<SUBMISSION>
<ACCESSION-NUMBER>0001137171-02-000056
<TYPE>6-K
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20020331
<FILING-DATE>20020418
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>TRANSALTA CORP
<CIK>0001144800
<ASSIGNED-SIC>4911
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>6-K
<ACT>34
<FILE-NUMBER>001-15214
<FILM-NUMBER>02614798
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>110 12TH AVE SW BOX 1900 STATION M
<STREET2>CALGARY ALBERTA T2P 2MI
<CITY>CALGARY
<STATE>A0
<ZIP>00000
<PHONE>2128948400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>110-12TH AVENUE SW
<CITY>CALGARY ALBERTA CANADA
<STATE>A0
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>tacq1.htm
<TEXT>
<html>
<head>
<title></title>
</head>
<body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000">

<p style="margin-top: 0; margin-bottom: 0" align="center"><strong>FORM 6-K</strong>
<br>

<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>SECURITIES AND EXCHANGE COMMISSION</strong>
<br>

<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Washington, D.C. 20549</strong>

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Report of Foreign Private Issuer </strong>

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Pursuant to Rule 13a-16 or 15d-16 <br>
of the Securities Exchange Act of 1934</strong>

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0">For the period ended March 31, 2002

<p align="center" style="margin-top: 0; margin-bottom: 0">

<p align="center" style="margin-top: 0; margin-bottom: 0"><u>TRANSALTA CORPORATION</u>

<p align="center" style="margin-top: 0; margin-bottom: 0">(Translation of registrant's name into English)

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0"><u>110-12<sup>th</sup> Avenue S.W., Box 1900, Station "M", Calgary, Alberta, T2P 2M1</u>

<p align="center" style="margin-top: 0; margin-bottom: 0">(Address of principal executive offices)

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0">Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

<p align="center" style="margin-top: 0; margin-bottom: 0">Form 20-F____   Form 40-F    <u>X     </u>

<p align="center" style="margin-top: 0; margin-bottom: 0">Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.

<p align="center" style="margin-top: 0; margin-bottom: 0">Yes .....  No ..X...

<p align="center" style="margin-top: 0; margin-bottom: 0">If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
82-________

<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Other events and other Regulation Fair Disclosure</strong>

<p align="center" style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">On April 18, 2002, TransAlta Corporation announced its first quarter 2002 results. A copy of the company's press
release and the report for the quarter ended March 31, 2002 are attached as Exhibits 1 and 2, respectively.

<p style="margin-top: 0; margin-bottom: 0">In addition, on April 18, 2002, the company conducted its quarterly earnings conference call.  During that call, the
information contained in exhibit 99-1 was discussed and the company made the following additional
announcements.

<p style="margin-top: 0; margin-bottom: 0">	The company is making good progress on cost reduction targets and made headway in the quarter on
both fuel and overhead costs. About $80 to $90 million of the previously announced $150 million
target has been identified and the company expects to see the impact of these changes in the run rate in
the second half of the year.

<p style="margin-top: 0; margin-bottom: 0">	The company hopes to bid on future projects in Mexico as early as May 2002.

<p style="margin-top: 0; margin-bottom: 0">	The company reiterated that a 10% increase in earnings from operations for 2002 is achievable if an
economic recovery and an upturn in prices occur in the second half of the year.

<p style="margin-top: 0; margin-bottom: 0">	Operations, maintenance and administration costs for the year are expected to be below last year's
Cdn$7.77/MWh.

<p style="margin-top: 0; margin-bottom: 0">	Debt to capitalization was 53.8% for the quarter and is expected to decrease to 45% following the
closing of the Transmission sale, expected on April 29. This is well below the company's target of
50%.

<p style="margin-top: 0; margin-bottom: 0">	The overall availability rate for the year is expected to be 89-90%, with availability lower in the second
and third quarters and higher in the fourth quarter of the year.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">	<strong>EXHIBITS</strong>

<table  width="100%">
<tr valign="top"><td align="center" width="15%">
    <p style="margin-top: 0; margin-bottom: 0">Exhibit 1</p>
  </td>
<td align="center" width="86%">
  <p style="margin-top: 0; margin-bottom: 0">Press Release dated April 18, 2002.</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Exhibit 2</p>
  </td>
<td align="center">
  <p style="margin-top: 0; margin-bottom: 0">Quarterly report for the three-month period ended March 31, 2002, which
includes Management's Discussion and Analysis and consolidated financials
statements.</p>
  </td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
Exhibit 1
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>TransAlta announces first quarter results</strong>

<br wp="br1"><br wp="br2">
<p align="center" style="margin-top: 0; margin-bottom: 0">CALGARY, Alberta (April 18, 2002) &#173; TransAlta Corporation (TSE: TA; NYSE: TAC) today announced first
quarter 2002 earnings from continuing operations of $40.2 million ($0.24 per share), compared to $55.9 million
($0.33 per share) for the same period in 2001. Operating cash flow excluding working capital changes improved
from $137.3 million in the first quarter of 2001 to $171.3 million. Financial results reflect improved plant operating
performance, offset by lower power prices and Energy Marketing results.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">"Our power plant operating performance was strong, with availability levels and production output up. Excellent
progress was also made in reducing costs and operating cash flow," said Steve Snyder, TransAlta's president and
CEO. "Energy Marketing results were disappointing, as they encountered difficult market conditions compared to
last year."

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Net earnings for the quarter, including discontinued operations, were $51.4 million ($0.30 per share) compared to
2001 earnings of $67.6 million ($0.40 per share). Cash flow from operating activities, including changes in working
capital was $129.0 million, compared to $388.7 million in first quarter 2001.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Discontinued operations in both years include net earnings from the Transmission operation; results for 2001 also
include the Edmonton Composter operation.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><strong>TransAlta consolidated financial highlights</strong>

<div align="center">
  <center>

<table  width="90%">
<tr valign="top"><td align="center" width="47%">
    <p style="margin-top: 0; margin-bottom: 0"><em>(In millions except per share
amounts)</p>
    </em></td>
<td colspan="4" align="center" width="13%">
  <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="2" align="center">
  <p style="margin-top: 0; margin-bottom: 0">2002</p>
  </td>
<td colspan="2" align="center" width="13%">
  <p style="margin-top: 0; margin-bottom: 0">2001</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="center">
  <p style="margin-top: 0; margin-bottom: 0">Amount</p>
  </td>
<td align="center" width="13%">
  <p style="margin-top: 0; margin-bottom: 0">Per share</p>
  </td>
<td align="center">
  <p style="margin-top: 0; margin-bottom: 0">Amount</p>
  </td>
<td align="center" width="13%">
  <p style="margin-top: 0; margin-bottom: 0">Per share</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Revenue from continuing
operations</p>
  </td>
<td colspan="2" align="center">
  <p style="margin-top: 0; margin-bottom: 0">$ 1,067.4</p>
  </td>
<td colspan="2" align="center">
  <p style="margin-top: 0; margin-bottom: 0">$
1,390.6</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Net earnings from continuing
operations*</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
40.2</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.24</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
55.9</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.33</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Discontinued operations</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
11.2</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.06</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
11.7</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.07</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Net earnings*</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
51.4</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.30</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
67.6</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 0.40</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Cash flow from operating activities</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
129.0</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">$
388.7</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">2002</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">2001</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Availability (%)</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">92.5</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">88.0</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Production (GWh)</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">11,614</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">11,240</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Electricity trading volumes (MWh)</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">21,200</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">3,490</p>
  </td></tr>
<tr valign="top"><td align="center">
    <p style="margin-top: 0; margin-bottom: 0">Gas trading volumes (million GJ)</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">59.8</p>
  </td>
<td colspan="2" align="right">
  <p style="margin-top: 0; margin-bottom: 0">12.9</p>
  </td></tr></table>

  </center>
</div>

<p style="margin-top: 0; margin-bottom: 0">* applicable to common shareholders, net of preferred securities distributions

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">In first quarter 2002, TransAlta:

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">	Received regulatory approval for the sale of the majority of its regulated Alberta transmission business to AltaLink.
The transaction, which was announced in July 2001, is anticipated to close April 29 and generate proceeds of
approximately $850 million, for an after-tax gain of approximately $100 million ($0.59 per share).

<p style="margin-top: 0; margin-bottom: 0"><strong>- more -</strong>

<p align="center" style="margin-top: 0; margin-bottom: 0">	Received regulatory approval for the company's proposed 900-megawatt expansion to its existing Keephills facility.
TransAlta is updating its feasibility study factoring in the impact of various market and environmental factors
included in the regulatory approval. The company expects to announce its plans in second half 2002.

<p style="margin-top: 0; margin-bottom: 0">	Announced a normal course issuer bid to repurchase up to three million shares for cancellation beginning Feb.
21, 2002. To date, 105,000 shares have been purchased on the TSE under the new program. TransAlta purchased
for cancellation 2,156,100 of its common shares through a previously announced normal course issuer bid that
expired in February 2002.

