Eloro Resources Ltd. — Interim / Quarterly Report 2023

Nov 14, 2023

ONTARIO POWER GENERATION INC.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

SEPTEMBER 30, 2023

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INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended	Three Months Ended	Nine Months Ended	Nine Months Ended
	September 30		September 30
(millions of dollars– except where noted)	2023	2022	2023	2022
Revenue	1,882	1,978	5,540	5,792
Fuel expense	276	350	702	833
Gross margin	1,606	1,628	4,838	4,959
Operations, maintenance and administration expenses	723	666	2,319	2,098
Depreciation and amortization expenses	262	281	787	836
Accretion on fixed asset removal and nuclear waste	296	285	885	857
management liabilities
Earnings on nuclear fixed asset removal and nuclear	(267)	(259)	(789)	(774)
waste management funds
Property taxes	13	12	36	36
	1,027	985	3,238	3,053
Income before other losses (gains), interest and	579	643	1,600	1,906
income taxes
Other losses (gains)(Note 17)	16	2	(11)	(7)
Income before interest and income taxes	563	641	1,611	1,913
Net interest expense_(Note 5)_	17	45	86	141
Income before income taxes	546	596	1,525	1,772
Income tax expense	97	108	220	326
Net income	449	488	1,305	1,446
Net income attributable to the Shareholder	444	484	1,291	1,433
Net income attributable to non-controlling interest	5	4	14	13
Basic and diluted earnings per share(dollars) (Note 13)	1.62	1.76	4.70	5.22

See accompanying notes to the interim consolidated financial statements

2 ONTARIO POWER GENERATION

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months	Ended	Nine Months Ended	Nine Months Ended
	September	30	September 30
(millions of dollars)	2023	2022	2023	2022
Net income	449	488	1,305	1,446
Other comprehensive income, net of income
taxes(Note 8)
Reclassification to income of amounts related to pension	(1)	1	(3)	6
and other post-employment benefits1
Reclassification to income of amounts related to derivatives	1	2	3	6
designated as cash flow hedges2
Net (loss) gain on derivatives designated as cash	(3)	(14)	13	(19)
flow hedges3
Currency translation adjustment	40	118	(5)	146
Other comprehensive income for the period	37	107	8	139
Comprehensive income	486	595	1,313	1,585
Comprehensive income attributable to the Shareholder	481	591	1,299	1,572
Comprehensive income attributable to non-controlling	5	4	14	13
interest

• 1 Net of income tax recovery of nil and $1 million for the three and nine month periods ended September 30, 2023, respectively. Net of income tax expense of $1 million and $2 million for the three and nine month periods ended September 30, 2022, respectively.

• 2 Net of income tax expense of $1 million for each of the three and nine month periods ended September 30, 2023. Net of income tax expense of nil and $1 million for the three and nine month periods ended September 30, 2022, respectively.

3 Net of income tax recovery of $1 million and net of income tax expense of $4 million for the three and nine month periods ended September 30, 2023, respectively. Net of income tax recovery of $4 million and $6 million for the three and nine month periods ended September 30, 2022, respectively.

See accompanying notes to the interim consolidated financial statements

ONTARIO POWER GENERATION 3

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FLOWS (UNAUDITED)
	Nine	Months Ended
	September 30
(millions of dollars)	2023	2022
Operating activities
Net income	1,305	1,446
Adjust for non-cash items:
Depreciation and amortization expenses	787	836
Accretion on fixed asset removal and nuclear waste management liabilities	885	857
Earnings on nuclear fixed asset removal and nuclear waste management funds	(789)	(774)
Pension and other post-employment benefit costs_(Note 9)_	273	304
Deferred income tax expense	46	13
Regulatory assets and regulatory liabilities	(129)	18
Other gains	(4)	-
Other	1	38
Expenditures on fixed asset removal and nuclear waste management	(312)	(294)
Reimbursement of eligible expenditures on nuclear fixed asset removal and	148	166
nuclear waste management
Contributions to pension funds and expenditures on other post-employment	(236)	(221)
benefits and supplementary pension plans
Net changes to other long-term assets and long-term liabilities	38	107
Net changes to non-cash working capital balances_(Note 16)_	(132)	122
Cash flow provided by operating activities	1,881	2,618
Investing activities
Investment in property, plant and equipment and intangible assets	(1,988)	(1,802)
Purchase of new corporate headquarters real estate site_(Note 17)_	(102)	-
Short-term investments	(7)	(6)
Proceeds from sale of non-core real estate site_(Note 17)_	34	-
Cash flow used in investing activities	(2,063)	(1,808)
Financing activities
Net issuance of long-term debt_(Note 5)_	135	179
Net issuance of short-term debt_(Note 6)_	95	72
Equity investment from non-controlling interest_(Note 19)_	2	-
Distribution to non-controlling interest	(15)	(13)
Cash flow provided by financing activities	217	238
Effect of exchange rate changes on cash, cash equivalents and restricted cash	-	8
Net increase in cash, cash equivalents and restricted cash	35	1,056
Cash, cash equivalents and restricted cash, beginning of period	1,595	698
Cash, cash equivalents and restricted cash, end ofperiod	1,630	1,754

See accompanying notes to the interim consolidated financial statements

4 ONTARIO POWER GENERATION

INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As At	September 30	December 31
(millions of dollars)	2023	2022
Assets
Current assets
Cash, cash equivalents and restricted cash_(Note 3)_	1,630	1,595
Equity securities	143	171
Receivables from related parties	575	484
Nuclear fixed asset removal and nuclear waste management funds	51	51
Fuel inventory	308	252
Materials and supplies	108	106
Regulatory assets_(Note 4)_	227	227
Prepaid expenses	258	190
Other current assets_(Note 18)_	291	476
	3,591	3,552
Property, plant and equipment	46,439	44,490
Less: accumulated depreciation	13,575	12,723
	32,864	31,767
Intangible assets	771	934
Less: accumulated amortization	291	440
	480	494
Goodwill	172	172
Other assets
Nuclear fixed asset removal and nuclear waste management funds	21,291	20,655
Loan receivable from related party	906	908
Long-term materials and supplies	395	396
Regulatory assets_(Note 4)_	4,228	3,797
Investments subject to significant influence	52	51
Pension assets	611	450
Other long-term assets	104	101
	27,587	26,358
	64,694	62,343

