Company: TSLTF
Filing Date: 2025-12-12
Form Type: SUPPL
Source: 0001193125-25-317786
Chunk: 154

Company: TRANSALTA CORP
Filing Date: 2025-12-12
Form: SUPPL
Chunk 154
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 such, dividends are reported as interest expense (Note 10). B. Option to Exchange

| As at                         |     | Dec. 31, 2024   |   |     |             |      |     | Dec. 31, 2023   |   |     |             |      |
|:------------------------------|:----|:----------------|:--|:----|------------:|:-----|:----|:----------------|:--|:----|------------:|:-----|
| Description                   |     | Base fair value |   |     | Sensitivity |      |     | Base fair value |   |     | Sensitivity |      |
| Option to exchange – embedded 
 derivative                    |     |                 | — |     |             | +nil |     |                 | — |     |             | +nil |
|                               |     |                 |   |     |         -30 |      |     |                 |   |     |         -25 |      |

The Investment Agreement allows Brookfield the option to exchange all of the outstanding exchangeable securities after Dec. 31, 2024, into an equity ownership interest of up to a maximum 49 per cent in an entity that has been formed to hold the Alberta Hydro Assets. The fair value of the option to exchange is considered a Level III fair value measurement as there is no available market-observable data. It is therefore valued using a mark-to-forecastmodel with inputs that are based on historical data and changes in underlying discount rates only when it represents a long-term change in the value of the option to exchange. Sensitivity ranges for the base fair value are determined using reasonably possible alternative assumptions for key unobservable inputs, which is mainly the change in the implied discount rate of future cash flows. The sensitivity analysis has been prepared using the Company’s assessment that a change in the implied discount rate of 10.5 per cent (2023 — 11.8 per cent) of future cash flows of one per cent is a reasonably possible change. The maximum equity interest Brookfield can own with respect to the Alberta Hydro Assets is 49 per cent. If Brookfield’s ownership interest is less than 49 per cent at conversion, Brookfield has a one-timeoption payable in cash to increase its ownership to up to 49 per cent, exercisable up until Dec. 31, 2028, provided Brookfield holds at least 8.5 per cent of TransAlta’s common shares. Under this top-upoption