<p style="margin-top: 0; margin-bottom: 0">	Announced that the Canadian Clean Power Coalition (CCPC), of which it is a member, will research, develop,
construct and operate a full-scale demonstration plant by 2007 to test the technical, environmental and economic
viability of new clean coal technology for retrofit onto an existing coal plant.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">In order to improve plant performance and fulfill environmental obligations, the second of two scrubbers is being
installed at the Centralia plant. The planned outage of Unit 1, which began April 15 and will last approximately nine
weeks, includes a turbine upgrade and scheduled maintenance. This outage was built into sales contracts and
earnings forecasts. Once complete, it will increase total plant capacity to 1404 MW, up from 1340 MW when
purchased in May 2000.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">The <em>force majeure</em> decision related to TransAlta's Wabamun outage is currently in binding arbitration, with a
decision expected in first half 2002. The 300 MW Wabamun four unit was shut down in August 2000 due to cracks
in its boiler tubing and returned to service in June 2001. Under the <em>force majeure</em> article of the Power Purchase
Arrangement, TransAlta believes that the company should not be obligated to repay the cost of obtaining an
alternative source of electricity during the period of repair and therefore no specific amount has been provided for
potential obligations.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">In fourth quarter 2000, TransAlta made a provision of US$29 million against US$58 million owing from the California
Independent System Operator and the California Power Exchange. No change has been made to the provision due to
continuing uncertainty in California.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><em>TransAlta Corporation is Canada's largest non-regulated electric generation and marketing company, with more than $8
billion in assets and 9,000 megawatts of capacity either in operation or under construction. As one of North America's lowest-cost operators, our growth is focused on developing coal- and gas-fired generation in Canada, the U.S. and Mexico.</em>

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0"><em>This news release may contain forward-looking statements, including statements regarding the business and anticipated
financial performance of TransAlta Corporation. These statements are subject to a number of risks and uncertainties that may
cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that
could cause such differences include legislative or regulatory developments, competition, global capital markets activity,
changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions in geographic
areas where TransAlta Corporation operates.</em>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0" align="center">&#173; 30 &#173;

<p style="margin-top: 0; margin-bottom: 0">For more information:

<br wp="br1"><br wp="br2">
<table  width="100%">
<tr valign="top"><td width="49%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Media inquiries:</strong></p>
  </td>
<td width="10%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="51%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>Investor inquiries:</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Nadine Walz</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Daniel J. Pigeon</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Media Relations Specialist</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Director, Investor Relations</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Phone:  (403) 267-3655   </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Phone:  1-800-387-3598 in Canada and U.S.</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Pager: (403) 213-7041</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Phone:  (403) 267-2520    Fax (403) 267-2590</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Email:  media_relations@transalta.com</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>E-mail:  investor_relations@transalta.com</strong></p>
  </td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0">Exhibit 2

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0"><strong>TRANSALTA CORPORATION</strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>Q1 2002</strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>Management's Discussion and Analysis</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">This discussion and analysis should be read in conjunction with the unaudited consolidated
financial statements of TransAlta Corporation (TransAlta or the corporation) as at and for the
three months ended March 31, 2002 and 2001, and should also be read in conjunction with the
audited consolidated financial statements and Management's Discussion and Analysis contained
in TransAlta's annual report for the year ended Dec. 31, 2001.  The consolidated financial
statements have been prepared in accordance with Canadian generally accepted accounting
principles (GAAP).  All tabular amounts in the following discussion are in millions of Canadian
dollars unless otherwise noted.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>FORWARD-LOOKING STATEMENTS</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">This report contains forward-looking statements, including statements regarding the business and
anticipated financial performance of TransAlta.  These statements involve known and unknown
risks and relate to future events, future financial performance and projected business results.  In
some cases, forward-looking statements can be identified by terms such as 'may', 'will',
'believe', 'expect', 'potential', 'enable', 'continue' or other comparable terminology.  These
forward-looking statements are subject to a number of uncertainties that may cause actual results
to differ materially from those contemplated in the forward-looking statements.  Some of the
factors that could cause such differences include legislative and regulatory developments that
could affect revenues, costs, the speed and degree of competition entering the market, global
capital markets activity, timing and extent of changes in prevailing interest rates, currency
exchange rates, inflation levels and general economic conditions in geographic areas where
TransAlta operates, results of financing efforts, changes in counterparty risk and the impact of
accounting policies issued by Canadian and United States standard setters.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>RESULTS OF OPERATIONS </strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The results of operations are organized by consolidated results and by business segments.
TransAlta has two business segments:  Generation and Energy Marketing.  A third business
segment, Independent Power Projects (IPP), was combined with the Generation segment
effective Jan. 1, 2002, following changes to TransAlta's organizational structure.  A fourth
business segment, Transmission, was reclassified as a discontinued operation following the
announcement on July 4, 2001 of the agreement to dispose of the business. The corporate group
provides finance, treasury, legal, human resources and other administrative services to the
business segments. The business segments assume responsibility for their operating results
measured as earnings before interest, taxes and non-controlling interests (EBIT).  EBIT should
not be considered an alternative to, or more meaningful than, net income or cash flow as
determined in accordance with Canadian GAAP as an indicator of the corporation's performance
or liquidity.  TransAlta's EBIT is not necessarily comparable to a similarly titled measure of
another company.  EBIT can be determined from the consolidated statements of earnings by
adding prior period regulatory decisions to operating income.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Corporate overheads that are not directly attributable to discontinued operations are allocated to
the business segments.  Prior period amounts have been restated.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>HIGHLIGHTS</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The following table depicts key financial results and statistical operating data:

<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="99%">
<tr valign="top"><td width="53%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td colspan="2" width="10%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td colspan="2" width="11%">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Availability</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>92.5%</strong></td>
<td width="11%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"></strong>88.0%</td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Production (GWh)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>11,614</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">11,240</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Electricity trading volumes (MWh)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>21,200</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">3,490</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Gas trading volumes (million GJ)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>59.8</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">12.9</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>(in millions of Canadian dollars except per share amounts)</p>
  </td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Amount</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Per
common
share</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Amount</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Per common
share</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Revenues<sup>1</sup></p>
  </td>
<td><sup>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong></sup> $ 1,067.4 </strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $   1,390.6</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Net earnings from continuing operations<sup>2</sup></p>
  </td>
<td><sup>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong></sup> $       40.2 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            &nbsp;$ 0.24 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $        55.9</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             $ 0.33</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Discontinued operations<sup>3</sup></p>
  </td>
<td><sup>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong></sup>          11.2 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            0.06 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>            11.7</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             0.07</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Net earnings applicable to common shareholders</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $       51.4 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $        0.30 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $        67.6</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $          0.40</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Cash flow from operating activities</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $     129.0 </strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $      388.7</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><sup>1</sup> From continuing operations.</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="5">
    <p style="margin-top: 0; margin-bottom: 0"><sup>2</sup> Continuing operations include the Generation and Energy Marketing segments plus corporate costs not directly attributable to
discontinued operations, and are net of preferred securities distributions.</p>
  </td></tr>
<tr valign="top"><td colspan="5">
    <p style="margin-top: 0; margin-bottom: 0"><sup>3</sup> Discontinued operations include the Transmission operation and the Edmonton Composter operation.  An agreement to sell the
Transmission operation was entered into on July 4, 2001, with the transaction expected to close April 29, 2002.  The Edmonton
Composter was sold on June 29, 2001.</p>
  </td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Net earnings from continuing operations in the first quarter of 2002 compared to the first quarter
of 2001 reflect increased production and availability offset by lower pricing and reduced energy
marketing results.  Cash flow before changes in non-cash working capital and unrealized energy
marketing gains and losses was comparable to the same period in 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>DISCUSSION OF SEGMENTED RESULTS</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>GENERATION</strong>:  <strong><em>Owns and operates
coal-, hydro- and gas-fired plants and related mining
operations, with a total generating capacity of 7,402 MW.</strong></em>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Effective Jan. 1, 2002, TransAlta's organizational structure changed to combine the Generation
and IPP business segments into one Generation segment to improve the corporation's operational
capability and reliability through the sharing of resources and best practices across all generating
assets.  Prior period amounts have been restated to reflect the combination of these segments.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<table border="0" width="100%">
  <tr>
    <td width="75%">
      <p align="right">2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="25%">
      <p align="center">2001</td>
  </tr>
</table>
<div align="center">
  <center>
<table  width="100%">
<tr valign="top"><td width="35%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="15%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
<p align="center" style="margin-top: 0; margin-bottom: 0"> Total </td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"> Per MWh</p>
 </td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"> Total</p>
 </td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0">Per MWh</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Revenues</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $   420.8 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $    36.23 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $    655.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $     58.30</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Fuel and purchased power</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>    (173.8)</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>    (14.96) </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>      (411.4)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">     (36.60)</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Gross margin</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      247.0 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>       21.27 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>       243.9</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">        21.70</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Operations, maintenance and administration</p>
  </td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>        71.6 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         6.16 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>         62.7</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         5.58</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        50.1 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         4.31 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>         42.5</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         3.78</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Taxes, other than income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          7.0 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         0.60 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>           7.5</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         0.67</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">EBIT before corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      118.3 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>       10.20 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>       131.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">        11.67</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        16.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         1.43 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>         21.0</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         1.87</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">EBIT</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $   101.7 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $      8.77 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $    110.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $       9.80</p>
 </td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="100%">
<tr valign="top"><td colspan="2" width="35%">
    <p style="margin-top: 0; margin-bottom: 0">Revenue and gross margin (GM) analysis</p>
  </td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="15%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">2002</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="center">2001</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Revenue</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="center">GM</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="center">Revenue</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="center">GM</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Contract</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $   363.2 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $    220.7 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $    324.1</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $       30.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Merchant</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        36.4 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           5.1 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>297.3</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">179.5</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Ancillary services</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        21.2 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         21.2 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>33.9</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">33.9</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $   420.8 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $    247.0 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $    655.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $     243.9</p>
 </td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="88%">
<tr valign="top"><td width="40%">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="13%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong></strong>Production
(GWh)</td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0">Revenue</p>
  </td>
<td width="13%">
  <p style="margin-top: 0; margin-bottom: 0">EBIT</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31, 2001</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">      11,240</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $      655.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $    110.2</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Lower market prices</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">       (248.0)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">      (248.0)</p>
  </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Lower purchased power requirements</p>
  </td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0">            -   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">       236.8</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Net improved availability and production</p>
  </td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0">          374 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">          13.5</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           8.0</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Lower fuel costs per megawatt hour</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           6.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Timing of scheduled maintenance</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         (3.0)</p>
  </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Increased depreciation from 2001 capital additions</p>
  </td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0">            -   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         (7.6)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Decreased corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           4.4</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Other</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         (5.4)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31, 2002</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">      11,614</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $      420.8</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $    101.7</p>
 </td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>RESULTS</strong>  Generation's annual revenues are derived from the production of electricity, of
which approximately 90 per cent are based upon contracted prices, including capacity payments,
and approximately 10 per cent are subject to market pricing and from the provision of other
ancillary services such as steam and system support.  The percentage allocations are subject to
seasonal variations.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Revenues received under long-term contractual arrangements are not subject to major
fluctuations in the spot price for electricity.  These contracts covered approximately 91 per cent
of production in the first quarter of 2002 (2001 - 88 per cent) at an average price of $34.70 per
megawatt hour (MWh) (2001 - $33.20 per MWh) and have remaining terms ranging from one to
23 years.  The remaining nine per cent of first quarter of 2002 production (2001 &#173; 12 per cent)
was subject to market pricing at an average price of $34.48 per MWh (2001 - $212.09 per
MWh).