See accompanying notes to the interim consolidated financial statements

ONTARIO POWER GENERATION 5

INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As At	September 30	December 31
(millions of dollars)	2023	2022
Liabilities
Current liabilities
Accounts payable, accrued charges and other payables	1,561	1,772
Short-term debt_(Note 6)_	160	65
Long-term debt due within one year_(Note 5)_	605	43
Regulatory liabilities_(Note 4)_	215	215
	2,541	2,095
Long-term debt(Note 5)	9,681	10,109
Other liabilities
Fixed asset removal and nuclear waste management liabilities_(Note 7)_	25,039	24,315
Other post-employment benefit liabilities	2,382	2,322
Long-term accounts payable and accrued charges	338	384
Deferred revenue	366	373
Deferred income taxes	2,123	1,897
Regulatory liabilities_(Note 4)_	1,934	1,859
	32,182	31,150
Equity
Common shares_(Note 12)_	5,126	5,126
Class A shares_(Note 12)_	787	787
Contributed surplus	30	32
Retained earnings	14,031	12,740
Accumulated other comprehensive income_(Note 8)_	136	128
Equity attributable to the Shareholder	20,110	18,813
Equity attributable to non-controlling interest	180	176
Total equity	20,290	18,989
	64,694	62,343

Commitments and Contingencies (Notes 5, 6, 9 and 14)

See accompanying notes to the interim consolidated financial statements

6 ONTARIO POWER GENERATION

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY (UNAUDITED)

	Nine Months Ended	Nine Months Ended
	September 30
(millions of dollars)	2023	2022
Common shares(Note 12)	5,126	5,126
Class A shares(Note 12)	787	787
Contributed surplus
Balance at beginning of period	32	34
Reclassification to income of amounts related to gain on deconsolidation of	(2)	(2)
Fair Hydro Trust
Balance at end of period	30	32
Retained earnings
Balance at beginning of period	12,740	11,104
Net income attributable to the Shareholder	1,291	1,433
Balance at end of period	14,031	12,537
Accumulated other comprehensive income (loss), net of income taxes
(Note 8)
Balance at beginning of period	128	(262)
Other comprehensive income	8	139
Balance at end of period	136	(123)
Equity attributable to the Shareholder	20,110	18,359
Equity attributable to non-controlling interest
Balance at beginning of period	176	178
Income attributable to non-controlling interest	14	13
Equity investment from non-controlling interest_(Note 19)_	5	-
Distribution to non-controlling interest	(15)	(13)
Balance at end of period	180	178
Total equity	20,290	18,537

See accompanying notes to the interim consolidated financial statements

ONTARIO POWER GENERATION 7

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION

These interim consolidated financial statements for the three and nine month periods ended September 30, 2023 and 2022 include the accounts of Ontario Power Generation Inc. (OPG or the Company) and its subsidiaries. The Company consolidates its interest in entities over which it is able to exercise control and attributes the results to its sole shareholder, the Province of Ontario (the Province or the Shareholder). These interim consolidated financial statements have been prepared and presented in accordance with United States generally accepted accounting principles (US GAAP). These interim consolidated financial statements do not contain all of the disclosures required by US GAAP for annual financial statements. Accordingly, they should be read in conjunction with the annual consolidated financial statements of the Company as at and for the year ended December 31, 2022.

As required by Ontario Regulation 395/11, as amended, under the Financial Administration Act (Ontario) , OPG adopted US GAAP for the presentation of its consolidated financial statements, effective January 1, 2012. Since January 1, 2012, OPG also has received exemptive relief from the Ontario Securities Commission (OSC) from the requirements of section 3.2 of National Instrument 52-107, Acceptable Accounting Policies and Auditing Standards . The exemption allows OPG to file consolidated financial statements prepared in accordance with US GAAP, rather than International Financial Reporting Standards (IFRS), without becoming a US Securities and Exchange Commission registrant.

In September 2022, OPG received an extension to its previous exemptive relief from the OSC. The exemptive relief will terminate on the earliest of the following:

• January 1, 2027;

• The financial year that commences after OPG ceases to have activities subject to rate regulation; and

• The financial year that commences on or following the later of:

• I. The effective date prescribed by the International Accounting Standards Board (IASB) for the mandatory application of a standard within IFRS specific to entities with rate regulated activities (Mandatory Rate-regulated Standard); and

• II. Two years after the IASB publishes the final version of a mandatory Rate-regulated Standard.

All dollar amounts are presented in Canadian dollars, unless otherwise noted. Certain 2022 comparative amounts have been reclassified from consolidated financial statements previously presented to conform to the 2023 interim consolidated financial statement presentation.

Seasonal Variations

OPG’s quarterly electricity generation from the Regulated – Hydroelectric Generation, Contracted Hydroelectric and Other Generation, and Atura Power business segments is affected by changes in grid-supplied electricity demand. Changes in grid-supplied electricity demand are primarily caused by variations in seasonal weather conditions, changes in economic conditions, the impact of small-scale generation embedded in distribution networks, and the impact of conservation efforts. Historically, there has been greater electricity demand in Ontario during the winter and summer months due to heating and air conditioning demands.

OPG’s quarterly electricity generation from hydroelectric facilities is impacted by weather conditions that affect water flows. Historically, there have been higher water flows in the second quarter as a result of snow and ice melt entering the river systems. The financial impact of variability in water flows on the Regulated – Hydroelectric

8 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Generation business segment is mitigated by regulatory variance and deferral accounts (regulatory accounts) authorized by the Ontario Energy Board (OEB).

The financial impact of variability in electricity generation from the Contracted Hydroelectric and Other Generation business segment and the Atura Power business segment is mitigated by the terms of the applicable Energy Supply Agreements with the Independent Electricity System Operator (IESO) and other long-term contracts for the contracted generating facilities in Ontario.

2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The accounting policies followed in the presentation of these interim consolidated financial statements are consistent with those of the previous fiscal year.

3. CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash consist of the following:

As At (millions of dollars)	September 30 December 31 2023 2022
Cash and cash equivalents Restricted cash	1,608 1,582 22 13
Total cash, cash equivalents and restricted cash	1,630 1,595

Restricted cash is held primarily for prescribed purposes, including debt service, general collateral purposes and other contractual arrangements.

