP ROWSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>In $CAD millions, unless otherwise stated </B></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>3 Months Ended</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>March 31, 2018</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>March 31, 2017</B></FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Adjusted availability (%) <SUP>(3,4)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">93.9</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">88.5</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Production (GWh) <SUP>(4)</SUP></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">7,171</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">9,051</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Revenue</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$588</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$578</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Comparable EBITDA</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$416</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$274</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Net earnings attributable to common shareholder</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$65</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Funds from operations</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$318</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$202</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Cash Flow from Operating Activities</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$425</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$281</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Free cash flow</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$238</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$96</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Net earnings per common share attributable to common </FONT><BR>
<FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">shareholders</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.23</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">-</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Funds from operations per share</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1.10</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.70</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Free cash flow per share</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.83</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.33</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Dividends declared per common share</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.04</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">-</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">TransAlta is in the process of filing its Consolidated Financial
Statements and accompanying notes, as well as the associated Management's Discussion &amp; Analysis (&quot;MD&amp;A&quot;). These
documents will be available today on the Investors section of TransAlta's website at www.transalta.com or through SEDAR at www.sedar.com
and EDGAR at www.sec.gov/edgar.shtml.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Conference call</B><BR>
We will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, May 8, 2018, to discuss our first quarter 2018
results.&nbsp; The call will begin with a short address by Dawn Farrell, President and CEO, and Donald Tremblay, Chief Financial
Officer,<B>&nbsp;</B>followed by a question and answer period for investment analysts and investors. A question and answer period
for the media will immediately follow.&nbsp; Please contact the conference operator five minutes prior to the call, noting &quot;TransAlta
Corporation&quot; as the company and &quot;Sally Taylor&quot; as moderator.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0; text-align: center"><B><U>Dial-in numbers &ndash; First Quarter
2018 Results:</U><BR>
Toll-free North American participants call: 1-888-231-8191<BR>
Outside of Canada &amp; USA call: 1-647-427-7450</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">A link to the live webcast will be available on the Investor
Centre section of TransAlta's website at http://www.transalta.com/investors/events-and-presentations. If you are unable to participate
in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 8088918 followed
by the # sign. A transcript of the broadcast will be posted on TransAlta's website once it becomes available.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Notes</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><I><SUP>(1)</SUP></I>&nbsp;<I>Excluding one-time positive cash flows due to the Alberta Power Purchase Arrangement terminations in 2018 and the indexation dispute settlement in 2017.</I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><I><SUP>(2)</SUP>&nbsp;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' results. Refer to the Funds from Operations and Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company's MD&amp;A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.</I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><I><SUP>(3) </SUP>Availability and production includes all generating assets (generation operations and finance leases that we operate). </I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><I><SUP>(4)</SUP>&nbsp;Adjusted for economic dispatching at U.S. Coal.</I></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B><I>About TransAlta Corporation: </I></B><I><BR>
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia
with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers
clean, affordable, energy efficient, and reliable power. Today, we are one of Canada's largest producers of wind power and Alberta's
largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member
where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been
recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to
have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><I>For more information about TransAlta, visit our web site
at transalta.com.</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B><I>Cautionary Statement Regarding Forward Looking Information</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><I>This news release contains forward looking statements,
including statements regarding the business and anticipated financial performance of the Company that are based on&nbsp;the Company's&nbsp;current
expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some
cases, forward-looking statements can be identified by terminology such as &quot;plans&quot;, &quot;expects&quot;, &quot;proposed&quot;,
&quot;will&quot;, &quot;anticipates&quot;, &quot;develop&quot;, &quot;continue&quot;, and similar expressions suggesting future
events or future&nbsp;performance.&nbsp;In particular, this news release contains forward looking statements including, without
limitation, statements pertaining to TransAlta's business and anticipated future financial performance; our 2018 financial outlook,
including expected comparable EBITDA, funds from operations, free cash flow ranges and expected sustaining and productivity capital
expenditures for 2018; ability to ensure that two Sundance coal units can operate at high capacity utilizations with lower costs
through the period to 2020; the acquisition and development of two construction ready wind farms in the US; and the transformation
of TransAlta to a gas and renewables company.&nbsp; These forward-looking statements are not historical facts but are based on
TransAlta's belief and assumptions based on information available at the time the assumptions were made. These statements are subject
to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking
statements. Some of the factors that could cause such differences include: operational risks involving our facilities; changes
in market prices where we operate; unplanned outages at generating facilities and the capital investments required; equipment failure
and our ability to carry out repairs in a cost effective and timely manner; 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; negative impact to our credit ratings; legislative or regulatory developments and their impacts, including
as it pertains to the capacity market being developed in Alberta; 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 TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables, including those pertaining
to South Hedland and Solomon Power Stations; and other risks and uncertainties discussed in the Company's materials filed with
the Canadian securities regulatory authorities from time to time and as also set forth in the Company's MD&amp;A and Annual Information
Form for the year ended&nbsp;December 31, 2017. Readers are cautioned not to place undue reliance on these forward-looking statements,
which reflect TransAlta's expectations only as of the date of this news release. The financial outlook that is contained in this
news release was approved on May 7, 2018 and is being provided for the purpose of giving the reader information about management's
current expectations and plans. 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: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Note: All financial figures are in Canadian dollars unless
otherwise indicated.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><IMG SRC="image_002.jpg" ALT="Cision" STYLE="height: 12px; width: 12px">View
original content:http://www.prnewswire.com/news-releases/transalta-reports-first-quarter-2018-results-300644082.html</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">SOURCE TransAlta Corporation</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">View original content: http://www.newswire.ca/en/releases/archive/May2018/08/c6344.html</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">%CIK: 0001144800</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"><B>For further information: </B>Investor Inquiries: Sally Taylor,
Manager, Investor Relations, Phone: 1-800-387-3598 in Canada and U.S., Email: investor_relations@transalta.com; Media Inquiries:
Stacey Hatcher, Manager, Communications, Phone: Toll-free media number: 1-855-255-9184, Email: ta_media_relations@transalta.com</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">CO: TransAlta Corporation</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">CNW 08:00e 08-MAY-18</P>



<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"></P>

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