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Availability for the first quarter of 2002 was 92.5 per cent compared to 88.0 per cent in the first
quarter of 2001.  The increase is primarily a result of improved performance at the Centralia and
Poplar Creek plants and the return to service of Wabamun unit four.  Generation's production
increased to 11,614 GWh from 11,240 GWh in the same period of 2001, reflecting the increased
availability at the above plants.  Timing of maintenance in the first quarter of 2002 as well as
lower hydro production partially offset these production gains.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="634">
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">AVERAGE MONTHLY SPOT ELECTRICITY PRICES</p>
  </td>
<td colspan="2" width="171">
<p align="right" style="margin-top: 0; margin-bottom: 0">3 months ended March 31</td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="85">
<p align="center" style="margin-top: 0; margin-bottom: 0">2002</td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0" align="center">2001</p>
  </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">Alberta System Market Price (Cdn$)</p>
  </td>
<td width="85">
<p align="right" style="margin-top: 0; margin-bottom: 0"> $
35.74 </td>
<td width="80" align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $
115.07</p>
 </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">Mid-Columbia Price (US$)</p>
  </td>
<td width="85">
<p align="right" style="margin-top: 0; margin-bottom: 0"> $         24.61 </td>
<td width="80" align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $     265.80</p>
 </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="85">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="85">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">SPARK SPREADS <sup>1</sup></p>
  </td>
<td width="85">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="85">
<p align="center" style="margin-top: 0; margin-bottom: 0">2002</td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0" align="center">2001</p>
  </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">Alberta System Market Price vs. AECO
    (Cdn$)</p>
  </td>
<td width="85">
<p align="right" style="margin-top: 0; margin-bottom: 0"> $         10.78 </td>
<td width="80" align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $         50.98</p>
 </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0">Mid-Columbia Price vs. Sumas (US$)</p>
  </td>
<td width="85">
<p align="right" style="margin-top: 0; margin-bottom: 0"> $          8.04 </td>
<td width="80" align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $      218.91</p>
 </td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="85">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td width="449">
    <p style="margin-top: 0; margin-bottom: 0"><sup>1</sup> For a 7,000 Btu/KWh plant</p>
  </td>
<td width="85">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="80">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">As shown in the above table, for the first quarter of 2002, spot prices and spark spreads (sales
price less cost of fuel) in both Alberta and the Pacific Northwest markets declined substantially
compared to the same period of 2001.  These price declines were driven by a
return to a more rational market. Within this market, prices were softer due to reduced demand
as a result of lower economic activity, an unseasonably warm January and
February 2002, additional generating capacity added
to these markets and lower gas prices.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">As a result of the factors discussed above, revenue for the first three months of 2002 decreased
by $234.5 million or 36 per cent from the same period of 2001 to $420.8 million from $655.3
million.  Correspondingly, total revenue per MWh decreased to $36.23 per MWh in the first
quarter of 2002 compared to $58.30 per MWh in the same period of 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Fuel and purchased power decreased by 58 per cent to $173.8 million ($14.96 per
MWh) from
$411.4 million ($36.60 per MWh).  Purchased power is the cost incurred to acquire electricity
from the market to fulfill contracted commitments during planned and unplanned outages.  Any
electricity not required to fulfill these commitments is sold back into the market at spot prices.
In the first quarter of 2001, lower availability at the Centralia plant resulted in the purchase of
516 GWh of electricity totaling $242.4 million.  Of this amount, $152.7 million (340 GWh at an
average price of $447.94 per MWh) was used to fulfill delivery commitments and $89.7 million
(175 GWh at an average price of $511.51 per MWh) was not required and sold back into the spot
market.  In 2002, improved availability and lower market prices resulted in a reduction in
purchased power costs to $5.6 million (192 GWh at an average price of $29.40 per
MWh).

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Fuel costs, excluding purchased power, were $168.2 million ($14.48 per
MWh) in the first
quarter of 2002, compared to $169.0 million ($15.04 per MWh) in 2001, reflecting higher
production ($5.5 million) that was more than offset by lower transmission charges, cost reduction
initiatives and decreased natural gas prices ($6.3 million).

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Operations, maintenance and administration (OM&amp;A) expense increased by 14 per cent to $71.6
million ($6.16 per MWh) in the first quarter of 2002 from $62.7 million ($5.58 per
MWh) in the
first quarter of 2001 primarily as a result of the timing of expenditures related to additional major
maintenance in the quarter compared to the same quarter in the previous year and higher business
development activity to support growth initiatives.  The cost reduction initiatives identified in the
fourth quarter of 2001 were being implemented during the first quarter of 2002.  The benefits of
these initiatives should begin to be realized during the second half of the year and beyond.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization increased by 18 per cent to $50.1 million ($4.31 per
MWh) from
$42.5 million ($3.78 per MWh) as a result of 2001 capital expenditures.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Taxes other than income taxes remained consistent with 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">ENERGY MARKETING:  <em>Derives revenue and earnings from the wholesale trading of
electricity and other energy-related commodities and derivatives.  These activities also provide
critical market knowledge to help identify growth opportunities and support corporate
investment decisions.  </em>

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="86%">
<tr valign="top"><td width="53%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</td>
<td width="16%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="16%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td width="13%">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Revenues</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            646.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $       735.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Trading purchases</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             (647.7)</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>        (684.1)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Gross margin</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  (1.1)</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>            51.2</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Operations, maintenance and administration</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                    2.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>               4.4</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                    0.7 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>               1.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">EBIT before corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  (4.4)</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>            45.2</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                    2.1 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>               1.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">EBIT</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $               (6.5)</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $         43.3</p>
 </td></tr></table>

  </center>
</div>
<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<div align="center">
  <center>
<table  width="97%">
<tr valign="top"><td width="47%">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" width="14%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Trading volumes</strong></td>
<td width="11%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong> Electricity (MWh) </strong></td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0"><strong> Gas (million GJ) </strong></p>
  </td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>Revenue</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>EBIT</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>3 months ended March 31, 2001</p>
  </td>
</center>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">              3,490 </td>
<center>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">                 12.9 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $       735.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $       43.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Decreased pricing and margins
    offset by increased trading
activity</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">            17,710 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 46.9</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           (88.7)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         (52.3)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Decreased operating costs</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">                      -  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             1.8</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Lower depreciation and amortization costs</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">                      -  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             0.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Other</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">                      -  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      -</p>
   </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           (0.2)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>3 months ended March 31, 2002</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">            21,200 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                 59.8 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $       646.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $        (6.5)</strong></p>
  </td></tr></table>