ONTARIO POWER GENERATION 9

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

4. REGULATORY ASSETS AND REGULATORY LIABILITIES

The regulatory assets and regulatory liabilities consist of the following:

As At	September 30	December 31
(millions of dollars)	2023	2022
Regulatory assets
Variance and deferral accounts authorized by the OEB
Pension & OPEB Cash Versus Accrual Differential Deferral Account	645	799
Rate Smoothing Deferral Account	632	569
Hydroelectric Surplus Baseload Generation Variance Account	399	403
Nuclear Liability Deferral Account	331	188
Capacity Refurbishment Variance Account	271	74
Nuclear Development Variance Account	113	111
Bruce Lease Net Revenues Variance Account	78	101
Other variance and deferral accounts1	50	26
	2,519	2,271
Deferred Income Taxes	1,936	1,753
Total regulatory assets	4,455	4,024
Less: current portion	227	227
Non-current regulatoryassets	4,228	3,797
Regulatory liabilities
Variance and deferral accounts authorized by the OEB
Pension & OPEB Cash Payment Variance Account	432	460
Pension and OPEB Cost Variance Account	288	78
Hydroelectric Water Conditions Variance Account	183	172
Nuclear Deferral and Variance Over/Under Recovery Variance Account	75	75
Ancillary Services Net Revenue Variance Account	52	48
Other variance and deferral accounts2	106	181
	1,136	1,014
Pension and OPEB Regulatory Liability_(Note 9)_	994	1,029
COVID-19 net credit to ratepayers	19	31
Total regulatory liabilities	2,149	2,074
Less: current portion	215	215
Non-current regulatoryliabilities	1,934	1,859

1 Represents amounts for the Hydroelectric Deferral and Variance Over/Under Recovery Variance Account, the Fitness for Duty Deferral Account, the Pickering Closure Costs Deferral Account, the Niagara Tunnel Project Pre-December 2008 Disallowance Variance Account, the Clarington Corporate Campus Variance Account and the Pickering B Extension Variance Account.

2 Represents amounts for the Income and Other Taxes Variance Account, the SR&ED ITC Variance Account, the Pension & OPEB Forecast Accrual Versus Actual Cash Payment Differential Carrying Charges Variance Account, the Impact Resulting from Changes to Pickering Station End-of-Life Dates (December 31, 2017) Deferral Account and the Impact Resulting from Optimization of Pickering Station End-of-Life Dates Deferral Account.

10 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

In September 2022, the Province announced its support for the continued operation of Units 5 to 8 at OPG’s Pickering nuclear generating station (Pickering GS) to September 2026, subject to the regulatory approval of the Canadian Nuclear Safety Commission. The approved regulated prices for electricity generation from OPG’s nuclear facilities during the 2022-2026 period were set on the assumption of continued operation of Units 5 to 8 at the Pickering GS until the end of 2025. In December 2022, the Province amended Ontario Regulation 53/05 to require OPG to establish the Pickering B Extension Variance Account, effective January 1, 2023. The variance account records the difference between the revenues generated from the output of Units 5 to 8 at the Pickering GS during the period from January 1, 2026 to September 30, 2026, and the sum of any forgone revenue related to forgone output from these units arising from activities undertaken in furtherance of their operation during the period from January 1, 2026 to September 30, 2026 and the revenue requirement impact resulting from actual non-capital and capital costs incurred for such activities.

OPG’s approved regulated prices for the 2022-2026 period were set based on cost forecasts that assumed the application of Protecting a Sustainable Public Sector for Future Generations Act, 2019 (Bill 124), which set limits on compensation increases for unionized and non-unionized employees in the Ontario public sector and applied to OPG. Bill 124 limited the maximum annual increase in both wages and total compensation to one percent for a three-year period, referred to as the moderation period, subject to certain exceptions. A broad range of unions and organizations challenged the constitutionality of Bill 124. In a decision dated November 29, 2022, the Ontario Superior Court found that Bill 124 was unconstitutional and declared it to be void and of no effect (Bill 124 Court Decision). The Government of Ontario filed an appeal of the decision with the Ontario Court of Appeal on December 29, 2022, which was heard in June 2023.

On March 1, 2023, OPG filed an application with the OEB requesting to establish a variance account to record compensation cost impacts attributable to the nuclear facilities as a result of the Bill 124 Court Decision for future review and disposition by the OEB. On June 27, 2023, the OEB issued a decision and order denying OPG’s request. On July 17, 2023, OPG filed a motion asking the OEB to review the June 2023 decision, which was reaffirmed by the OEB in a decision issued on October 24, 2023. As a result, OPG is unable to record compensation cost impacts of the Bill 124 Court Decision in the proposed variance account. OPG has recognized the impact of the Bill 124 Court Decision and the OEB’s decisions within the Company’s interim consolidated financial statements as at and for the nine months ended September 30, 2023.

ONTARIO POWER GENERATION 11

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

5. LONG-TERM DEBT AND NET INTEREST EXPENSE

Long-term debt consists of the following:

As At	September 30	December 31
(millions of dollars)	2023	2022
Medium Term Note Program senior notes	4,650	4,650
Senior notes payable under corporate credit facilities	2,754	2,618
Lower Mattagami Energy Limited Partnership senior notes	1,995	1,995
PSS Generating Station Limited Partnership senior notes	245	245
UMH Energy Partnership senior notes	165	166
OPG Eagle Creek Holdings LLC and subsidiaries senior notes	484	486
Other	25	25
	10,318	10,185
Plus: net fair value premium	6	7
Less: unamortized bond issuance fees	(38)	(40)
Less: amounts due within one year	(605)	(43)
Long-term debt	9,681	10,109

OPG borrowed long-term debt of $135 million, net of repayments, under the Company’s corporate credit facilities during the nine months ended September 30, 2023.

Net Interest Expense

The following table summarizes the net interest expense:

	Three Months	Ended	Nine Months Ended	Nine Months Ended
	September	30	September 30
(millions of dollars)	2023	2022	2023	2022
Interest on long-term debt	93	93	279	272
Interest on short-term debt	3	3	9	7
Interest income	(27)	(15)	(74)	(35)
Interest capitalized to property, plant and equipment and	(21)	(33)	(93)	(89)
intangible assets
Interest related to regulatory assets and regulatory liabilities1	(31)	(3)	(35)	(14)
Net interest expense	17	45	86	141

1 Includes interest to recognize the cost of financing regulatory account balances as authorized by the OEB, and interest costs deferred in certain regulatory accounts.

12 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

6. SHORT-TERM DEBT

Committed credit facilities and maturity dates as at September 30, 2023 were as follows:

(millions of dollars)		Amount	Maturity
Bank facilities:
Corporate		1,716	September 2027 and May 20281
Corporate	US Dollars	750	November 20232
Lower Mattagami Energy Limited Partnership		460	August 20283
OPG Eagle Creek Holdings LLC and subsidiaries	US Dollars	20	October 2028
Ontario ElectricityFinancial Corporation facility		750	December 20264

1 Represents amounts available under the facility net of debt issuances. Of the total credit facilities, $716 million is expected to mature in September 2027 and is available to finance certain expenditures of the Darlington New Nuclear Project, subject to certain conditions, and $1,000 million matures in May 2028.