  </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Trading volumes during the quarter increased to 21,200 MWh of electricity traded in 2002
compared to 3,490 MWh in 2001 and increased to 59.8 million gigajoules (GJ) of gas traded in
2002 compared to 12.9 million GJ in 2001.  The increases are a result of increased real-time and
term trading activities.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Revenues decreased by $88.7 million to $646.6 million in the first quarter of 2002 compared to
$735.3 million in the first quarter of 2001 as increased trading volumes were more than offset by
lower market prices.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Gross margin decreased to a loss of $1.1 million for the first three months of 2002 compared to
income of $51.2 million for the same period of 2001 due to significantly lower market prices and
reduced market liquidity, particularly in the Pacific Northwest.  In the first quarter of 2001, the
average market price in the Pacific Northwest was US$264 per MWh (approximately Cdn$419
per MWh) compared to US$25 per MWh (approximately Cdn$40 per MWh) in the first quarter
of 2002.  The 2001 prices were influenced by the process of deregulation in California
exacerbated by a drought in the Pacific Northwest and historically high natural gas prices.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Market liquidity has been adversely affected by the collapse of Enron Corporation, the industry's
largest trader, concerns about the credit quality of the major marketers and the loss of confidence
of wholesale customers.  While the market for shorter-term transactions has continued to
function reasonably well, the liquidity in the medium- and longer-term transactional markets has
declined significantly during the quarter.  In February and March 2002, the escalation of unrest
in the Middle East and harsh winter weather in March 2002, drove natural gas prices significantly above
fundamental support levels and previous market predictions, however natural gas prices
remained lower than in the first quarter of 2001. TransAlta had anticipated
first quarter electricity price deterioration, however electricity prices followed escalating natural
gas prices and certain of TransAlta's trading positions for late 2002 and early 2003 were
adversely affected.  The lack of liquidity in the medium- to longer-term markets due to Enron's
collapse made it difficult to exit these positions at minimal cost.  However, TransAlta's financial
and risk management controls, including stop-loss provisions, functioned as designed and minimized the extent of losses
incurred and were effective in preventing further losses.  As a result of the significantly
diminished liquidity in the medium- to longer-term markets, TransAlta will continue to have a low level
of activity in these markets until liquidity returns.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">OM&amp;A expense for the Energy Marketing segment decreased to $2.6 million in the first three
months of 2002 compared to $4.4 million in the same period of 2001 due primarily to decreased
salaries and incentives.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization decreased to $0.7 million from $1.6 million in the prior period, as
goodwill arising from previous acquisitions, previously recorded as acquired intangibles, is no
longer being amortized in accordance with this new accounting standard issued by the Canadian
Institute of Chartered Accountants.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">With the exception of transmission contracts, the fair value of all energy trading activities is
based on quoted market prices.  The fair value of transmission contracts is based on quoted
market prices and a spread option valuation model.  In the first quarter of 2002, realized and
unrealized changes in the fair value of energy trading contracts, exclusive of hedging
transactions, were income of $27.7 million and a loss of $28.8 million, respectively.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Valuations of energy trading contracts existing at March 31, 2002, exclusive of hedging
transactions, maturing over each of the next five calendar years and thereafter are as follows:

<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="86%">
<tr valign="top"><td width="33%">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></p>
  </td>
<td width="8%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2003</strong></p>
  </td>
<td width="8%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2004</strong></p>
  </td>
<td colspan="2" width="0%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2005</strong></p>
  </td>
<td width="8%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2006</strong></p>
  </td>
<td width="9%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2007
and
thereafter</strong></p>
  </td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>Total</strong>
  </p>
</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Prices actively quoted</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">$ (7.9)</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $  (1.2)</strong></p>
  </td>
<td colspan="2">
  <p style="margin-top: 0; margin-bottom: 0"><strong>  $   (0.1)</strong></p>
  </td>
<td width="8%">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$  (0.1)</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $ (0.1)</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$2.5</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>     $  (6.9) </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Prices based on models or
other valuation methods</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">   5.4 </strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>       1.4 </strong></p>
  </td>
<td colspan="2">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            -  </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>          -
</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>
-  </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>-</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>            6.8
</strong></p>
  </td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$ (2.5)</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $    0.2 </strong></p>
  </td>
<td colspan="2">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$   (0.1)</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$  (0.1)</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$  (0.1)</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$2.5</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>   $    (0.1) </strong></p>
  </td></tr></table>

</center>
    </div>
    <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Energy Marketing's trading receivables and payables include invoiced amounts for settled
transactions (realized) and the fair value of unsettled transactions (unrealized), based on
current market prices. </strong>

<br wp="br1"><br wp="br2">
    <div align="center">
      <center>
<table  width="634">
<tr valign="top"><td width="216"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="112">
<p align="center" style="margin-top: 0; margin-bottom: 0">Balance</strong></td>
<td width="112"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="2" width="168">
  <p style="margin-top: 0; margin-bottom: 0">Unrealized balance</p>
  </td></tr>
<tr valign="top"><td width="216"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="112">
<p align="center" style="margin-top: 0; margin-bottom: 0">March 31, </strong></td>
<td align="center" width="112">
  <p style="margin-top: 0; margin-bottom: 0"><strong>Dec. 31,</strong></p>
  </td>
<td width="86"><strong>
<p align="center" style="margin-top: 0; margin-bottom: 0">March 31, </strong></td>
<td width="76">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><strong>Dec. 31,</strong></p>
  </td></tr>
<tr valign="top"><td width="216"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="112">
<p align="center" style="margin-top: 0; margin-bottom: 0">2002</strong></td>
<td align="center" width="112">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2001</strong></p>
  </td>
<td width="86">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><strong>2002</strong></p>
  </td>
<td width="76">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><strong>2001</strong></p>
  </td></tr>
<tr valign="top"><td width="216">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Accounts receivable</strong></p>
  </td>
<td width="112"><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $       656.5 </strong></td>
<td align="right" width="112">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $         700.8</p>
 </td>
<td align="right" width="86">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $   536.6 </strong></p>
  </td>
<td align="right" width="76">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $     370.9</p>
 </td></tr>
<tr valign="top"><td width="216">
    <p style="margin-top: 0; margin-bottom: 0">Accounts payable</p>
  </td>
<td width="112">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $        (599.8)</strong></td>
<td align="right" width="112">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $       (642.7)</p>
  </td>
<td align="right" width="86">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $ (536.7)</strong></p>
  </td>
<td align="right" width="76">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $   (339.6)</p>
  </td></tr></table>

</center>
      </div>
      <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>NET INTEREST EXPENSE, FOREIGN EXCHANGE, OTHER EXPENSE, NON-CONTROLLING INTERESTS AND PREFERRED SECURITIES DISTRIBUTIONS  </strong>

<br wp="br1"><br wp="br2">
      <div align="center">
        <center>
<table  width="70%">
<tr valign="top"><td width="69%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="15%">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td width="15%" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Net interest expense</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $       19.2 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $       33.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Other expense</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>             2.0 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>             1.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Foreign exchange gain</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>           (0.6)</strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>           (0.7)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Non-controlling interests</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>             6.4 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>             6.8</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Preferred securities distributions, net of tax</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>             5.5 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>             3.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
</center>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="right"><strong> $       32.5 </strong></p>
</td>
<center>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $       44.6</p>
 </td></tr></table>

        </center>
      </div>
      <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong></strong>Net interest expense (net of interest income, capitalized interest, and amounts allocated to
discontinued operations) decreased to $19.2 million in the first three months of 2002 compared
to $33.9 million in the comparable period of 2001.  This resulted from the impact of lower short-term interest rates on a higher portion of debt, interest income of $3.3 million earned on the
deferred accounts receivable related to the discontinued Alberta Distribution and Retail operation
and interest earned on the $11.0 million Temporary Suspension Regulation recorded in the fourth
quarter of 2001.   Increased debt was used to fund capital expenditures and increased assets
under construction, and the related interest was capitalized.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The decrease in earnings attributable to non-controlling interests reflects the redemption of the
preferred shares of TransAlta Utilities Corporation for $121.6 million in September 2001,
resulting in lower subsidiary preferred share dividends, partially offset by increased earnings
from the 49.99% non-controlling interest in TransAlta Cogeneration, L.P. due to the addition of
the Fort Saskatchewan plant in the third quarter of 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The increase in preferred securities distributions, net of tax, reflects the issuance of $175.0
million of 7.75 per cent preferred securities in November 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Other expense and foreign exchange gains were consistent with prior periods.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong></strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>INCOME TAXES</strong>

<br wp="br1"><br wp="br2">
<table  width="74%">
<tr valign="top"><td width="71%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="14%">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td width="14%" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Income taxes</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $       22.5 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $       53.0</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Effective tax rate</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>30.2%</strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>44.6%</p>
  </td></tr></table>

      <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Income taxes decreased to $22.5 million in the first quarter of 2002 compared to $53.0 million
for the same period in 2001, reflecting decreased pre-tax earnings.  The effective income tax rate,
expressed as a percentage of earnings from continuing operations before income taxes and non-controlling interests, decreased to 30.2 per cent from 44.6 per cent due to lower earnings from
higher tax rate jurisdictions, lower Federal and Alberta tax rates and as a result of the
corporation's financing structures, the benefits of which do not fluctuate with earnings.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>DISCONTINUED OPERATIONS</strong>