2 The facility has a one-year extension option beyond the maturity date of November 2023.

3 A letter of credit of $60 million was outstanding under this facility as at September 30, 2023.

4 Represents amounts available under the facility, net of debt issuances.

Short-term debt consists of the following:

As At	September 30	December 31
(millions of dollars)	2023	2022
Lower Mattagami Energy Limited Partnership	160	65
Total short-term debt	160	65

As at September 30, 2023, a total of $461 million of letters of credit had been issued (December 31, 2022 – $439 million). As at September 30, 2023, this included $298 million for the supplementary pension plans, $17 million for OPG Eagle Creek Holdings LLC (Eagle Creek) and its subsidiaries, $60 million for Lower Mattagami Energy Limited Partnership, $43 million for general corporate purposes, $16 million for UMH Energy Partnership, $26 million for Atura Power, and $1 million for PSS Generating Station Limited Partnership.

For the nine months ended September 30, 2023, net issuances of short-term debt totalled $95 million (September 30, 2022 – $72 million), which was comprised of issuances of $725 million (September 30, 2022 – $1,361 million) and repayments of $630 million (September 30, 2022 – $1,289 million).

The weighted average interest rate on the short-term debt as of September 30, 2023 is 5.28 percent (December 31, 2022 – 4.55 percent).

ONTARIO POWER GENERATION 13

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

7. FIXED ASSET REMOVAL AND NUCLEAR WASTE MANAGEMENT LIABILITIES

Liabilities for fixed asset removal and nuclear waste management on a present value basis consist of the following:

As At	September 30	December 31
(millions of dollars)	2023	2022
Liability for used nuclear fuel management	14,780	14,327
Liability for nuclear decommissioning and nuclear low and intermediate level	9,981	9,699
waste management
Liability for non-nuclear fixed asset removal	278	289
Fixed asset removal and nuclear waste management liabilities	25,039	24,315

8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in the balance of each component of accumulated other comprehensive income (loss) (AOCI), net of income taxes, were as follows:

	Nine Months Ended September 30,	Nine Months Ended September 30,	Nine Months Ended September 30,	Nine Months Ended September 30,	2023	2023
	Unrealized Gains and			Currency
	Losses on Cash	Pension and		Translation
(millions of dollars)	Flow Hedges	OPEB		Adjustment			Total
Balance, beginning of period	(6)	80		54			128
Net gain on cash flow hedges	13	-		-			13
Amounts reclassified from AOCI	3	(3)		-			-
Translation of foreign operations	-	-		(5)			(5)
Other comprehensive income (loss)	16	(3)		(5)			8
for the period
Balance,end ofperiod	10	77		49			136
	Nine Months Ended			September 30,		2022
	Unrealized Gains and			Currency
	Losses on Cash	Pension and Translation
(millions of dollars)	Flow Hedges	OPEB		Adjustment			Total
Balance, beginning of period	(7)	(186)		(69)			(262)
Net loss on cash flow hedges	(19)	-		-			(19)
Amounts reclassified from AOCI	6	6		-			12
Translation of foreign operations	-	-		146			146
Other comprehensive (loss) income	(13)	6		146			139
for the period
Balance,end ofperiod	(20)	(180)		77			(123)

14 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

The significant amounts reclassified out of each component of AOCI, net of income taxes, were as follows:

(millions of dollars)	Amount Reclassified from AOCI Three Months Nine Months Ended Ended September 30, 2023 Statement of Income Line Item
Amortization of amounts related to cash flow hedges Losses Income tax expense Amortization of amounts related to pension and OPEB Actuarial gains and past service credits Income tax recovery	2 4 Net interest expense (1) (1) Income tax expense 1 3 (1) (4) See (1) below - 1 Income tax expense (1) (3)
Total reclassifications for theperiod	- -
(millions of dollars)	Amount Reclassified from AOCI Three Months Nine Months Ended Ended September 30, 2022 Statement of Income Line Item
Amortization of amounts related to cash flow hedges Losses Income tax expense Amortization of amounts related to pension and OPEB Actuarial losses Income tax expense	2 7 Net interest expense - (1) Income tax expense 2 6 2 8 See (1) below (1) (2) Income tax expense 1 6
Total reclassifications for theperiod	3 12

1 These AOCI components are included in the computation of pension and OPEB costs (see Note 9 for additional details).

Existing pre-tax net losses for derivatives of $1 million deferred in AOCI as at September 30, 2023 are expected to be reclassified to net income within the next 12 months.

ONTARIO POWER GENERATION 15

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

9. PENSION AND OTHER POST-EMPLOYMENT BENEFITS

OPG’s pension and other post-employment benefit (OPEB) costs for the three months ended September 30, 2023 and 2022 are as follows:

					Other Post-	Other Post-
	Registered		Supplementary		Employment
	Pension Plans		Pension Plans		Benefits
(millions of dollars)	2023	2022	2023	2022	2023	2022
Components of cost recognized for the period
Current service costs	46	89	1	2	16	22
Interest on projected benefit obligation	196	133	4	2	32	25
Expected return on plan assets, net of expenses	(250)	(227)	-	-	-	-
Amortization of net actuarial loss (gain)1	-	30	-	2	(13)	-
Costs recognized2	(8)	25	5	6	35	47

• 1 The impact of net actuarial loss (gain) is recognized as an increase (decrease) to other comprehensive income. This decrease for the three months ended September 30, 2023 was partially offset by a decrease in the Pension and OPEB Regulatory Liability of $12 million (three months ended September 30, 2022 – a decrease in the Pension and OPEB Regulatory Asset of $30 million).

• 2 Pension and OPEB costs for the three months ended September 30, 2023 exclude the net addition of costs of $60 million resulting from the recognition of changes in the regulatory assets and regulatory liabilities for the Pension and OPEB Cost Variance Account, the Pension & OPEB Cash Versus Accrual Differential Deferral Account and the Pension & OPEB Cash Payment Variance Account (three months ended September 30, 2022 – net addition of costs of $26 million).

OPG’s pension and OPEB costs for the nine months ended September 30, 2023 and 2022 are as follows:

					Other Post-	Other Post-
	Registered		Supplementary		Employment
	Pension Plans		Pension Plans		Benefits
(millions of dollars)	2023	2022	2023	2022	2023	2022
Components of cost recognized for the period
Current service costs	137	261	3	5	48	67
Interest on projected benefit obligation	589	399	12	8	96	73
Expected return on plan assets, net of expenses	(750)	(683)	-	-	-	-
Amortization of past service credits1	(1)	-	-	-	-	-
Amortization of net actuarial loss (gain)1	-	91	-	6	(39)	-
Costs recognized2	(25)	68	15	19	105	140

• 1 The net impact of amortization of past service costs (credits) and net actuarial loss (gain) is recognized as an increase (decrease) to other comprehensive income. This decrease for the nine months ended September 30, 2023 was partially offset by a decrease in the Pension and OPEB Regulatory Liability of $36 million (nine months ended September 30, 2022 – a decrease in the Pension and OPEB Regulatory Asset of $89 million).

• 2 These pension and OPEB costs for the nine months ended September 30, 2023 exclude the net addition of costs of $178 million resulting from the recognition of changes in the regulatory assets and regulatory liabilities for the Pension and OPEB Cost Variance Account, the Pension & OPEB Cash Versus Accrual Differential Deferral Account and the Pension & OPEB Cash Payment Variance Account (nine months ended September 30, 2022 – net addition of costs of $77 million).

16 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

10. RISK MANAGEMENT AND DERIVATIVES

OPG is exposed to risks related to changes in market interest rates on debt, movements in foreign currency that affect the Company’s assets, liabilities and forecasted transactions, and fluctuations in commodity prices. Select derivative instruments are used to manage such risks. Derivatives are used as hedging instruments, as well as for trading purposes.

Interest Rates

Interest rate risk is the risk that the value of assets and liabilities can change due to movements in interest rates. Interest rate risk for OPG arises with the need to refinance existing debt or undertake new financing. The management of these risks includes using derivatives to hedge the exposure in accordance with corporate risk management policies. OPG periodically uses interest rate swap agreements to mitigate elements of interest rate risk exposure associated with anticipated financing.

Foreign Exchange

OPG’s financial results are exposed to volatility in the Canadian/United States (US) foreign exchange rate as debt issuances, fuels and certain materials and services purchased for generating stations and major development projects may be denominated in, or tied to, the US dollar. To manage this risk, the Company employs various financial instruments such as forwards and other derivative contracts, in accordance with approved corporate risk management policies. Additionally, volatility in the Canadian/US foreign exchange rate also impacts OPG’s financial results from certain of its subsidiaries, whose operations are based exclusively in the US.

Commodity Prices

OPG is exposed to fluctuations in commodity prices. Changes in the market prices of nuclear fuels, oil, gas and biomass used to produce electricity can adversely impact OPG’s earnings and cash flow from operations. To manage the risk of unpredictable increases in the price of fuels, the Company has fuel hedging programs, which include using fixed price and indexed contracts.

A number of OPG’s hydroelectric facilities in the US sell energy and capacity into the wholesale electricity market and therefore are subject to volatility of wholesale electricity market pricing. Although revenue from these facilities represents a small portion of OPG’s overall revenue, the Company may enter into derivative instruments from time to time to further mitigate this risk.

Credit

The Company’s credit risk exposure is primarily a function of its electricity and other sales. The majority of OPG’s revenue is derived from electricity sales through the IESO administered market. Market participants in the IESO market provide collateral in accordance with the IESO prudential support requirements to cover funds that they might owe to the market. Although the credit exposure to the IESO represents a significant portion of OPG’s accounts receivable, the risk is considered acceptable due to the IESO’s primary role in the Ontario electricity market. The remaining receivables exposure is to a diverse group of generally high-quality counterparties. OPG’s allowance for doubtful accounts was $1 million as at September 30, 2023 and December 31, 2022.

The fair value of the derivative instruments totalled a net liability of $1 million as at September 30, 2023 (December 31, 2022 − $6 million).

ONTARIO POWER GENERATION 17

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

11. FAIR VALUE MEASUREMENTS

OPG is required to classify fair value measurements using a fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels, based on the inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

• Level 1: Valuation of inputs is based on unadjusted quoted market prices observed in active markets for identical assets or liabilities.

• Level 2: Valuation is based on inputs other than quoted prices under Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Valuation is based on inputs for the asset or liability that are not based on observable market data.

The fair value of financial instruments traded in active markets is based on quoted market prices as at the interim consolidated balance sheet dates. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. The quoted market price used for financial assets held by OPG is the current bid price. These instruments are included in Level 1 and consist primarily of equity investments and fund investments.

For financial instruments for which quoted market prices are not directly available, fair values are estimated using forward price curves developed from observable market prices or rates. The estimation of fair value may include the use of valuation techniques or models, based wherever possible on assumptions supported by observable market prices or rates prevailing as at the interim consolidated balance sheet dates. This is the case for over-the-counter derivatives and securities, which include energy commodity derivatives, foreign exchange derivatives, interest rate swap derivatives and fund investments. Various other fund investments are valued at the unit values supplied by the fund administrators. The unit values represent the underlying net assets at fair values, determined using closing market prices. Valuation models use general assumptions and market data and, therefore, do not reflect the specific risks and other factors that would affect a particular instrument’s fair value. The methodologies used for calculating the fair value adjustments are reviewed on an ongoing basis to ensure that they remain appropriate. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques are used to value these instruments. Significant Level 3 inputs include recent comparable transactions, comparable benchmark information, bid/ask spread of similar transactions and other relevant factors.

18 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

OPG’s financial instruments and their fair value as at September 30, 2023 and December 31, 2022 was as follows:

	Fair Value	Fair Value	Carrying Value1	Carrying Value1
(millions of dollars)	2023	2022	2023	2022	Balance Sheet Line Item
Nuclear Segregated Funds	21,342	20,706	21,342	20,706	Nuclear fixed asset removal
(includes current portion)2					and nuclear waste
					management funds
Loan receivable - from	745	786	906	908	Loan receivable
Fair Hydro Trust
Investment in Hydro One	143	171	143	171	Equity securities
Limited Shares
Payable related to cash	(1)	(3)	(1)	(3)	Long-term accounts
flow hedges					payable and accrued
					charges
Long-term debt	(8,914)	(9,180)	(10,286)	(10,152)	Long-term debt
(includes current portion)
Other financial instruments	81	79	81	79	Various

1 The carrying values of other financial instruments included in cash and cash equivalents, receivables from related parties, other current assets, short-term debt, and accounts payable, accrued charges and other payables approximate their fair values due to the immediate or short-term maturity of these financial instruments.

2 The Nuclear Segregated Funds are comprised of the Decommissioning Segregated Fund and the Used Fuel Segregated Fund. OPG’s fair value of the Nuclear Segregated Funds is set not to exceed an amount equal to the funding liability pursuant to the Ontario Nuclear Funds Agreement (ONFA) when the Nuclear Segregated Funds are in a surplus position.

The fair value of OPG’s long-term debt issued under the Medium Term Note Program is based on indicative pricing from the market. The fair value of these debt instruments is based on Level 2 inputs. The fair value of all other longterm debt instruments is determined based on a conventional pricing model, which is a function of future cash flows, the current market yield curve and term to maturity. These inputs are considered Level 2 inputs.