<br wp="br1"><br wp="br2">
<table  width="72%">
<tr valign="top"><td width="65%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="17%">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td width="17%" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Transmission operation</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $           11.2 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $           11.4</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Edmonton Composter operation</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                   -   </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                0.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="right"><strong> $           11.2 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $           11.7</p>
 </td></tr></table>

      <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">TransAlta entered into an agreement on July 4, 2001 to sell its Transmission operation for
proceeds of approximately $850 million, which will result in an after-tax gain of approximately
$100 million.  Regulatory approval of the sale was received on March 28, 2002, and the
transaction is expected to close on April 29, 2002.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The discontinued Transmission operation contributed after-tax earnings of $11.2 million in the
first three months of 2002 consistent with after-tax earnings of $11.4 million in the first three
months of 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">In June 2001, TransAlta sold its Edmonton Composter for proceeds of $97.0 million, which
approximated its book value.  After-tax earnings from the discontinued operation were $0.3
million for the three months ended March 31, 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">FINANCIAL POSITION

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The following chart outlines significant changes in the consolidated balance sheet from Dec. 31,
2001 to March 31, 2002:

<br wp="br1"><br wp="br2">
      <div align="center">
        <center>
<table  width="893">
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="88">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Increase/</strong></td>
<td width="36"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em>(in millions of Canadian dollars)</em></p>
  </td>
<td width="88"><em>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong></em>(Decrease)</strong></td>
<td width="36"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><b>Explanation</b></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Cash</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">          $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
38.3 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Refer to Consolidated Statements of Cash Flows.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Accounts receivable</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">         (87.7)</td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Decrease due to timing of receipt of Generation receivables.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Trading accounts receivable</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">        (44.3) </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Increased trading volumes were more than offset by lower prices,
resulting in lower outstanding accounts receivable and accounts
payable balances.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Income taxes receivable</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">        102.2 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Final instalment of 2001 income taxes.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Capital assets</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">        185.7 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Capital expenditures and construction activity during the period
offset by depreciation.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Short-term debt</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">        215.0 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Increased short-term borrowings financed capital expenditures
during the period.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Accounts payable and accrued liabilities</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">         (47.3)</td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Decrease due to the timing of expenditures.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Trading accounts payable</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">        (42.9) </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Increased trading volumes were more than offset by lower prices,
resulting in lower outstanding accounts receivable and accounts
payable balances.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Long-term debt (including current portion)</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">          30.5 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Increased borrowings under U.S. commercial paper facility as a
hedge of U.S. operations.</em></p>
  </td></tr>
<tr valign="top"><td width="230">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Shareholders' equity</p>
  </td>
<td width="88">
<p align="right" style="margin-top: 0; margin-bottom: 0">          19.3 </td>
<td width="36">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="513">
  <p style="margin-top: 0; margin-bottom: 0"><em>Net earnings offset by dividends and net issuance of common
shares.</em></p>
  </td></tr></table>

        </center>
        </div>
        <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><em><strong>STATEMENTS OF CASH FLOWS</strong></em>

<br wp="br1"><br wp="br2">
        <div align="center">
          <center>
<table  width="92%">
<tr valign="top"><td width="18%">
    <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong>3 months ended
March 31</em></p>
</td>
<td width="10%"><em>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong></em>2002</strong></td>
<td width="10%">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td>
<td width="60%">
  <p style="margin-top: 0; margin-bottom: 0">Explanation</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Cash, beginning of
period</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>$  62.0 </strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>$  53.8</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Cash provided by
(used in):</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em></em>Operating activities</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>  129.0 </strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>  388.7</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><em>Timing of accounts receivable relating to the Power Pool for Alberta
Generation ($170.0 million) and the final instalment for 2001 income
taxes recorded in the first quarter of 2002 ($109.0 million).</em></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Investing activities</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>(272.7)</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>(101.1)</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><em>In 2002, capital expenditures of $269.3 million consisted primarily of
construction at the Big Hanaford, Campeche, Chihuahua and Sarnia
plants.</em></p>
  </td></tr>
<tr valign="top"><td><em></em>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em>In 2001, capital expenditures relating primarily to the installation of a
scrubber at the Centralia plant and construction of the Sarnia and
Campeche plants used cash of $161.4 million; proceeds on the disposal
of the Mildred Lake plant provided cash of $60.3 million.</em></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Financing activities</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>  187.5 </strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>(299.7)</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><em>In 2002, increased short-term and long-term borrowings provided cash of
$245.5 million, which was used to finance capital expenditures
discussed above, distributions on preferred securities of $9.2 million,
cash dividends of $28.2 million and the net repurchase of common
shares of $13.1 million.</em></p>
  </td></tr>
<tr valign="top"><td><em></em>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em>In 2001, short-term debt repayments of $279.1 million and cash
dividends of $40.0 million were offset by net long-term borrowings of
$32.7 million.</em></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Translation of
foreign currency
cash</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>   (5.5)</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>      6.8</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Cash, end of period</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>$100.3 </strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>$  48.5</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr></table>

          </center>
        </div>
        <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>SUBSEQUENT EVENT</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong></strong>On April 16, 2002, the Alberta Energy and Utilities Board
(EUB) rendered a negative decision of
$2.5 million after-tax with respect to TransAlta's hydro bidding strategy in 2000.  The impact of
regulatory decisions is recorded when the effect of such decisions is known, without adjustment
to the financial statements of prior periods.  Consequently, the adjustment will be recorded in the
second quarter of 2002.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">OUTLOOK

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The key factors affecting the financial results for 2002 continue to be the availability of and
production from generating assets, the pricing applicable to non-contracted production, the costs
of production and the volume and gross margin applicable to energy marketing activities.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Availability and production for the second quarter will be negatively impacted by scheduled
maintenance and a nine-week scheduled outage at one of the Centralia units to increase the plant
capacity and install the second scrubber as part of the environmental obligations that were
assumed when the plant was purchased.  Availability and production for the third quarter will
also be reduced due to scheduled maintenance, and the fourth quarter is expected to be similar to
the first quarter.  Additional production is expected from the 248 MW gas-fired Big Hanaford
and 650 MW Sarnia plants, which are scheduled to commence commercial operations in the third
quarter of 2002 and by the first quarter of 2003, respectively.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Electricity spot prices are expected to increase from the levels experienced in the first quarter of
2002.  The extent of the recovery of electricity prices will be dependent on the price of natural gas and the level of
increased demand due to an anticipated economic recovery which is forecasted for the second
half of 2002.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">TransAlta is continuing its focus on reducing fuel and OM&amp;A expenses.  The areas for
reductions were identified in the fourth quarter of 2001, and are currently being implemented.
The results of these initiatives are expected to become apparent in the second half of the year and
beyond.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Energy Marketing trading volumes are expected to continue at the level experienced in the first
quarter of 2002.  Gross margins on trading activities are expected to recover due to lower activity
in the medium- and longer-term markets in reaction to the reduced liquidity in these markets.
However, they are not expected to recover to the levels experienced in 2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Assets under construction at March 31, 2002 totaled $1,276.9 million and consisted primarily of
the Big Hanaford and Sarnia plants discussed above and the 252 MW Campeche and 259 MW
Chihuahua plants, which are scheduled to commence commercial operations in the first and third
quarter of 2003, respectively.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">In February 2002, the EUB approved the previously announced 900 MW expansion of the
Keephills plant.  TransAlta is now updating the project feasibility study factoring in the
impact of Alberta's transmission constraints, environmental conditions placed on the approval by
the EUB and market conditions is. The corporation expects to announce its plans
in the second half of the year.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>GLOSSARY OF KEY TERMS</strong>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><strong>Availability</strong> &#173; A measure of time, expressed as a
percentage of continuous operation 24 hours a day, 365 days a year, that a generating unit is capable of
generating electricity, whether or not it is actually generating electricity.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Btu</strong> &#173; A standard unit for measuring the quantity of heat energy required to heat one pound of
water one degree Fahrenheit.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Capacity</strong> &#173; The rated continuous load-carrying ability, expressed in megawatts of generation
equipment.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Gigawatt</strong> &#173; A measure of electric energy equal to 1,000 megawatts.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Gigawatt hour (GWh)</strong> &#173; A measure of electricity consumption equivalent to the use of 1,000
megawatts of power over a period of one hour.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Heat rate</strong> &#173; A measure of conversion, expressed as Btu/MW, of the amount of thermal energy
required to generate electrical energy.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Megawatt</strong> - A measure of electric energy equal to 1,000,000 watts.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Megawatt hour (MWh)</strong> - A measure of electricity consumption equivalent to the use of
1,000,000 watts of power over a period of one hour.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>Spark spread</strong> &#173; A measure of gross margin per MW, sales price less cost of fuel.