ONTARIO POWER GENERATION 19

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

The following tables present financial assets and financial liabilities measured at fair value in accordance with the fair value hierarchy:

As At (millions of dollars)	September 30, 2023 Level 1 Level 2 Level 3 Total
Assets Used Fuel Segregated Fund Investments measured at fair value, excluding investments measured at NAV Investments measured at NAV1
	5,959 5,535 - 11,494
	4,132
Due to Province	15,626
	(3,490)
Used Fuel Segregated Fund, net Decommissioning Segregated Fund Investments measured at fair value, excluding investments measured at NAV Investments measured at NAV1	12,136
	4,611 4,178 - 8,789
	3,229
Due to Province	12,018
	(2,812)
Decommissioning Segregated Fund, net Equity securities Other financial assets Liabilities Other financial liabilities	9,206
	143 - - 143
	20 1 85 106
	(22) (2) (1) (25)
As At (millions of dollars)	December 31, 2022 Level 1 Level 2 Level 3 Total
Assets Used Fuel Segregated Fund Investments measured at fair value, excluding investments measured at NAV Investments measured at NAV1	6,371 5,141 - 11,512 3,687
Due to Province	15,199 (3,412)
Used Fuel Segregated Fund, net Decommissioning Segregated Fund Investments measured at fair value, excluding investments measured at NAV Investments measured at NAV1	11,787 4,929 3,862 - 8,791 2,890
Due to Province	11,681 (2,762)
Decommissioning Segregated Fund, net Equity securities Other financial assets Liabilities Other financial liabilities	8,919 171 - - 171 68 5 91 164 (75) (6) (4) (85)

1 Represents investments measured at fair value using NAV as a practical expedient, which have not been classified in the fair value hierarchy. The fair value amounts for these investments presented in this table are intended to permit the reconciliation of the fair value hierarchy to amounts presented on the interim consolidated balance sheets.

20 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

During the nine months ended September 30, 2023, there were no transfers between Level 1 and Level 2 and into or out of Level 3.

The changes in the net assets measured at fair value that are classified as Level 3 financial instruments for the nine months ended September 30, 2023 were as follows:

	Other Financial
(millions of dollars)	Instruments
Opening balance, January 1, 2023	87
Realized losses included in revenue	(15)
Unrealized gains included in revenue	7
Purchases	5
Closingbalance,September 30,2023	84

Investments Measured at Net Asset Value

Nuclear Segregated Funds

Nuclear Segregated Funds’ investments measured at Net Asset Value (NAV) consist of real estate, infrastructure, and agriculture investments within the real assets investments portfolio. The fair value of these investments is determined using financial information as provided by the general partners of the limited partnership funds in which the Nuclear Segregated Funds are invested. Direct investments are valued using appropriate valuation techniques, such as recent arm’s-length market transactions, references to current fair values of other instruments that are substantially the same, discounted cash flow analyses, third-party independent appraisals, valuation multiples, or other valuation methods. Any control, size, liquidity or other discount premiums on the investments are considered in the determination of fair value.

The process of valuing investments for which no published market price exists is based on inherent uncertainties and the resulting values may differ from values that would have been used had a ready market existed for these investments. The values may also differ from the prices at which the investments may be sold.

The classes of investments within the Nuclear Segregated Funds that are reported on the basis of NAV as at September 30, 2023 were as follows:

	Fair	Unfunded	Redemption	Redemption
(millions of dollars except where noted)	Value	Commitments	Frequency	Notice
Real Assets
Infrastructure	3,999	1,425	n/a	n/a
Real Estate	3,175	1,131	n/a	n/a
Agriculture	187	7	n/a	n/a
Pooled Funds
Short-term Investments	9	n/a	Daily	1-5 days
Fixed Income	2,095	n/a	Daily	1-5 days
Equity	838	n/a	Daily	1-5 days
Total	10,303	2,563

The fair value of the pooled funds is classified as Level 2. Infrastructure, real estate and agriculture investments are measured using NAV as a practical expedient for determining their fair value.

ONTARIO POWER GENERATION 21

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Infrastructure

This class includes investments in funds whose investment objective is to generate a combination of long-term capital appreciation and current income, generally through investments such as energy, transportation and utilities. The fair values of investments in this class have been estimated using the NAV of the Nuclear Segregated Funds’ ownership interest in these investments. The ownership interest in the respective funds are not redeemable. However, the Nuclear Segregated Funds may transfer any of their ownership interests to another party, as stipulated in the partnership agreements and/or shareholders’ agreements. Cash distributions are received based on the operations of the underlying investments and/or as the underlying investments are liquidated. It is not possible to estimate when the underlying assets of the infrastructure funds in this class will be liquidated.

Real Estate

This class includes investments in institutional-grade real estate property. The investment objective is to provide a stable level of income with an opportunity for long-term capital appreciation. The fair values of the investments in this class have been estimated using the NAV of the Nuclear Segregated Funds’ ownership interest in these investments. The investments in the respective funds are not redeemable. However, the Nuclear Segregated Funds may transfer any of their ownership interests to another party, as stipulated in the partnership agreements and/or shareholders’ agreements. For investments in private real estate corporations, shares may be redeemed through a pre-established redemption process. Cash distributions are received based on the operations of the underlying investments and/or as the underlying investments are liquidated. It is not possible to estimate when the underlying assets in this class will be liquidated.

Agriculture

This class includes a diversified portfolio of global farmland investments. The investment objective is to provide a differentiated return source, income yield and inflation protection. The fair values of the investments in this class have been estimated using the NAV of the Nuclear Segregated Funds’ ownership interest in these investments. The investments in the respective funds are not redeemable. However, the Nuclear Segregated Funds may transfer any of their ownership interests to another party, as stipulated in the partnership agreements and/or shareholders’ agreements. Cash distributions are received based on the operations of the underlying investments and/or as the underlying investments are liquidated. It is not possible to estimate when the underlying assets in this class will be liquidated.

Pooled Funds

This class represents investments in pooled funds, which primarily include a diversified portfolio of fixed income securities, issued mainly by Canadian corporations, and diversified portfolios of Emerging Market listed equity. The investment objective of the pooled funds is to achieve capital appreciation and income through professionally managed portfolios. The fair value of the investments in this class has been estimated using NAV per share of the investments. There are no significant restrictions on the ability to sell the investments in this class.

22 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

12. SHARE CAPITAL

Common Shares

As at September 30, 2023 and December 31, 2022, OPG had 256,300,010 common shares issued and outstanding at a stated value of $5,126 million. OPG is authorized to issue an unlimited number of common shares without nominal or par value. Any issue of new shares is subject to the consent of OPG’s shareholder, the Province.

Class A Shares

The Company’s Articles of Amalgamation were amended effective December 1, 2017 to allow for the creation and issuance of non-voting Class A shares to the Province in exchange for equity injections in OPG. All of the outstanding shares are owned directly by the Province and OPG is authorized to issue an unlimited number of Class A shares without nominal or par value. The Class A and common shares rank equally as to entitlement to dividends, and all dividends declared by OPG must be declared in equal amounts per share on all outstanding shares without preference or distinction. Upon the liquidation, dissolution or wind-up of OPG, whether voluntary or involuntary, the holders of Class A shares and common shares are entitled to share equally, on a share for share basis, in all distributions of property and assets without preference or distinction. Any issue of new class of shares is subject to the consent of the Province. OPG is entitled to redeem outstanding Class A shares as may be approved by OPG’s Board of Directors.

As at September 30, 2023 and December 31, 2022, OPG had 18,343,815 Class A shares issued and outstanding at a stated value of $787 million.

13. EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing net income attributable to the Shareholder by the weighted average number of shares outstanding.

Class A shares are included in the weighted average number of shares outstanding. The weighted average number of shares outstanding as at September 30, 2023 and December 31, 2022 was 274.6 million. There were no dilutive securities during the nine months ended September 30, 2023 and for the year ended December 31, 2022.

14. COMMITMENTS AND CONTINGENCIES

Litigation

Various legal proceedings are pending against OPG or its subsidiaries covering a wide range of matters that arise in the ordinary course of business activities. Each of these matters are subject to various uncertainties. Some of these matters may be resolved unfavourably. While it is not possible to determine the ultimate outcome of the various pending actions, it is the Company’s belief that their resolution is not likely to have a material adverse impact on its consolidated financial position.

Guarantees

As at September 30, 2023, the total amount of guarantees provided by OPG was $35 million (December 31, 2022 – $35 million). As at September 30, 2023, the potential impact of the fair value of the outstanding guarantees to income is $1 million and OPG does not expect to make any payments associated with these guarantees.

ONTARIO POWER GENERATION 23

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Contractual Obligations

OPG’s contractual obligations as at September 30, 2023 were as follows:

(millions of dollars)	20231	2024	2025	2026	2027	Thereafter	Total
Fuel supply agreements	29	160	142	97	70	171	669
Contributions to the OPG registered	24	161	166	-	-	-	351
pension plan2
Long-term debt repayment	2	606	589	674	530	7,917	10,318
Interest on long-term debt	89	370	356	339	329	4,544	6,027
Short-term debt repayment	160	-	-	-	-	-	160
Commitments related to Darlington	182	-	-	-	-	-	182
Refurbishment project3
Operating licences	14	53	55	56	49	205	432
Operating lease obligations	4	13	10	10	7	20	64
Accounts payable, accrued charges and	1,391	2	-	-	-	-	1,393
other payables
Other	32	94	51	13	11	89	290
Total	1,927	1,459	1,369	1,189	996	12,946	19,886

1 Represents amounts for the remainder of the year.

2 The pension contributions include ongoing funding requirements in accordance with the actuarial valuation of the OPG registered pension plan as at January 1, 2023. The next actuarial valuation of the OPG registered pension plan must have an effective date no later than January 1, 2026. The pension contributions are affected by various factors including market performance, changes in actuarial assumptions, plan experience, changes in the pension regulatory environment and the timing of funding valuations. Funding requirements after January 1, 2026 are excluded due to significant variability in the assumptions required to project the timing of future cash flows. The amount of OPG’s additional, voluntary contribution, if any, is revisited from time to time.

3 Represents estimated currently committed costs to close the project, including accruals for completed work, demobilization of project staff and cancellation of existing contracts and material orders.

Contractual and commercial commitments as noted exclude certain purchase orders, as they represent purchase authorizations rather than legally binding contracts, and are subject to change without significant penalties.

Collective Bargaining Agreements

The Company maintains labour agreements with the Power Workers’ Union (PWU) and the Society of United Professionals (Society).

On April 11, 2023, the PWU ratified a two-year renewal collective agreement negotiated by the parties, covering the period from April 1, 2022 to March 31, 2024. The PWU bargaining unit represents approximately 50 percent of OPG’s workforce. As the agreement was established subsequent to the issuance of the Bill 124 Court Decision, it is not currently subject to the requirements of Bill 124.

The current two-year collective agreement between the Society and OPG expires on December 31, 2023. The collective agreement was established by an arbitration award issued in December 2021 and covered the first two years of the corresponding three-year moderation period under Bill 124. On May 8, 2023, the arbitrator issued an award that modified the collective agreement to increase compensation in light of the Bill 124 Court Decision. In anticipation of the expiry of the current collective agreement, the parties have commenced negotiations for a renewal of the collective agreement. In the event an agreement is not reached, the parties will proceed to mediation and binding interest arbitration in November 2023. The Society bargaining unit represents over 30 percent of OPG’s workforce.

OPG’s obligations under the collective agreements may be affected by the outcome of the Government of Ontario’s ongoing appeal of the Bill 124 Court Decision.

On June 26, 2023, the Society filed a related employer application with the Ontario Labour Relations Board. The application identified OPG and Atura Power as responding parties and asserts that they constitute a single employer for purposes of the Ontario Labour Relations Act, 1995 , or in the alternative that a sale of business has occurred. Both OPG and Atura Power are opposing the application. The mediation occurred in September 2023 and an additional hearing has been scheduled in January 2024.

24 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

15. BUSINESS SEGMENTS

Segment Income (Loss) For the Three Months Ended September 30, 2023 (millions of dollars) Revenue Leasing revenue Other revenue Total revenue Fuel expense Gross margin Operations, maintenance and administration expenses Depreciation and amortization expenses Accretion on fixed asset removal and nuclear waste management liabilities Earnings on nuclear fixed asset removal and nuclear waste management funds Property taxes Other losses Income (loss) before interest and income taxes Net interest expense	Regulated Nuclear Nuclear Sustainability Hydroelectric Generation Services Generation 1,093 - 343 7 - - - 50 - 1,100 50 343 71 - 86 1,029 50 257 546 50 98 125 - 45 - 293 - - (267) - 6 - - - - 3 352 (26) 111	Unregulated Contracted Hydroelectric and Other Generation Atura Power Other 187 237 7 - - 2 - - 27 187 237 36 17 102 - 170 135 36 59 18 23 42 29 21 2 1 - - - - 7 - - - - 13 60 87 (21)	Elimination **Total **
			- 1,867
			- 9
			(71) 6
			(71) 1,882
			- 276
			(71) 1,606
			(71) 723
			- 262
			- 296
			- (267)
			- 13
			- 16
			- 563
			17
Income before income taxes Income tax expense			546 97
Net income			449