<table  width="96%">
<tr valign="top"><td colspan="4" width="16%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>TRANSALTA CORPORATION</strong></p>
  </td>
<td width="0%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="0%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="0%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="13%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="2%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="13%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>CONSOLIDATED STATEMENTS OF EARNINGS
AND RETAINED EARNINGS</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><em>(in millions of Canadian dollars except per share amounts)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="16%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="16%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="16%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"><em></em><strong>Unaudited</strong></p>
  </td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"><em></em><strong>3 months ended March 31</strong></p>
  </td></tr></table>

        <div align="center">
          <center>

<table  width="95%">
<tr valign="top"><td width="17%"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="0%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="0%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="0%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="13%">
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong><strong>2002</strong></td>
<td width="0%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="14%">
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong>2001</td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Revenues </strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em><strong>$    1,067.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$       1,390.6</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Trading purchases</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong></em><strong>       (647.7)</strong></p>
</td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         (684.1)</p>
</td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Fuel and purchased power</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong></em><strong>       (173.8)</strong></p>
          </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">          (411.4)</p>
          </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Gross margin</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em><strong>         245.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            295.1</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Operating expenses</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Operations, maintenance and administration</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          87.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            84.3</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           56.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              49.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Taxes, other than income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             7.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                7.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         150.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            141.6</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Operating income</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           95.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           153.5</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Other expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           (2.0)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              (1.5)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Foreign exchange gain</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             0.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">               0.7</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Net interest expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         (19.2)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            (33.9)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings from continuing operations before income taxes</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong>and non-controlling interests</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           74.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           118.8</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Income taxes</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           22.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             53.0</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Non-controlling interests</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             6.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                6.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings from continuing operations</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           45.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             59.0</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Earnings from discontinued operations <em>(Note 2)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           11.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              11.7</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Net earnings</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em><strong>           56.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              70.7</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Preferred securities distributions, net of tax</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             5.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                3.1</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Net earnings applicable to common shareholders</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$         51.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em>$            67.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong><em></strong></em><strong><em></strong></em><strong>Common share dividends</strong></p>
        </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        (42.2)</strong></p>
        </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em>           (42.2)</p>
        </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Adjustment arising from normal course issuer bid</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           (4.5)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em>              (1.6)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Retained earnings</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong></em>Opening balance</p>
      </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         838.3 </strong></p>
      </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em>            826.9</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Closing balance</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong></em><strong>$         843.0 </strong></p>
      </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></strong></em>$          850.7</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Weighted average common shares outstanding in the period</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         169.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            168.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong><em></em></strong><strong>Basic earnings per share</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong><em></strong></em>Continuing operations</p>
    </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$           0.24</strong></p>
    </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>$            0.33</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Earnings from discontinued operations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             0.06 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>              0.07</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Net earnings</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$           0.30 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>$            0.40</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong></strong><strong>Diluted earnings per share</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Earnings from continuing operations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$           0.22 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$            0.32</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Net earnings</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$           0.28 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$            0.39</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>See accompanying notes.</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr></table>

</center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="92%">
<tr valign="top"><td colspan="4" width="3%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>TRANSALTA CORPORATION</strong></p>
  </td>
<td width="0%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="7%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>CONSOLIDATED STATEMENTS OF CASH FLOWS</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em>(in millions of Canadian dollars)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="3%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="3%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="65%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="5">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong></strong><strong>Unaudited</strong></p>
  </td></tr>
<tr valign="top"><td colspan="4"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="5">
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong><em></em><strong>3 months ended
March 31</strong></td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong><strong>2002</strong></td>
<td width="1%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" width="0%">
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong>2001</td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Operating activities</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Net earnings</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$         56.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>$    70.7</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        70.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      65.6</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Non-controlling interests</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          6.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>        6.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Loss on sale of assets</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         2.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>        1.0</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Future income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          3.1 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    (11.2)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Unrealized loss (gain) from energy marketing activities</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        28.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      (0.5)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Other non-cash items</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          2.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>        4.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      171.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    137.3</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Change in non-cash operating working capital balances</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      (42.3)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    251.4</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Cash flow from operating activities</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      129.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    388.7</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Investing activities</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><em></em>Additions to capital assets</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>(269.3)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em> (161.4)</p>
  </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Disposal</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            -  </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      60.3</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Long-term receivables</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         4.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>           -</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Long-term investments</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      (2.9)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>           -</p>
  </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Other</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      (4.8)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>           -</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Cash flow used in investing activities</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>  (272.7)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em> (101.1)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Financing activities</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em></em>Net increase (decrease) in short-term debt</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>     214.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em> (279.1)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Issuance of long-term debt</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>       30.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    304.0</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Repayment of long-term debt</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      (1.2)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em> (271.3)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Issuance of common shares</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>         0.9 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>        2.9</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Redemption of common shares</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>    (14.0)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>     (2.1)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Distributions on preferred securities</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      (9.2)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>     (5.9)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Dividends on common shares</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>    (28.2)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>   (40.0)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Dividends to subsidiary's non-controlling preferred shareholders</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>              -  </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      (2.3)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Distributions to subsidiary's non-controlling limited partner</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        (6.3)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      (5.9)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Cash flow from (used in) financing activities</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>      187.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>  (299.7)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Cash flow from (used in) operating, investing and financing</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        43.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>    (12.1)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Effect of translation on foreign currency cash</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">        (5.5)</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>        6.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Increase (decrease) in cash</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        38.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      (5.3)</p>
  </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Cash at beginning of period</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        62.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>      53.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Cash at end of period</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$    100.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3" align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>$    48.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong></strong><em></em>See accompanying notes.</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td colspan="3">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr></table>

    </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="80%">
<tr valign="top"><td colspan="2" width="52%">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em></em><strong>TRANSALTA CORPORATION</strong></p>
  </td>
<td width="1%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="19%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong>CONSOLIDATED BALANCE SHEET</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><em>(in millions of Canadian dollars)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></em><strong>March 31</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong> Dec. 31</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="3%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong>2001</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">(Unaudited)</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">(Audited*)</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>ASSETS</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong>Current assets</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Cash</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            100.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $           62.0</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Accounts receivable</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                351.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            438.9</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Trading accounts receivable <em>(Note 3)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            656.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            700.8</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Future income tax assets</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  16.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              16.9</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Income taxes receivable</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                230.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            128.3</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Materials and supplies at average cost</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  71.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              85.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            1,426.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         1,432.4</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Investments </strong><em>(Note 4)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  40.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              37.3</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Long-term receivables</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                220.1 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            221.4</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Capital assets</strong> <em>(Note 2)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Cost</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            9,016.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         8,766.7</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Accumulated depreciation</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right"><strong>          </strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">       (2,671.9)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            6,280.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         6,094.8</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Goodwill</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  29.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              29.3</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Future income tax assets</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  15.5 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              15.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Other assets</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  54.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>              47.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Total assets</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $         8,066.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $     7,877.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong></strong><strong>LIABILITIES AND SHAREHOLDERS' EQUITY</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong><strong>Current liabilities</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Short-term debt</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            752.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $         537.2</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0">Accounts payable and accrued liabilities <em>(Note 4)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                426.1 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            473.4</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Trading accounts payable</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                599.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            642.7</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Future income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  11.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              11.8</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Dividends payable</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                  42.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              42.8</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Current portion of long-term debt</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                104.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            104.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>1,937.0 </strong></td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         1,812.2</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Long-term debt</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            2,437.2 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         2,406.8</p>
 </td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Deferred credits and other long-term</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                536.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            526.5</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Future income tax liabilities</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                412.8 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            409.1</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Non-controlling interests</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                281.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            281.0</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Preferred securities</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                452.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            452.6</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Common shareholders' equity</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Common shares <em>(Note 5)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            1,185.4 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         1,170.9</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0">Retained earnings</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                843.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            838.3</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0">Cumulative translation adjustment</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                (19.4)</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>             (19.5)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            2,009.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><em></em>         1,989.7</p>
 </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Total liabilities and shareholders' equity</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $         8,066.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $     7,877.9</p>
 </td></tr>
<tr valign="top"><td colspan="2">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Contingency </strong><em>(Note 6)</em></p>
  </td>
<td><em></em>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>See accompanying notes.</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="8">
    <p style="margin-top: 0; margin-bottom: 0">* Derived from the audited Dec. 31, 2001 consolidated financial statements.</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr></table>

    </center>
  </div>

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0"><strong>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</strong>

<p style="margin-top: 0; margin-bottom: 0"><em>(Tabular amounts in millions of Canadian dollars, except as otherwise noted)</em>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>1.	Accounting policies</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The accounting policies used in the preparation of these interim consolidated financial statements
conform with those used in the corporation's annual consolidated financial statements, except for
accounting for goodwill, stock-based compensation, and exchange gains and losses on translation
of long-term foreign currency denominated monetary items.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Effective Jan. 1, 2002, the corporation adopted the new Canadian Institute of Chartered
Accountants (CICA) standard for goodwill and other intangibles.  Under the new standard, goodwill
and certain intangibles are no longer subject to amortization, but are instead tested for impairment
at least annually.  The adoption of this standard resulted in the reclassification of $29.3 million
from acquired intangibles to goodwill, which will not be subject to amortization.  There was no
impairment of goodwill upon adoption of this standard.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Net income and earnings per share for the three months ended March 31, 2001 adjusted to
exclude the amortization the above amount is as follows:

<p style="margin-top: 0; margin-bottom: 0">

  <div align="center">
    <center>

<table  width="70%">
<tr valign="top"><td width="65%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="16%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="17%">
<p align="center" style="margin-top: 0; margin-bottom: 0">2001</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Reported net earnings applicable to common shareholders</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              67.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Amortization of acquired intangibles</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                   1.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Adjusted net earnings applicable to common shareholders</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              69.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><sup></sup>Reported basic earnings per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              0.40</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Amortization of acquired intangibles per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 0.01</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Adjusted basic earnings per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              0.41</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Reported diluted earnings per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              0.39</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Amortization of acquired intangibles per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 0.01</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Adjusted diluted earnings per share</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              0.40</p>
 </td></tr></table>

    </center>
  </div>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">On Jan. 1, 2002, the corporation retroactively adopted the new CICA standard for stock-based
compensation.  The new standard requires that stock-based payments to non-employees, direct
awards of stock and awards that call for settlement in cash or other assets be accounted for using
a fair value-based method of accounting.  The fair value method is encouraged for other stock-based compensation plans, but other methods of accounting, such as the intrinsic value method,
are permitted.  Under the fair value method, compensation expense is measured at the grant date
and recognized over the service period.  Under the intrinsic value method, compensation expense
is determined as the difference between the fair value and the exercise price of the equity
instrument granted.  If the intrinsic value method is used, disclosure is made of earnings and per
share amounts as if the fair value method had been used.  The corporation has elected to use the
intrinsic value method of accounting for its fixed stock option plans and its performance stock
option plan.  Accordingly, no compensation cost has been recognized for these plans.  The
following table provides pro forma measures of net earnings and earnings per share had
compensation expense been recognized based on the estimated fair value of the options on the
grant date in accordance with the fair value method of accounting for stock-based compensation:

<p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">

  <div align="center">
    <center>

<table  width="70%">
<tr valign="top"><td width="65%">
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31</p>
  </td>
<td width="16%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></td>
<td width="17%">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Reported net earnings applicable to common shareholders</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            51.4 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              67.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Compensation expense</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                 0.7 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                   0.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Pro forma net earnings applicable to common
shareholders</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            50.7 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              67.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Reported basic earnings per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            0.30 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              0.40</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Compensation expense per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                     - </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                      -</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Pro forma basic earnings per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            0.30 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              0.40</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Reported diluted earnings per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            0.28 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              0.39</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Compensation expense per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                     - </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                      -</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Pro forma diluted earnings per share</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $            0.28 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $              0.39</p>
 </td></tr></table>

    </center>
  </div>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">The estimated fair value of stock options issued during the quarter was determined using the
binomial model using the following weighted average assumptions, resulting in a weighted-average fair value of $4.25 per option (2001 - $4.35):

<p style="margin-top: 0; margin-bottom: 0">

  <div align="center">
    <center>

<table  width="70%">
<tr valign="top"><td width="65%">
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="16%" align="center">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2002</strong></p>
  </td>
<td width="17%" align="center">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Risk-free interest rate (%)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>5.9</strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>5.4</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Expected hold period to exercise (years)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>7.0</strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>7.0</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Volatility in the price of the corporation's shares (%)</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>28.3</strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>28.2</p>
  </td></tr></table>

    </center>
  </div>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">The CICA amended its standard on foreign currency translation effective Jan. 1, 2002.  The
changes require that translation gains and losses arising on long-term foreign currency
denominated monetary items be included in income in the current period.  Previously, these gains
and losses were to be amortized over the life of the related item.  As TransAlta designates long-term foreign currency denominated items as hedges of net investments in foreign operations, all
gains and losses arising on the translation of these items are deferred and included in the
cumulative translation adjustment account in shareholders' equity, therefore this amendment has
no impact on TransAlta.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">These interim consolidated financial statements do not include all of the disclosures included in
the corporation's annual consolidated financial statements.  Accordingly, these interim
consolidated financial statements should be read in conjunction with the corporation's annual
consolidated financial statements.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">TransAlta's results are seasonal in nature due to the seasonal nature of the electricity market and
related fuel costs.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><strong>2.	Discontinued operations</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">On July 4, 2001, the corporation signed a purchase and sale agreement for the disposal of its
Transmission operation for proceeds of approximately $850 million.  Regulatory approval was
received on March 28, 2002, and the transaction is expected to close on April 29, 2002.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">On June 29, 2001, the corporation's composter facility in Edmonton, Alberta was sold for cash
proceeds of $97.0 million.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">For reporting purposes, the results of the Edmonton Composter and Transmission operations have
been presented as discontinued operations in the statement of earnings.

<p style="margin-top: 0; margin-bottom: 0">

  <div align="center">
    <center>

<table  width="56%">
<tr valign="top"><td width="76%">
    <p style="margin-top: 0; margin-bottom: 0"><em>3 months ended March 31, 2002</em></p>
  </td>
<td width="23%"><em>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong></em>Transmission</strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Revenues</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $          41.5 </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Operating expenses</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> (20.5) </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Operating income</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>             21.0 </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Net interest expense</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> (1.7) </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Earnings before income taxes</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>             19.3 </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Income taxes</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>               8.1 </strong></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Earnings from discontinued operations</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $          11.2 </strong></td></tr></table>

    </center>
    </div>

<p style="margin-top: 0; margin-bottom: 0"><strong></strong>

    <div align="center">
      <center>

<table  width="75%">
<tr valign="top"><td width="56%"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0">Edmonton</p>
  </td>
<td width="14%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em>3 months ended March 31, 2001</strong></em></p>
  </td>
<td><strong><em>
<p align="center" style="margin-top: 0; margin-bottom: 0"></em>Transmission</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Composter</strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Total</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Revenues</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $          45.4 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            3.7 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $          49.1 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Operating expenses</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> (22.7) </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> (3.1) </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> (25.8) </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Operating income</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">             22.7 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>               0.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             23.3 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Net interest expense</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> (3.0) </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>                   - </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> (3.0) </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings before income taxes </strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">             19.7 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>               0.6 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             20.3 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Income taxes</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">               8.3 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>               0.3 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>               8.6 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings from discontinued operations</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $          11.4 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            0.3 </strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $          11.7 </strong></p>
  </td></tr></table>

  </center>
  </div>

<p style="margin-top: 0; margin-bottom: 0"><strong></strong>

<p style="margin-top: 0; margin-bottom: 0"><strong></strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>At March 31, 2002 and Dec. 31, 2001, all of the corporation's discontinued operations had
been sold with the exception of the Transmission operation.  Balance sheet amounts are as
follows:</strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>	</strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>	</strong>

  <div align="center">
    <center>

<table  width="69%">
<tr valign="top"><td width="49%"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="25%">
<p align="center" style="margin-top: 0; margin-bottom: 0"> March 31, 2002 </strong></td>
<td width="25%">
  <p style="margin-top: 0; margin-bottom: 0"><strong> Dec. 31, 2001 </strong></p>
  </td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"> Current assets</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $                        22.8 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $                        36.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"> Capital assets</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                         636.5 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                         637.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"> Other assets</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                             1.3 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>                             3.3</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"> Current liabilities</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong>                         </strong></td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0">                         </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"> Total net assets</p>
 </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"><strong> $                      648.8 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> $                      661.4</p>
 </td></tr></table>

    </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>3.	TRADING ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">The realized and unrealized components of trading accounts receivable and accounts payable are
as follows:

<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="66%">
<tr valign="top"><td width="61%">
    <p style="margin-top: 0; margin-bottom: 0">Trading accounts receivable</p>
  </td>
<td width="19%">
<p align="center" style="margin-top: 0; margin-bottom: 0">March 31, 2002</td>
<td width="18%">
  <p style="margin-top: 0; margin-bottom: 0">Dec. 31, 2001</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Realized</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $            119.9 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $            329.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Unrealized</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">               536.6 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">               370.9</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Total</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $         656.5 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $            700.8</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Trading accounts payable</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Realized</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $            63.1</td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $            303.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Unrealized</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0">               536.7 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">               339.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Total</p>
  </td>
<td>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $            599.8 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $            642.7</p>
 </td></tr></table>

    </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>4.	Investments</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">In January 2002, an additional $2.9 million was invested in a wind power generation company.
This investment is accounted for using the equity method.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>5.	Common shares issued and outstanding</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">TransAlta Corporation is authorized to issue an unlimited number of voting common shares without
nominal or par value.  At March 31, 2002, the corporation had 168.7 million (Dec. 31, 2001 &#173; 168.3
million) common shares issued and outstanding plus outstanding employee stock options to
purchase an additional 3.8 million shares (Dec. 31, 2001 &#173; 2.8 million).

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">In February 2002, TransAlta announced a normal course issuer bid to repurchase up to 3.0 million
common shares for cancellation.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><strong>6.	contingency</strong>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">In August 2000, a single thermal generating unit at the Wabamun plant was shut down due to
safety concerns related to possible corrosion fatigue cracks within the waterwall tubing of its boiler.
Repairs were completed late in the second quarter of 2001 and the unit returned to service in June
2001.