ONTARIO POWER GENERATION 25

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Segment Income (Loss) For the Three Months Ended September 30, 2022 (millions of dollars) Revenue Leasing revenue Other revenue Total revenue Fuel expense Gross margin Operations, maintenance and administration expenses Depreciation and amortization expenses Accretion on fixed asset removal and nuclear waste management liabilities Earnings on nuclear fixed asset removal and nuclear waste management funds Property taxes Other losses (gains) Income (loss) before interest and income taxes Net interest expense	Regulated Nuclear Nuclear Sustainability Hydroelectric Generation Services Generation 1,074 - 364 7 - - - 52 - 1,081 52 364 67 - 80 1,014 52 284 507 52 80 153 - 43 - 282 - - (259) - 5 - - - - 1 349 (23) 160	Unregulated Contracted Hydroelectric and Other Generation Atura Power Other 204 310 3 - - 4 9 - 17 213 310 24 24 179 - 189 131 24 62 17 14 40 28 17 2 - 1 - - - 5 1 1 (2) 1 2 82 84 (11)	Elimination **Total **
			- 1,955 - 11 (66) 12
			(66) 1,978 - 350
			(66) 1,628 (66) 666 - 281 - 285 - (259) - 12 - 2
			- 641
			45
Income before income taxes Income tax expense			596 108
Net income			488

26 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Segment Income (Loss) For the Nine Months Ended September 30, 2023 (millions of dollars) Revenue Leasing revenue Other revenue Total revenue Fuel expense Gross margin Operations, maintenance and administration expenses Depreciation and amortization expenses Accretion on fixed asset removal and nuclear waste management liabilities Earnings on nuclear fixed asset removal and nuclear waste management funds Property taxes Other losses (gains) Income (loss) before interest and income taxes Net interest expense	Regulated Nuclear Nuclear Sustainability Hydroelectric Generation Services Generation 3,159 - 1,120 20 - - - 171 - 3,179 171 1,120 205 - 238 2,974 171 882 1,774 171 288 385 - 135 - 876 - - (789) - 18 - - - - 6 797 (87) 453	Unregulated Contracted Hydroelectric and Other Generation Atura Power Other 590 574 20 - - 4 20 - 91 610 574 115 45 214 - 565 360 115 199 56 60 123 88 56 6 2 1 - - - 15 2 1 (3) - (14) 225 212 11	Elimination **Total **
			- 5,463
			- 24
			(229) 53
			(229) 5,540
			- 702
			(229) 4,838
			(229) 2,319
			- 787
			- 885
			- (789)
			- 36
			- (11)
			- 1,611
			86
Income before income taxes Income tax expense			1,525 220
Net income			1,305

ONTARIO POWER GENERATION 27

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

Segment Income (Loss) For the Nine Months Ended September 30, 2022 (millions of dollars) Revenue Leasing revenue Other revenue Total revenue Fuel expense Gross margin Operations, maintenance and administration expenses Depreciation and amortization expenses Accretion on fixed asset removal and nuclear waste management liabilities Earnings on nuclear fixed asset removal and nuclear waste management funds Property taxes Other losses (gains) Income (loss) before interest and income taxes Net interest expense	Regulated Nuclear Nuclear Sustainability Hydroelectric Generation Services Generation 3,228 - 1,158 20 - - - 150 - 3,248 150 1,158 199 - 232 3,049 150 926 1,612 150 256 453 - 129 - 848 - - (774) - 18 - 1 - - 2 966 (74) 538	Unregulated Contracted Hydroelectric and Other Generation Atura Power Other 612 729 28 - - 11 (16) - 74 596 729 113 44 358 - 552 371 113 178 49 55 118 85 51 6 1 2 - - - 14 2 1 (1) - (8) 237 234 12	Elimination **Total **
			- 5,755 - 31 (202) 6
			(202) 5,792 - 833
			(202) 4,959 (202) 2,098 - 836 - 857 - (774) - 36 - (7)
			- 1,913
			141
Income before income taxes Income tax expense			1,772 326
Net income			1,446

28 ONTARIO POWER GENERATION

ONTARIO POWER GENERATION INC. Notes to the Interim Consolidated Financial Statements (unaudited) For the three and nine month periods ended September 30, 2023 and 2022

16. NET CHANGES IN NON-CASH WORKING CAPITAL BALANCES

	Nine	Months Ended
	September 30
(millions of dollars)	2023	2022
Receivables from related parties	(91)	(24)
Fuel inventory	(59)	(25)
Materials and supplies	20	15
Prepaid expenses	(22)	(14)
Other current assets	192	7
Accounts payable, accrued charges and other payables	(172)	163
Net changes in non-cash workingcapital balances	(132)	122

17. PURCHASE AND SALE OF REAL ESTATE SITES

In October 2022, OPG sold the premises located at 800 Kipling Avenue in Toronto, Ontario. In the fourth quarter of 2022, OPG recognized an after-tax gain on the sale of approximately $111 million, including the impact of revisions to the related asset retirement obligation. In June 2023, upon satisfaction of certain conditions, an additional payment was received in connection with the sale and an additional after-tax gain of approximately $23 million was recognized.

In February 2023, OPG acquired the building and surrounding lands at 1908 Colonel Sam Drive in Oshawa, Ontario, for $102 million. The building will be retrofitted prior to occupancy and will serve as the Company’s new corporate headquarters.

18. ASSETS HELD FOR SALE

In July 2023, Eagle Creek entered into agreements to sell 22 hydroelectric generating stations in the US with a total capacity of approximately 47 megawatts (MW) across a number of regions, along with two storage reservoirs in the Mid-Western US, as part of the Company’s strategy to optimize the US hydroelectric portfolio. The transactions are expected to close in the first quarter of 2024, subject to regulatory approval. The assets are no longer depreciated or amortized effective September 30, 2022, and are held within Other current assets on the interim consolidated balance sheet within the Contracted Hydroelectric and Other Generation business segment.

19. NON-CONTROLLING INTEREST

In 2023, the Company, through Atura Power, entered into partnerships with Ameresco BESS Holdings Inc. to undertake projects to build a battery energy storage system (BESS) and hydrogen production facilities. As part of these partnerships, OPG owns approximately 90 percent of the voting interest in Napanee BESS Inc., which is undertaking the project to build a 250 MW four-hour BESS at the Napanee Generating Station site, and owns 89 percent of the voting interest in Atura Hydrogen Inc., which is structured to build the Niagara Hydrogen Centre, a large-scale hydrogen production facility in Niagara Falls, Ontario.

ONTARIO POWER GENERATION 29