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Since Jan. 1, 2001, the unit has been subject to the terms of a power purchase arrangement
(PPA).  Under the PPA's <em>force majeure</em> article, the corporation is not obligated to supply electricity
during the period of repair, subject to confirmation by the administrator of the
PPAs. Should such
confirmation not occur, the corporation would be obligated to pay a penalty equal to the cost of
obtaining an alternative source of electricity to fulfill its PPA supply obligations during the affected
period.  No specific amount has been accrued in these financial statements for this potential
liability as the outcome was not determinable at the reporting date.  Should the <em>force majeure</em>
decision not be in TransAlta's favour, it could have a maximum pre-tax impact of approximately
$90 million.

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0"><strong>7.  	SUBSEQUENT EVENT</strong>

<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">On April 16, 2002, the Alberta Energy and Utilities Board
(EUB) rendered a negative decision of
$2.5 million after-tax with respect to TransAlta's hydro bidding strategy in 2000.  The impact of
regulatory decisions is recorded when the effect of such decisions is known, without adjustment to
the financial statements of prior periods.  Consequently, the adjustment will be recorded in the
second quarter of 2002.

<p style="margin-top: 0; margin-bottom: 0"><strong></strong>

<p style="margin-top: 0; margin-bottom: 0"><strong>8.	Comparative figures</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">Certain comparative figures have been reclassified to conform with the current period's
presentation.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0"><strong>9. 	SEGMENTED DISCLOSURES</strong>

<br wp="br1"><br wp="br2">
<p style="margin-top: 0; margin-bottom: 0">

<p style="margin-top: 0; margin-bottom: 0">Effective Jan. 1, 2002, the Generation and Independent Power Projects business segments were
combined into one Generation segment to reflect changes in TransAlta's organizational structure.
Prior period amounts have been restated.

<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="82%">
<tr valign="top"><td width="41%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>I.  Earnings information</strong></p>
  </td>
<td width="1%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="18%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong></strong><strong></strong><strong>Unaudited</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em>3 months ended March 31, 2002</strong></em></p>
  </td>
<td><strong><em></em></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong></em><strong>Generation</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Energy
Marketing</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Corporate</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Totals</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Revenues</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$        420.8</strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $      646.6</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $    1,067.4 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Trading purchases</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>             -  </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">        (647.7)</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>        (647.7)</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Fuel and purchased power</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right"><strong>        </strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                -</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 -</p>
  </td>
<td align="right"><strong>        </strong>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Gross margin</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          247.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             (1.1)</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>          245.9 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Operations, maintenance and</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            71.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              2.6</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">             13.2</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            87.4 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            50.1 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              0.7</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              5.5</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            56.3 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Taxes, other than income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>              7.0 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                -</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>              7.0 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>EBIT before corporate allocations</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>           118.3 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            (4.4)</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            95.2 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            16.6 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">              2.1</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong> -</p>
     </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>EBIT</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong> $        101.7 </strong></p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $         (6.5)</p>
  </td>
<td align="right"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">-</p>
    </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            95.2 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Other expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>            (2.0)</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Foreign exchange gain</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>              0.6 </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong></strong>Net interest expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td><strong>          </strong>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="7">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings from continuing operations before income taxes and non-controlling interests</strong></p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0"> $         74.6 </strong></td></tr></table>

    </center>
    </div>
    <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
    <div align="center">
      <center>
<table  width="85%">
<tr valign="top"><td width="42%"><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="20%">
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Unaudited</strong></td>
<td width="0%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="15%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="1%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="10%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="8%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em>3 months ended March 31, 2001</strong></em></p>
  </td>
<td><strong><em></em></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></strong></em><strong>Generation</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Energy
Marketing</strong></td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Corporate</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Totals</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Revenues</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $              655.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$             735.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$1,390.6</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Trading purchases</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                           -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            (684.1)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
-</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">  (684.1)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Fuel and purchased power</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  (411.4)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
-</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">  (411.4)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Gross margin</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  243.9</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 51.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
-</p>
  </td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
295.1</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Operations, maintenance and administration</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                     62.7</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                   4.4</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">         </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">      </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Depreciation and amortization</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                     42.5</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                   1.6</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">           </td>
<td align="right">
<p align="center" style="margin-top: 0; margin-bottom: 0">      </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Taxes, other than income taxes</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                       7.5</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      -</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
-</p>
  </td>
<td align="right">
<p style="margin-top: 0; margin-bottom: 0">
7.5</p>
 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>EBIT before corporate allocations</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                    131.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                 45.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">       (22.9)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">    </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Corporate allocations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                      21.0</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">                  1.9</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">       (22.9)</p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">            -</p>
</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>EBIT</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $                110.2</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$               43.3</p>
 </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  -</p>
  </td>
<td align="right">
<p align="right" style="margin-top: 0; margin-bottom: 0">
153.5 </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Other expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">      (1.5)</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Foreign exchange gain</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">        </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Net interest expense</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">    (33.9)</p>
  </td></tr>
<tr valign="top"><td colspan="3">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Earnings from continuing operations before income taxes and
non-controlling interests</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>

      </center>
<td>
  <p style="margin-top: 0; margin-bottom: 0" align="right">$
118.8</p>
 </td></tr></table>

    </div>
    <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
    <div align="center">
      <center>
<table  width="84%">
<tr valign="top"><td width="37%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>II.  Selected balance sheet</strong></p>
  </td>
<td width="1%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="10%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="10%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="13%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="15%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>Energy </strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Discontinued</p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong><em>March 31, 2002</strong></em></p>
</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0">Generation</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Marketing</p>
</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Corporate</p>
</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Operations</p>
</td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">Total</p>
</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Segment assets</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$</p>
  </td>
<td><strong>
<p align="right" style="margin-top: 0; margin-bottom: 0">$   695.7 </strong></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$      732.5 </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$           </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  8,066.3           </strong></p>
  </td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong><em>Dec. 31, 2001</strong></em></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Segment assets</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$</p>
    </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$</p>
     </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$      609.0</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$</p>
           </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  7,877.9</p>
            </td></tr></table>

    </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="84%">
<tr valign="top"><td width="33%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>III.  Selected cash flow</strong></p>
  </td>
<td width="1%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="11%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="12%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="14%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> Energy  </strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><em>3 months ended March 31, 2002</strong></em></p>
  </td>
<td><strong><em></em></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"> Marketing</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> Corporate </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> Operations </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> Total </strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong>Capital expenditures</strong></p>
  </td>
<td><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"> $</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $            </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong> $           13.3 </strong></p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  269.3            </strong></p>
  </td></tr>
<tr valign="top"><td><strong></strong>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">3 months ended March 31, 2001</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Capital expenditures</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$        145.4</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"> $           0.3</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$             2.8</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$             12.9</p>
 </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  161.4</p>
            </td></tr></table>

    </center>
  </div>
  <p style="margin-top: 0; margin-bottom: 0">

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
  <div align="center">
    <center>
<table  width="70%">
<tr valign="top"><td width="49%">
    <p style="margin-top: 0; margin-bottom: 0"><strong>IV. Reconciliations</strong></p>
  </td>
<td width="8%"><strong></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="20%">
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td width="21%">
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td></tr>
<tr valign="top"><td colspan="4">
    <p style="margin-top: 0; margin-bottom: 0"><strong>Depreciation and amortization expense (D&amp;A) per statement of cash flows</strong></p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"><strong><em>3 months ended March 31</strong></em></p>
</td>
<td><strong><em></em></strong>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
<p align="center" style="margin-top: 0; margin-bottom: 0"></em>2002</strong></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>2001</p>
</td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">D&amp;A expense for reportable segments</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$ 56.3</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 49.8</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Discontinued operations</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>11.7</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>12.0</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0">Other</p>
  </td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>2.9</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong></strong>3.8</p>
  </td></tr>
<tr valign="top"><td>
    <p style="margin-top: 0; margin-bottom: 0"></td>
<td>
  <p style="margin-top: 0; margin-bottom: 0"></td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0"><strong>$ 70.9</strong></p>
  </td>
<td align="right">
  <p style="margin-top: 0; margin-bottom: 0">$ 65.6</p>
  </td></tr></table>

  </center>
  </div>

      <p style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
      <p style="margin-top: 0; margin-bottom: 0">&nbsp;
<p align="center" style="margin-top: 0; margin-bottom: 0"><strong>Signatures</strong>

<p align="left" style="margin-top: 0; margin-bottom: 0">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 align="left" style="margin-top: 0; margin-bottom: 0">&nbsp;

<p align="left" style="margin-top: 0; margin-bottom: 0"><u>TransAlta Corporation   </u>

<p style="margin-top: 0; margin-bottom: 0" align="left">	(Registrant)

<p style="margin-top: 0; margin-bottom: 0" align="left">	&nbsp;

<p style="margin-top: 0; margin-bottom: 0" align="left">	&nbsp;

<p align="left" style="margin-top: 0; margin-bottom: 0">By:<u>/s/ Rodger Conner</u>

<p style="margin-top: 0; margin-bottom: 0">	(Signature)

<p style="margin-top: 0; margin-bottom: 0">	Rodger Conner, Corporate Secretary

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0">&nbsp;

<p style="margin-top: 0; margin-bottom: 0">Date: April 18, 2002

<br wp="br1">
      <p style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
      <p style="margin-top: 0; margin-bottom: 0">&nbsp;</p>

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</TEXT>
</DOCUMENT>
</SUBMISSION>
